From the Harvard Business Review:
Summary.
When many people think about business clusters, they immediately jump to the tech industry in Silicon Valley, or New York’s financial hub. But the idea of a local, industry-specific cluster in fact goes back hundreds of years. In this piece, the author examines the centuries-old textiles cluster in Bologna, Italy. Drawing on this example, he argues that a successful cluster must first and foremost be an adaptable one. Just as Bologna’s silk manufacturers evolved from a pre-industrial production process to hydraulic-powered, automated machinery, so too must other clusters ensure they are focused on constant education and improvement — or risk becoming obsolete.
Today when we talk about business “clusters,” we’re usually talking about the technology industry in Silicon Valley, the financial sector in London or New York, or automakers in southern Germany.
But clusters go back much further than these examples. “Businesses have clustered into networks of various sorts throughout history,” writes the U.S. National Commission on Entrepreneurship. “The medieval guild system was a primitive networking exercise.”
The most successful, enduring clusters are not stagnant. A look back at long-lasting clusters highlights the importance of adaptation to keeping a cluster vibrant, and the catalysts that keep it moving forward.
“He that will not apply new remedies must expect new evils; for time is the greatest innovator,” stated Francis Bacon. Nowadays, when a multitude of businesses are confronted with the leap from “dumb” products to creating smart, connected ones, and cities and regions are trying to make the leap from manufacturing to services, relying too heavily on past successes will only lock those clusters in the past.
An example of a cluster that has avoided what I call this “lock-in syndrome” is Bologna, Italy, one of the most remarkable and long-lasting clusters of history. Though many people know it for its packaging machinery cluster, they may not realize the deep historical roots of this industry, or how much it has evolved over time.
As with many clusters, a university sits at its center: founded in AD 1088, the Studium of Bologna was the major educational innovation of Europe’s second millennium. Europe’s first academic university was the epicenter of the guilds of wandering students (clerici vagantes). Spanning geographical barriers and shrinking the world of education, the resulting exchange of ideas between students and professors in a climate of freedom generated interactive spaces for knowledge creation, dissemination, and sharing. Those spaces were reservoirs rich in memories from which lessons for cluster formation would be extracted later.
About two hundred years later, towards the end of the thirteenth century, we start to see the first Bolognese silk mills, which became a major industry. The major innovation lay in an extraordinary machine already in use in Lucca, about 150 kilometers southwest of Bologna. This round, mechanical spinning machine was capable of twisting dozens and dozens of threads at the same time. The innovation of the Bolognese silk makers was to operate the Lucca machine with a hydraulic wheel, instead of by hand. Thanks to this technological innovation—made possible by Bologna’s canals and ample supply of water—by the 15th century, Bolognese mills had expanded from small-scale production to busy factories that took up three or four floors. Long before the Industrial Revolution, Bologna used this combination of hydraulic power and technology to bring silkworm farming to Europe at scale. Bolognese yarns were sold to the doges of Venice or exchanged for spices and salt, and they were also exported to the large international markets, to France, Germany, England and even to the East.
But when Industrial Revolution did arrive, it shook the Bolognese silk industry. In Bologna at the end of the 18th century, changing consumer tastes, labor costs, and production technologies all led to the contraction of the industry. The result was a deep and prolonged recession.
Nonetheless, today, the Bolognese “Packaging Valley” stands out internationally for its ability to meet the specialized needs of manufacturers throughout the world. Firms in the cluster design, manufacture, and assemble packaging machinery for a wide range of products, such as baked goods, confectionery, beverages, tea, tobacco, pharmaceuticals, and chemicals. They are known for demonstrating a special sensitivity to the market needs of the specialized manufacturers who use their services. Systems and machines are tailor-made to fit the specific needs of their customers, using innovative techniques and new packaging materials....
....MUCH MORE
