2.1 The clusters of Northern Italy

In a study by Michael Storper (1995), in which he reviews the different literatures on regional economies (including flexible specialisation, industrial districts, clusters) he notes that a ‘Technology District’ in Northern Italy is rather different from other regional production systems: it has very small firms, and has a very high degree of regional closure i.e. the level of inter-trading within the region is very high. This may have led early theorists (in particular Piore and Sabel (1984)) to idealise the experience.

Similarly, but arising from a different school of thought, there is a risk that some of the business and organisational analysis literature has idealised the network model of production, in a similar way in which the mass production model was an ideal for much of the first two thirds of last century.

Storper (1995) reviews three main ‘schools of thought’: those interested in institutions, those interested in industrial organisation and transactions, and those interested in technological change and learning – each of which has developed different theoretical frameworks and research questions. He notes that the region has become an important level of analysis for many reasons, but argues that regional production systems (or clusters) are very different in regions around the world. Some of these production systems are competitive, but are not vertically disintegrated (i.e. broken down into supply chains of SMEs). They may include large organisations that play important roles e.g. through spin-offs, etc. so there is no optimum regional model of production. The challenge then is to explain how flexibility and specialisation as general characteristics are achieved within production systems at the regional level. And the key to this (or an important part, at the risk of oversimplifying) is a study of the role of institutions for example in reducing transactions costs (in one school of thought) or facilitating adaptation of the network of firms (in another school) or in facilitating a ‘learning economy’ (in the ‘untraded interdependencies’ school). Picking up on the earlier point of regional difference, the following case study considers a cluster in East Africa.

Activity 22

Read the following East African case study on a technology based cluster and answer the following question.

How is technological learning being fostered by the iHub?

iHub: An Information technology park in Kenya.

High speed internet, a comfortable and cool working environment, and a space for events and meetings to take place define iHub. It is run and managed by members of the local technical community. iHub is not just a business. iHUB acts as an Innovation Hub in Nairobi to grow a stronger technology community in Kenya, one where developers, designers, venture capitalists and businesses are connected and can mutually benefit from their respective dynamism and growth.

The key idea behind iHub is bringing under one roof a large group of technical people, especially those with information technology skills facilitating synergies and the fast track of development ideas. It also draws in people with capital and marketing experience to bring new technologies successfully and speedily to the fast changing technology market. iHub means researchers are no longer working in isolation to solve problems which other researchers may have already solved, or pursuing research in areas that have been abandoned by others in favour of alternative approaches, changing from mode one {linear approaches} to “mode 2” { non-linear ways of research}.

The iHub is intended to be a place where;

  • people share technology ideas; not steal them,
  • there is access to legal advice for example around copyright and marketing advice,
  • venture capital and production advice is available,
  • mentoring is available through face to face meetings or through video conferencing with mentoring links established with Silicon Valley in the USA and Bangalore, India.

The young IT inventors/innovators face a range of challenges. These include navigating the local regulatory environment, obtaining venture capital or meeting the specifications of a demanding local customer base. Discussing these issues with fellow inventors and mentors provides the opportunity to leapfrog learning in order to avoid costly mistakes.

iHub’s objective is to nurture talent and facilitate links between people who have a proven track record in techpreneurship. Successful innovators who see their businesses grow are expected to physically move on to provide space and opportunity for new IT inventors/innovators.

While iHub’s success has been realised due to local talent, a wider argument about the use of science parks and clusters is that they develop only if the base of talent can be maintained and grown larger. The Kenyan government now has two new initiatives which build on the success of iHub in different ways. The first is another ICT park called ‘Sameer ICT park’. The larger project is to build a whole new ICT based city just outside Nairobi currently being titled “Malili Technopolis”.


We asked the question, ‘How is technological learning being fostered by the iHub?’ It is fostered by research and collaboration within a cluster as a form of institutional learning for technology innovation.

If you want to find out more about Kenya’s science parks the following URLs have been provided:

2 Clusters and supply chains

3 Associations, NGOs and networks