Why Washington’s Top Down Industrial Clustering Policy Will Fail

Government run industrial clustering, like we have in Washington, and which has been inflicted on Spokane, has been tried in Japan and failed:

Faced with declining competitiveness, Japan launched a series of top-down initiatives in the ’80s to boost innovation. It invested billions of dollars in creating industry clusters—by developing large technology parks and providing subsidies for companies that locate in them. All these efforts failed to achieve their objectives. Undeterred, the Japanese government is doubling its bet and creating a new cluster in Okinawa. With a world-class research university as its nucleus, it hopes to turn this tropical paradise—which happens to be home to America’s largest Asian military base—into a global research-and-development center.Doubtless the university will provide Japan with significant long-term benefit. But the cluster will fail: All the other ingredients for innovation are missing.

via Okinawa’s Doomed Innovation Experiment – BusinessWeek.

Like Spokane, Japan plans to re-make Okinawa into an “info tech, biotech and environmental science cluster” at the direction of the government. Unlike Spokane, Okinawa will have a comprehensive research university.

But these plans will fail, says the author, because:

The Japanese have it all wrong. The original clusters failed—just as nearly all the cluster development projects all over the world fail—because the basic premise is wrong: Governments can’t mandate or manufacture innovation, no matter how much they invest. Clusters happen where like-minded entrepreneurs congregate, start risky ventures, and learn from one another other by networking. Innovation is a by-product of this synergy and experimentation. What is needed is less government control, not more.

Read the linked story, above. The story is a mirror image of what is happening in Spokane – and documents why industrial clustering will fail here, for the same reasons.

More about Washington’s industrial clustering policy is here. Spokane’s industrial clustering policy, set down by Olympia, is not going to work – except to the extent the State is making it happen by funding more government and more health care in Spokane.


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