Clusters of High Technology SMEs: The Dutch Case

Regional Studies Vol 334 pp 391plusmn 400

Clusters of High Technology SMEsThe Dutch Case

EGBERT WEVER and ERIK STAMUrban Research Centre Utrecht (URU) Faculty of Geographical Sciences University of Utrecht PO Box 80115 3508

TC Utrecht The Netherlands

(Received July 1998 in revised form October 1998)

WEVER E and STAM E (1999) Clusters of high technology SMEs the Dutch case Reg Studies 33 391plusmn 400 This paper

examines the relevance of high technology clusters in the specireg c Dutch spatial context a relatively small and homogeneous

country In this context the spatial pattern of high technology reg rms is congruent with or closely follows the general spatialpattern of all reg rms Regional clusters characterized by innovation linkages with other reg rms and knowledge centres hardly

exist Most high technology small and medium sized enterprises (SMEs) have nationwide linkages

The Randstad High technology SMEs High technology services Innovative activities Regional clustersCo-operation

WEVER E et STAM E (1999) Les regroupements de PME WEVER E und STAM E (1999) Kluster hoch technisierterde pointe eAcirc tude de cas de la Hollande Reg Studies 33 kleiner und mittlerer Unternehmen der Fall der Nieder-

391plusmn 400 Cet article cherche aAacute examiner lrsquoimportance des lande Reg Studies 33 391plusmn 400 Dieser Aufsatz untersucht

regroupements de PME de pointe quant aAacute la geAcirc ographie de die Relevanz hoch technisierter Kluster im spezireg sch nieder-la Hollande un pays relativement petit et homogeAacute ne Dans laEgrave ndischen raEgrave umlichen Zusammenhang dh einem relativ

ce contexte-laAacute la distribution geAcirc ographique des entreprises kleinen und homogenen Lande In diesem Zusammenhang

de pointe est en harmonie avec ou correspond eAcirc troitement entspricht das raEgrave umliche Muster der Hochtechnologiereg rmenaAacute la distribution geAcirc neAcirc rale des entreprises Rares sont les dem allgemeinen raEgrave umlichen Muster aller Firmen oder folgt

regroupements reAcirc gionaux caracteAcirc riseAcirc s par des relations avec ihm weitgehend Es gibt kaum regionale Kluster die durch

drsquoautres entreprises et drsquoautres centres drsquo eAcirc tudes La plupart InnovationsverknuEgrave pfungen mit anderen Firmen und Wis-des PME de pointe jouissent des liens sur lrsquoensemble du senszentren charakerisiert werden Die meisten hoch techni-

territoire sierten kleinen und mittleren Unternehmen unterhalten

landesweit Verbindungen

Randstad PME de pointe Services de pointe

ActiviteAcirc s innovatrices Regroupements reAcirc gionaux Randstad

CoopeAcirc ration Hoch technisierte kleine und mittlere UnternehmenHoch technisierte Dienstleistungen

Innovative TaEgrave tigkeiten Regionale Kluster

Zusammenarbeit

INT ROD UCT I ON for realizing economic growth and creating many new

jobs Since Michael Porter published The Competitive

It is generally agreed that besides the well-known Advantage of Nations (1990) clusters of (innovative)

factors from traditional neo-classical theory other fac- reg rms have become a popular policy objective not only

tors like technology or more general knowledge are in the European Union but in the Netherlands as well

According to PORTER 1990 p 149 a cluster consistsbecoming more and more important in explaining the

economic performance of reg rms and as a consequence of industries linked through vertical (buyersupplier) or

horizontal (common customers technology channelsthe economic development of regions (LAMBOOY

1997) Or in the words of FREEMAN 1982 p 169 etc) relationships PORTER 1990 p157 also notes

the importance of geographical concentration for`not to innovate is to diersquo This explains why know-

ledge-intensive activities for example those carried out innovation In this paper we concentrate specireg cally

on the innovative links of high technology small andby high technology reg rms take a central position in the

economic policy of most European countries It is medium sized enterprises (SMEs) with customers sup-

pliers and knowledge centresassumed that such reg rms are an excellent starting point

0034-340499040391-10 copy1999 Regional Studies Association

392 Egbert Wever and Erik Stam

The Randstad or more generally the Netherlands sector even when no innovation aspects are involved

Such diVerences make the Randstad case as regardscan be considered an interesting case concerning the

location and the spatial clustering of high technology high technology services of particular interest

reg rms This is reg rstly because of its specireg c spatialcontext which is quite diVerent from that in which

HI G H T E CHNOL OG Y CL US T E RS INthe Cambridge Phenomenon the `Third Italyrsquo the

T H E D UT CH S PAT IA L CONT E X TCatalonian or Sophia-Antipolis high technology clus-

ters operate The Dutch context is characterized by its Although the Dutch spatial context is specireg c we often

use the results of research in which notions like localrestricted national size and consequently relatively smalldiVerences between regions Although the Netherlands regionalrsquo or `high technologyrsquo have quite another

meaning than in the Netherlands So our research isas a whole is comparable in size with Baden-

WuEgrave rttemberg 12 provinces and 40 statistical areas also directed towards the identireg cation of `Third Italiesrsquo

`Porter clustersrsquo `Cambridge phenomenarsquo or innovative(Corop regions) can be distinguished The Dutch pub-

lic educational system is extremely deconcentrated milieux in general We argue that the relatively homo-

geneous Dutch spatial context inmacr uences the locationUniversities and polytechnics are evenly spread overthe country implying that there are no large variations of high technology reg rms and the spatial clustering of

high technology reg rms in a very specireg c wayin regional education levels Information is easily avail-

able from local Chambers of Commerce or Innovation As the literature abounds with theories dealing with

clusters of high technology reg rms andor innovativeCentres which are distributed evenly over the country

as well Moreover there are no regional institutional milieux we will not dwell at length on them The idea

behind resource munireg cence theory a more or less neo-diVerences Employees and employers are primarilyorganized nationally Wage negotiations are conducted classical approach is that conditions for reg rms to innov-

ate diVer regionally It is assumed that some regionsat the national level implying that regional diVerences

in labour costs per sector hardly exist There are hardly have a more favourable resource base than others better

educated labour more and better knowledge centresany regional or local taxes As a consequence diVerences

in regional business conditions are relatively small more venture capital reg rms more high-quality servicesetc Such a resource base might stimulate reg rms toA second argument makes the Randstad an interest-

ing case The literature about clusters of high techno- innovate (OERLEMANS 1996 KEEBLE 1997)

The learning economy or learning region approachlogy reg rms deals primarily with high technology

manufacturing reg rms (O AKEY 1995 OERLEMANS (LUNDVALL 1992 NELSON 1993 STORPER 1995

MORGAN 1997) building on Schumpeter and much1996) However the Dutch economy as a whole can

hardly be characterized as high technology According to more evolutionary in character is based on the idea thatinnovation is the outcome of a process of interactionthe OECD 1994 the employment share of high and

medium technology industrial activities as a proportion between customers suppliers and knowledge centres

As a consequence proximity of these actors and anof all manufacturing employment in the Netherlands

was only 40 in 1994 against 54 in Germany Perhaps institutional framework that favours interaction will

stimulate the formation of regional clusters of innova-this is one of the reasons why attempts to attract foreign

high technology reg rms to the Netherlands often fail tive activitiesThis aspect of interaction can also be found in acompared with Dutch success in attracting distribution

companies (JACOBS et al 1990 D E L IGT and number of other approaches for example in the network

approach of the IMP research group (HAKANSSON WEVER 1998) More generally the Dutch high

technology sector is heavily dominated by high techno- 1993 KAMANN 1998) In this approach the role of

sustainable stable interpersonal relations is stressedlogy business services especially activities in the reg eld

of information and communication technology the implying again the relevance of institutional and prox-imity aspects In Nooteboomrsquos dynamic transaction costsICT sector High technology business services diVer

in several respects from high technology manufacturing approach (NOOTEBOOM 1992 1996) innovation is

linked to transaction costs and distance According toreg rms Compared to manufacturing customers of (high

technology) services generally account for more Nooteboom regional clustering is especially attractive

when the activities involved are in the reg rst phase ofinnovation impulses than suppliers although someauthors claim the opposite (eg EVANGELISTA and their product life cycle In this phase particularly the

exchange of tacit knowledge which requires distance-S IRILL I 1997) Often these customers ask for services

made to measure implying that something new has to sensitive face-to-face contacts in order to avoid high

transaction costs is importantbe added to a standard service leading to incremental

innovation (FROWEIN et al 1998) At the same time The last approach we will deal with is the well-

known theory of regional innovative milieux con-it is again compared to manufacturing much morediYcult to dereg ne notions like product and process nected with the GREMI research group (CAMAGNI

1991 HANSEN 1992) It includes notions like `net-innovation in the service sector And face-to-face con-

tacts are always essential in the (high technology) service worksrsquo transaction costsrsquo trustrsquo and regional embed-

Clusters of High Technology SMEs The Dutch Case 393

dednessrsquo In this approach it is assumed that the relative number of high technology reg rms are small

We use the notion regionrsquo in the Dutch sense that is(manufacturing) SMEs being unable to innovate on

their own are enabled to generate innovations by in terms of very small regions We hypothesize in the

second place that we will not reg nd regional clusters ofworking together intensively Such co-operation isstimulated by the presence of a common set of norms high technology reg rms in Dutch regions A regional

cluster is dereg ned here as a geographical concentrationand values (the institutional element) but this often

presupposes proximity of the actors involved A con- of reg rms which exhibit a signireg cant degree of intrare-

gional linkages We will focus especially on linkagescentration of rivals customers and suppliers promotes

eYciencies and specialisation and even more impor- with customers suppliers and knowledge centres Wewill concentrate most on the innovation impulses thattant stimulates innovationrsquo (HANSEN 1992 p 97)

How should we evaluate these approaches in the such a regional cluster exercises on the reg rms belonging

to that regional clusterDutch context We should realize that they all stress in

one way or another reg rm-external stimuli for innovation In relation to both hypotheses we do not deny

that there are clusters of economic activities in theBut this presupposes that substantial regional diVerences

exist in resource conditions institutional frameworks Netherlands even regional and local clusters Since the1950s and 1960s the port of Rotterdam has containedand values and norms In the Randstad context with

relatively homogeneous regional business environ- an example of CHARDONNET rsquos 1953 oil and petro-

chemical complex Horticultural clusters for examplements this assumption can be seriously questioned In

such a context we should not underestimate the role vegetable cultivation in the Dutch `Glass Cityrsquo (between

Rotterdam and The Hague) and macr ower growing in theof reg rm-internal factors the individual entrepreneurrsquos

inclination to innovate the way in which an entrepren- Aalsmeer region are well known examples In thesmall municipality of Urk we have a traditional reg shingeur organizes his reg rmrsquos internal human resources

(VAESSEN 1993 V AESSEN and WEVER 1993 cluster For some specireg cally modern activities such as

the multimedia sector a cluster can be identireg ed inVAESSEN and KEEBLE 1995 OERLEMANS 1996)

This implies at the same time that we should not the Northern wing of the Randstad in and near

Amsterdam However we decided not to concentrateoverestimate the role of geographicalrsquo factors such asdistance and regional institutional networks within our research on such existing (small) clusters Our

research was focused on the issue of the existence ofsmall and relatively homogeneous regions like the

Randstad The Randstad incorporates the three west- regional clusters of high technology activities Given

the specireg c Dutch spatial context we assume that forern provinces of North Holland South Holland and

Utrecht an area of 8922 km2 ie only one-fourth of high technology activities such clusters will primarily

be national clusters functioning within a homogeneousthe size of Baden-WuEgrave rttemberg Generally speakingwithin such a context distance is not a real problem national institutional setting

In the next section we will present some of theAnd what about the institutional context Without

doubt in a context in which resource elements hardly results of our empirical research We deal reg rst with

the location hypothesis followed by the regional clustervary spatially it is appealing to assign a signireg cant role

to the impact of diVerences in institutional frameworks hypothesis

or regional Wirtschaftsgeist as CHESHIRE 1996pp 1plusmn 2 has already noted `Regions which develop

H IG H T E CH NOL OG Y S M E s IN T H Emore successful territorially competitive policies will

NE T HE RL A ND S T HE L OCAT IONgrow at the expense of those that do notrsquo But here as

PAT T E RNwell one can doubt whether big diVerences in at least

formal regional institutional frameworks exist within In our empirical research and mainly for pragmatic

reasons we have used BUTCHART rsquos 1987 dereg nitionthe Randstad One should realize that in the Randstadin addition to numerous polytechnics there are reg ve of high technology industries Based on this dereg nition

the EIM the Dutch economic institute for SMEsuniversities and until recently eleven Chambers of

Commerce Perhaps it is not by accident that HANSEN prepared a database of all high technology reg rms which

employ less than 100 employees This reveals that 8acute11992 p 95 while giving examples of regional high

technology clusters in Italy Spain France Portugal of all such reg rms in the Netherlands can be classireg ed ashigh technology according to the Butchart dereg nitionDenmark Germany and Switzerland did not mention

any example from the Netherlands 1acute5 are high technology manufacturing reg rms and

6acute6 high technology service reg rms most of whichIn this paper we are not going to deny the potentially

important role of the factors stressed in the various belong to the ICT sector In 1996 the share of this

ICT sector in Dutch GNP was 5 4 (BOOZ ALLENtheoretical approaches But bearing the specireg c Dutch

context in mind and on the basis that geography amp HAMILTON 1998) So we are certainly not dealingwith a substantial part of the Dutch economy Whenmattersrsquo we may formulate two hypotheses We assume

in the reg rst place that within the Netherlands and the number of high technology reg rms is expressed per

100 reg rms in all sectors1 the province of Zeeland hasespecially within the Randstad regional diVerences in


Fig 1 Number of high technology reg rms and total number of reg rms in the Corop regions 1995

the lowest score nationally (3 5) and the new province

of Flevoland the highest (10 8) Within the Randstad

the province of Utrecht registers the highest score 9 7

per 100 reg rms against 8 7 for South Holland and

7 9 for North Holland Together the three Randstad

provinces contain a relatively large number of hightechnology reg rms 54 of the national total However

this share becomes less impressive when we realize that

these three provinces also account for 51 of all reg rms

For the smaller Dutch Corop regions diVerences

are not surprisingly larger But here as well these

diVerences more or less disappear if we relate thenumber of high technology reg rms to the regional stock

of reg rms (Fig 1)

The few outliers in Fig 1 can easily be explained

For example the high score of Flevoland (this Corop

coincides with the province of Flevoland) is related tothe fact that in this new province until now only a

relatively small number of reg rms have existed The low

score of Zeeland is related to the fact that this small

regional economy is for many service activities depend-

ent on firms located in nearby Corops such as Rotter-

dam Within the Randstad the diVerences are relativelysmall However Fig 1 also clearly shows that three

(Randstad) Corops contain in absolute terms the most Fig 2 Share of high technology service reg rms in total numberhigh technology SMEs Utrecht Greater Amsterdam of reg rms in Corop regions 1995and Greater Rotterdam

Some interesting minor diVerences emerge when we

diVerentiate between high technology service and high Summarizing where the manufacturing sector tradi-technology manufacturing reg rms Within the national tionally dominates (outside the Randstad) we reg ndcontext the Randstad is less important for the latter relatively more high technology manufacturing reg rms(Fig 3) than for the former (Fig 2) But this is again Where the service sector traditionally dominatesless surprising when we link these numbers to the total (within the Randstad) we reg nd relatively more high

number of reg rms in manufacturing and services as we technology service reg rms This is certainly not newdid in Fig 1 The Randstad (the three western prov- Research in the 1980s although using somewhatinces) contains 48 of all Dutch high technology diVerent dereg nitions of high technology yielded virtu-manufacturing reg rms and 56 of all Dutch high techno- ally the same picture (KOERHUIS and CNOSSEN logy service firms compared to 51 of all reg rms High 1982 DRENTH 1990) In a recent publicationtechnology manufacturing reg rms are over-represented STOREY and TETHER 1998 p 942 show the same

outside the Randstad where the manufacturing sector outcome for new technology-based reg rms in the Euro-

pean Uniongenerally is over-represented


(293) and in high technology services (1439) The

latter total is greater than that for Greater Amster-

dam (1287) or Greater Rotterdam (1001)

2 The province of Utrecht is highly oriented to ser-vices 83 of all its high technology reg rms can be

found in business services most of them in the

information communication sector (ICT) As a

contrast it was therefore decided to study high

technology SMEs in the municipality of Rotterdamas well since this region is traditionally more ori-

ented to manufacturing Both regions are endowed

with many relevant resources both have a university

(including an academic hospital) several polytech-

nics a Chamber of Commerce an Innovation

Centre etc

We assume that it is generally unlikely that regionalhigh technology clusters are to be found elsewhere in

the Netherlands when such clusters are totally lacking

in our research regions Of course this assumption

might be wrong It is theoretically always possible that

a cluster could be found even in a region with arelatively small number of high technology reg rms In

order to ascertain whether clusters exist in our two

study areas we interviewed 94 high technology reg rmsFig 3 Share of high technology manufacturing reg rms in total partly by telephone We used a slightly modireg ed version

number of reg rms in Corop regions 1995 of the TSER Networkrsquos common survey question-

naire2 In use it soon became clear that the question-naire oriented particularly towards high technologyRE G IONA L CL US T E RS OF HIG Hmanufacturing reg rms raised some problems for ourT E CH NOL O G Y S M E s IN T H Eservice reg rms Notions like process and product innova-NE T HE RL A ND S tions and radical and incremental innovations are well

The conclusion plusmn that most Dutch high technology known in manufacturing but for a high technologymanufacturing and service SMEs are to be found in service reg rm it is very diYcult to answer questionsthose areas where manufacturing or services dominate about aspects such as process innovations Followingthe regional economy plusmn does not of course automa- LUNDVALL 1988 1993 we used the notions reg rmtically imply that regional clusters are lacking Clusters internalrsquo (process innovations) for example computer-as we dereg ned them earlier might exist especially when ization and externalrsquo (product) innovations mostlywe realize that in the Netherlands business services are incremental innovations resulting from the needs orhighly dominant within Butchartrsquos high technology specireg cations of customers or suggestions from sup-classireg cation It is generally agreed that such reg rms are pliers of software In this report we will concentrate onrelatively sensitive to distance from their customers In the entrepreneursrsquo opinions about the role of externalorder to test the second hypothesis about the presence partners or economic actors (customers suppliersof regional clusters a research project was carried out knowledge centres intermediate organizations) forin the Randstad focused on two regions containing a innovation within and modernisation of their reg rmslarge absolute number of high technology SMEs (see

Fig 1) Corop Utrecht (which coincides with the

province of Utrecht) and the municipality of Rotter- S OME CH A RACT E RIS T ICS OF T H E

RE S E A RCH P OP UL AT I ONdam (an important part of Corop Greater Rotterdam)

This choice was based on several argumentsSome 80 out of all 94 interviewed SMEs belonged to

the sectors of computerization software development1 The province of Utrecht is one of the biggest Dutch

Corop regions by area as well as number of reg rms and programming services the so-called computer ser-

vice reg rms The number of manufacturing SMEsWhere the total stock of reg rms is concerned Utrecht

ranks second after Greater Amsterdam However it which tend to be heavily emphasized in the literature

on innovative milieux is very limited namely 14 Thiscontains the largest total number of high technologySMEs (1732) in the Netherlands even more than outcome was not that surprising given the orientation

of the Dutch economy to services However even theGreater Amsterdam (1512) as well as the biggest

number of high technology reg rms in manufacturing Rotterdam sample contained only four manufacturing


high technology reg rms out of a total of 39 Of all

interviewed reg rms 72 were very small (10 employees or

fewer) 53 having even fewer than reg ve employees This

reg rm size distribution had one advantage in nearly allcases we interviewed the owner Often this was the

original founder of the reg rm since nearly 50 of all

reg rms have been in existence for less than reg ve years

Ten reg rms were founded as branch plants by existing

reg rms 29 were spin-oVs and 55 could be characterizedas normal SMEs established as a conventional start-up

by one or more entrepreneurs Most of the spin-oVs

which comprise the bigger reg rms in our sample came

from large incubator companies such as Apple Europe

Bull Alcatel IBM and Digital These incubator organ-

izations were often located in the Randstad althoughnot all (only 48) were sited in the Utrecht or Rotter-

dam regions In those cases where the incubator reg rm

was elswhere in the Randstad the spin-oV entrepreneur Fig 5 The importance3 of formal and informal contacts forwas often resident in the Utrecht or Rotterdam region innovative activitiesThe entrepreneurs behind the interviewed high

technology SMEs display Schumpeterian entrepren-eurial spiritrsquo going by the reasons which they gave for

starting their reg rms these focus chiemacr y on the wish to lower score for suppliers Since our respondents are

very small reg rms we had expected that they would justbe creatively engaged the wish to be independent and

identifying a market niche buy standard software from normal wholesalers This

did happen However in many cases they receivedinteresting tips from their suppliers This explains the

HI G H T E CHNOL OG Y CL US T E RS positive rating of suppliers There are hardly any diVer-

ences in the scores between spin-oVs and normal highFor our high technology SMEs by far the most impor-technology SMEs Only the very small reg rms receivedtant external innovation impulses came from otherfewer innovation impulses from their customers andreg rms (Fig 4) This outcome is in line with many othersuppliers But some of these hardly saw themselves asresearch reg ndings including research among non-highbeing innovative They are more similar to traditionaltechnology businesses (JACOBS and VAN DER

jobbersrsquo in manufacturingMEIJDEN 1995 TAMAAcirc SY and STERNBERG 1998)How do external innovative impulses reach the reg rmsThe diVerence between customers (businesses and insti-

we studied or in other words how does the interactiontutions like schools hospitals government depart-between our respondents and their customers andments) on the one hand and suppliers (wholesalers andsuppliers take place In many cases this takes the formdistributors of basic software) on the other hand wasof one-sided interaction the customer wants to besmaller than we had expected We had expected asupplied according to his specireg cations This reg nding is

certainly inmacr uenced by the size of our respondents We

are dealing with very small reg rms which obtain orders

mainly from much bigger companies or organizations

This may explain why many high technology SMEsstress the importance of formal contacts (Fig 5) This

holds especially for contacts with public organizations

Nevertheless sometimes there is real co-operation

with a possibility of collective learning In these cases

the customer has a specireg c (software) problem that canonly be solved when both partners co-operate The

outcome of this problem is sometimes a new pro-

gramme But genuine interaction of this kind with

its potential for collective learning is certainly not

dominant In such a situation our high technology

SMEs stress the importance of formal contacts plusmn evenwhen informal contacts which often go hand in hand

with formal activities existFig 4 The importance3 of external partners for innovative

activities Compared to vertical co-operation there is much


less horizontal co-operation (see Fig 4) The role

of knowledge centres (universities polytechnics large

public laboratories) is very limited although each

respondent is in the vicinity of one or more suchknowledge centres This again is not a surprising out-

come In the Netherlands the role of such institutions

is relatively unimportant for SMEs as a whole This is

also the case for bigger manufacturing reg rms in relatively

large areas in Germany (TAMAAcirc SY and STERNBERG 1998) Only 20 of our SMEs regarded co-operation

with a knowledge centre as being of importance Even

in these cases we should not overestimate the innovative

impulses generated by the institutions involved The

most important goals of co-operation with knowledge

centres as reported by our respondents involved thevisiting of a centrersquos library and the temporary recruit-

Fig 6 The importance3 of regional customers and suppliersment of students There were no diVerences in responsefor innovative activitiesrates between spin-oVs and normal high technology

SMEs But very small (up to 10 employees) reg rms made

less use of knowledge centres than small SMEs (11plusmn 100

employees) Not surprisingly it seems to be somewhatnon-regional customers There is hardly any diVerenceeasier for larger small reg rms to realize contacts with

in these reg ndings between size categories On theknowledge centres Much more relevant howeverquestion of whether they were explicitly looking forwere respondentsrsquo opinions about the relevance of suchco-operating partners in their own region the respond-innovation impulses with respect to regional originents mostly answered `No why should Irsquo One entre-the most important impulses were transmitted frompreneur explicitly answered `The only geographicalknowledge centres located outside the region In nearly

factor is the national borderrsquo On the other hand manyall cases this means elsewhere in the Netherlands In

respondents conreg rmed that existing personal relationsrsquothe Netherlands distance to a knowledge centre doeswere important for establishing contacts with othernot therefore seem to be a problemreg rms But in the Dutch spatial context `existing per-Only 17 SMEs stressed the relevance of regionalsonal relationsrsquo seemingly extend beyond the bound-institutions (Chambers of Commerce Innovationaries of Utrecht even though this is certainly not theCentres labour unions employersrsquo unions) Contacts

smallest Dutch Corop regionwith these institutions were not considered particularlyHorizontal partners mainly other SMEs were morerelevant for the innovative development of the reg rm

often found in the region itself But the role of theseThey have more to do with daily problems althoughregional partners for the innovative development of thethey include information about training and retrainingreg rms involved was considered much less important thanschemes as well Surprisingly innovation centres whichthe role of vertical partners customers and suppliershave been especially created by the Dutch Government

A similar picture was found for co-operation withto stimulate the innovation activities of SMEs wereknowledge centres (Fig 7) Although the Utrechtnot mentioned at all This may have to do with theregion is endowed with many such centres most offact that these centres are focused on technology andthe contacts that were judged important took placemanufacturing reg rms It may also be related to the smallwith centres located elsewhere This is especially truesize of the reg rms in our studyfor research activities Only three of the ten Utrecht

SMEs that co-operated formally with knowledgeRE G IO NA L CL US T E RS

centres in the reg eld of RampD collaborated with a partner

located within the province of Utrecht Four SMEsFor testing the hypothesis about regional clusters weeven collaborated with partners from abroad Andshould explicitly concentrate on the role of regionalalthough we concluded earlier that it is easier for lessactors This part of the paper therefore concentrates

small SMEs to establish informal co-operation linkson the Utrecht region This region conreg rms ourwith knowledge centres this does not result in thehypothesis Most of the customers and suppliers thatUtrecht SMEs forging strong links with their ownare considered relevant for the innovative developmentregional centres However our Rotterdam respondentsof the interviewed SMEs are located outside the regionreported more regional informal contacts which they(Fig 6)considered not very important for their innovativeNone of the SMEs interviewed in fact co-operated

activities Of course this outcome may be inmacr uencedexclusively with regional customers On the other

hand six received innovative impulses exclusively from by the fact that we included only the bigger knowledge


The reg rst relates to the use of the relatively old

BUTCHART 1987 classireg cation This classireg cation

published in 1987 and based on yet older data may

have inmacr uenced our results We all know that the lifecycle of new products is shortening drastically It may

be hypothesised (NOOTEBOOM 1996) that the life

cycle of regional clusters of high technology SMEs is

shortening as well in the sense that spatial clusters of

new activities will be confronted with deconcentrationtrends much more rapidly than new activities in the

1960s and 1970s If this argument is correct we might

perhaps have found regional clusters of BUTCHART rsquos

1987 high technology SMEs if we had carried out

our research in the 1970s or if we had concentrated

our research on reg rms carrying out really new activitieswhich may well not be included in the relatively old

Butchart classireg cation The multimedia sector mightFig 7 Formal and informal co-operation withbe a case in point VAN ECK VAN DER SLUIJS et alknowledge centres1998 found a clear concentration of reg rms in this

sector in the northern wing of the Randstad This

concentration may perhaps include inter-reg rm clus-centres We know (VAN WEESEP and WEVER 1996)for example that by far the largest share of all contract tering as well On the other hand we should of course

avoid the danger of drawing general conclusions onresearch at the University of Utrecht is not carried out

for small regional business reg rms but for big inter- the basis of research involving rather exceptional cases

The second question has to do with some character-national pharmaceutical firms such as HoVman-La

Roche Solvay-Duphar and Glaxo-Wellcome istics of our research scheme We concentrated onrelatively small regions the municipality of RotterdamThe relative absence of links between our high

technology reg rms and regional knowledge centres is and the province of Utrecht The latter is a region that

is centrally located within the Netherlands accessiblenot surprising Studies stressing such regional links are

often focused on reg rms that are more RampD-based than from any location in the country within two hours

by car Although other research results (GLAS 1996)the reg rms we are dealing with Thus L AWTON SMITH

1998 found that in Oxfordshire 66 of all RampD- provide little support for this our outcomes might havebeen diVerent if we had carried out our research in abased reg rms had links with the local university and local

public sector laboratories But there as well for reg rms bigger region that is oriented less exclusively towards

business services and is less centrally located within thein the computer and business services sector this per-

centage was much lower at only 29 Netherlands

The third question has to do with our dereg nition of

SMEs We only included reg rms with fewer than 100employees so it is not surprising that we found a large

S OME CONCL UD I NG RE MA RK Snumber of very small reg rms The size of our respondents

may explain why links with universities or other institu-Our research drew upon the theoretical literature about

innovative regional milieux and has argued that we tions are rather weak and why formal and one-sided

contacts with their relatively big customers dominateshould be careful about transferring research reg ndings

from one spatial context to another On the basis Certainly some of our results would have been quitediVerent if we had interviewed much larger highof EIMrsquos national database we tested the hypothesis

concerning the existence of regional (in the Dutch technology service reg rms In that case we might have

found more links with universities and a more impor-sense) clusters (that is a concentration of reg rms with

intraregional linkages) of high technology SMEs within tant role for informal contacts There is however no

obvious reason why such reg rmsrsquo regional links in thethe Randstad especially in the province of Utrechtthe most important region for such SMEs and the Dutch sense would be much more important

municipality of Rotterdam Although only a small

number of interviews (94) could be achieved our

outcomes are in line with both hypotheses the spatialNOT E Spattern of high technology SMEs in the Netherlands

closely follows the general spatial pattern of reg rms and 1 Using the number of high technology reg rms per 10000regional clusters hardly exist However three qualireg ca- inhabitants gives nearly the same resultstions to or comments on these reg ndings should perhaps 2 This questionnaire was developed as a collective enterprise

by the members of the TSER Network at its 1996be made


3 The importance of co-operation with external partnersSophia-Antipolis meeting It covers seven themes charac-

teristics of the reg rm characteristics of the local labour in innovative activities was measured using a reg ve-stepLikert scale The range of the scale varied frommarket relationships with customers suppliers know-

ledge centres other actors and sources of collective 1 5 nonexistent to 55 essential with the range 3plusmn 5 being

considered as denoting importancelearning

RE F E RE NCE S

BOOZ ALLEN amp HAMILTON (1998) Netherlandsrsquo ICT Twinning Centers and Investment Funds Building the Mind-set and the

Skill Base for the Information Society Booz Allen amp Hamilton AmsterdamBUTCHART R L (1987) A new UK dereg nition of the high technology industries Econ Trends 400 82plusmn 88

CAMAGNI R P (Ed) (1991) Innovation Networks Spatial Perspectives Belhaven London

CHARDONNET J (1953) Les Grands Types de Complexes Industriels Sirey ParisCHESHIRE P (1996) The spatial impact of European integration paper presented at the 36th European Congress of the RSA

ZuEgrave rich

DE L IGT T and W EVER E (1998) European distribution centres location patterns Tijdschr Econ Soc Geogr 89(2) 217plusmn 23DRENTH D (1990) De informatica-sector in Nederland tussen rijp en groen een ruimtelijk-economische analyse Netherlands

Geographical Studies 108 Royal Dutch Geographical Society Utrecht

EVANGELISTA R and S IRILLI G (1997) Innovation in services and manufacturing results from the Italian survey WorkingPaper 73 ERSC Centre for Business Research University of Cambridge

FREEMAN C (1982) The Economics of Industrial Innovation Frances Pinter London

FROWEIN J C PENNINGS L J and VERSTAPPEN M J F (1998) De ICT Kennisinfrastructuur in Nederland Een BenchmarkingStudie in het Kader van het Actieprogramma Elektronische Snelwegen TNO-STB Den Haag

GLAS G (1996) IndustrieEgrave le netwerken Netherlands Geographical Studies 201 Royal Dutch Geographical Society Utrecht

HAKANSSON H (1993) The network as a governance structure interreg rm co-operation beyond markets and hierarchies inGRABHER G (Ed) The Embedded Firm On the Socio-economics of Industrial Networks pp 35plusmn 51 Routledge London

HANSEN N (1992) Competition trust and reciprocity in the development of innovative regional milieux Pap Reg Sci 71

95plusmn 105

JACOBS D BOEKHOLT P and ZEGVELD W (1990) De Economische Kracht van Nederland Een Toepassing van Porters Benaderingvan de Concurrentiekracht van Landen SMO Den Haag

JACOBS D and VAN DER MEIJDEN R (1995) Waar haalt het MKB zijn kennis vandaan Econ Stat Ber 25 January

pp 80plusmn 83KAMANN D-J F (1998) Modelling networks a long way to go Tijdschr Econ Soc Geogr 89 279plusmn 97

KEEBLE D (1997) Small reg rms innovation and regional development in Britain in the 1990s Reg Studies 31 281plusmn 93

KOERHUIS H and CNOSSEN W (1982) De Software- en Computer-service Bedrijven Geograreg sch Instituut GroningenLAMBOOY J G (1997) Knowledge production organization and agglomeration GeoJournal 41 293plusmn 300

LAWTON S MITH H (1998) Institutionalisation of informal networking and collective learningrsquo in the Oxfordshire high

technology economy in KEEBLE D and LAWSON C (Eds) Collective Learning Processes and Knowledge Development in theEvolution of Regional Clusters of High Technology SMEs in Europe pp 85plusmn 97 ESRC Centre for Business Research University

of Cambridge

LUNDVALL B A (1988) Innovation as an interactive process from user-producer interaction to the national system ofinnovation in DOSI G FREEMAN C NELSON R S ILVERBERG G and SOETE L (Eds) Technical Change and Economic

Theory pp 349plusmn 69 Frances Pinter London

LUNDVALL B A (1992) National Systems of Innovation Towards a Theory of Innovation and Interactive Learning Routledge LondonLUNDVALL B A (1993) Explaining interreg rm co-operation and innovation limits of the transaction-cost approach in

GRABHER G (Ed) The Embedded Firm On the Socio-economics of Industrial Networks Routledge London

MORGAN K (1997) The learning region institutions innovation and regional renewal Reg Studies 31 491plusmn 503NELSON R (Ed) (1993) National Innovation Systems Oxford University Press Oxford

NOOTEBOOM B (1992) Towards a dynamic theory of transactions J Evolutionary Economy 2 281plusmn 99

NOOTEBOOM B (1996) Innoveren Globaliseren Econ Stat Ber 9 October pp 828plusmn 30OAKEY R (1995) High Technology New Firms Variable Barriers to Growth Paul Chapman London

OECD (1994) The OECD Jobs Study OECD Paris

OERLEMANS L A G (1996) De Ingebedde Onderneming Innoveren in IndustrieEgrave le Netwerken Tilburg University Press TilburgPORTER M (1990) The Competitive Advantage of Nations Free Press New York

STOREY D J and TETHER B S (1998) New technology-based reg rms in the European Union an introduction Res Policy

26 933plusmn 46STORPER M (1995) The resurgence of regional economics ten years later the region as a nexus of untraded interdependencies

Europ amp Urban Reg Studies 2 191plusmn 221

TAMAAcirc SY C and STERNBERG R (1998) Informal networking and collective learning by innovative SMEs in Germany inK EEBLE D and LAWSON C (Eds) Collective Learning Processes and Knowledge Development in the Evolution of Regional Clusters

of High Technology SMEs in Europe pp 123plusmn 34 ESRC Centre for Business Research University of Cambridge


VAESSEN P M M (1993) Small Business Growth in Contrasting Environments Netherlands Geographical Studies 165 Royal

Dutch Geographical Society UtrechtVAESSEN P and KEEBLE D (1995) Growth-oriented SMEs in unfavourable regional environments Reg Studies 29 489plusmn 505

VAESSEN P and WEVER E (1993) Spatial responsiveness of small reg rms Tijdschr Econ Soc Geogr 84 119plusmn 31

VAN ECK VAN DER SLUIJS P A HULSHOFF H E and PRINCE Y M (1998) Jonge Kleine Innovatieve ICT-Bedrijven inNederland EIM Zoetermeer

VAN W EESEP J and WEVER E (1996) Een Universiteit in Utrecht De Banden Tussen Universiteit Utrecht Stad en Regio University

of Utrecht Utrecht


The Randstad or more generally the Netherlands sector even when no innovation aspects are involved

Such diVerences make the Randstad case as regardscan be considered an interesting case concerning the

location and the spatial clustering of high technology high technology services of particular interest

reg rms This is reg rstly because of its specireg c spatialcontext which is quite diVerent from that in which

HI G H T E CHNOL OG Y CL US T E RS INthe Cambridge Phenomenon the `Third Italyrsquo the

T H E D UT CH S PAT IA L CONT E X TCatalonian or Sophia-Antipolis high technology clus-

ters operate The Dutch context is characterized by its Although the Dutch spatial context is specireg c we often

use the results of research in which notions like localrestricted national size and consequently relatively smalldiVerences between regions Although the Netherlands regionalrsquo or `high technologyrsquo have quite another

meaning than in the Netherlands So our research isas a whole is comparable in size with Baden-

WuEgrave rttemberg 12 provinces and 40 statistical areas also directed towards the identireg cation of `Third Italiesrsquo

`Porter clustersrsquo `Cambridge phenomenarsquo or innovative(Corop regions) can be distinguished The Dutch pub-

lic educational system is extremely deconcentrated milieux in general We argue that the relatively homo-

geneous Dutch spatial context inmacr uences the locationUniversities and polytechnics are evenly spread overthe country implying that there are no large variations of high technology reg rms and the spatial clustering of

high technology reg rms in a very specireg c wayin regional education levels Information is easily avail-

able from local Chambers of Commerce or Innovation As the literature abounds with theories dealing with

clusters of high technology reg rms andor innovativeCentres which are distributed evenly over the country

as well Moreover there are no regional institutional milieux we will not dwell at length on them The idea

behind resource munireg cence theory a more or less neo-diVerences Employees and employers are primarilyorganized nationally Wage negotiations are conducted classical approach is that conditions for reg rms to innov-

ate diVer regionally It is assumed that some regionsat the national level implying that regional diVerences

in labour costs per sector hardly exist There are hardly have a more favourable resource base than others better

educated labour more and better knowledge centresany regional or local taxes As a consequence diVerences

in regional business conditions are relatively small more venture capital reg rms more high-quality servicesetc Such a resource base might stimulate reg rms toA second argument makes the Randstad an interest-

ing case The literature about clusters of high techno- innovate (OERLEMANS 1996 KEEBLE 1997)

The learning economy or learning region approachlogy reg rms deals primarily with high technology

manufacturing reg rms (O AKEY 1995 OERLEMANS (LUNDVALL 1992 NELSON 1993 STORPER 1995

MORGAN 1997) building on Schumpeter and much1996) However the Dutch economy as a whole can

hardly be characterized as high technology According to more evolutionary in character is based on the idea thatinnovation is the outcome of a process of interactionthe OECD 1994 the employment share of high and

medium technology industrial activities as a proportion between customers suppliers and knowledge centres

As a consequence proximity of these actors and anof all manufacturing employment in the Netherlands

was only 40 in 1994 against 54 in Germany Perhaps institutional framework that favours interaction will

stimulate the formation of regional clusters of innova-this is one of the reasons why attempts to attract foreign

high technology reg rms to the Netherlands often fail tive activitiesThis aspect of interaction can also be found in acompared with Dutch success in attracting distribution

companies (JACOBS et al 1990 D E L IGT and number of other approaches for example in the network

approach of the IMP research group (HAKANSSON WEVER 1998) More generally the Dutch high

technology sector is heavily dominated by high techno- 1993 KAMANN 1998) In this approach the role of

sustainable stable interpersonal relations is stressedlogy business services especially activities in the reg eld

of information and communication technology the implying again the relevance of institutional and prox-imity aspects In Nooteboomrsquos dynamic transaction costsICT sector High technology business services diVer

in several respects from high technology manufacturing approach (NOOTEBOOM 1992 1996) innovation is

linked to transaction costs and distance According toreg rms Compared to manufacturing customers of (high

technology) services generally account for more Nooteboom regional clustering is especially attractive

when the activities involved are in the reg rst phase ofinnovation impulses than suppliers although someauthors claim the opposite (eg EVANGELISTA and their product life cycle In this phase particularly the

exchange of tacit knowledge which requires distance-S IRILL I 1997) Often these customers ask for services

made to measure implying that something new has to sensitive face-to-face contacts in order to avoid high

transaction costs is importantbe added to a standard service leading to incremental

innovation (FROWEIN et al 1998) At the same time The last approach we will deal with is the well-

known theory of regional innovative milieux con-it is again compared to manufacturing much morediYcult to dereg ne notions like product and process nected with the GREMI research group (CAMAGNI

1991 HANSEN 1992) It includes notions like `net-innovation in the service sector And face-to-face con-

tacts are always essential in the (high technology) service worksrsquo transaction costsrsquo trustrsquo and regional embed-































































of reg rms (Fig 1)




























Centre etc














































































































































RE F E RE NCE S





ZuEgrave rich









95plusmn 105








of Cambridge





















of Utrecht Utrecht































































of reg rms (Fig 1)




























Centre etc














































































































































RE F E RE NCE S





ZuEgrave rich









95plusmn 105








of Cambridge





















of Utrecht Utrecht














Centre etc














































































































































RE F E RE NCE S





ZuEgrave rich









95plusmn 105








of Cambridge





















of Utrecht Utrecht

























































































































RE F E RE NCE S





ZuEgrave rich









95plusmn 105








of Cambridge





















of Utrecht Utrecht







of Utrecht Utrecht

Clusters of High Technology SMEs: The Dutch Case

Documents

Transcript of Clusters of High Technology SMEs: The Dutch Case