Institutions for Collaboration
Core Frame
| General |
| Chambers of Commerce Professional associations School networks University partner groups Religious networks Joint private/public advisory councils Competitiveness councils |
| Cluster-specific |
| Industry associations Specialized professional associations and societies Alumni groups of core cluster companies Incubators |
Institutions for collaboration are formal and informal organizations that
- facilitate the exchange of information and technology
- foster cooperation and coordination
They can improve the business environment by
- creating relationships and the level of trust supporting them
- encouraging the definition of common standards
- facilitating the organization of joint action
- supporting the definition and communication of shared beliefs and attitudes
- providing mechanisms to develop a common agenda
Selected Massachusetts Organizations in Life Sciences
| Life Sciences Industry Associations |
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| University Initiatives |
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| General Industry Associations |
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| Informal networks |
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| Economic Development Initiatives |
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| Joint Research Initiatives |
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Why Do IFCs Arise?
| Market Imperfections |
| Transaction costs Externalities Imperfect information Natural monopolies |
| Government Failures |
| Inadequate provision of physical and institutional infrastructure Poor design of macro/ micro- economic policies |
Companies and individuals may form institutions for collaboration where market imperfections make individual firm action costly or ineffective
IFCs may emerge as a private sector response to government failure to provide adequate public goods or government policies impeding gains in productivity and competitiveness
Note that some may seek to capture value at the expense of other parties ("rent-seeking") rather than improve overall productivity
IFCs and the Competitiveness Diamond
| Firm Strategy and Rivalry |
| Encourage "rules of the game" that enhance productivity and competitiveness |
| Factor Conditions |
| Improve availability, enhance cost/quality combination of inputs Develop and operate infrastructure Spur dynamic improvements in inputs |
| Related and Supporting Industries |
| Build trust, relationships and collaborative mechanisms to lower transaction costs Spur the creation or attraction of needed suppliers and supporting services |
| Demand Conditions |
| Increase the size and sophistication of local demand through joint marketing, customer education, etc. Promote common standards and regulations that impose higher expectations on producers |
IFC Performance - Measurement Influencers
| Firm Strategy and Rivalry |
| Scope of membership Scope of activities Governance mechanisms Financing mechanisms Leadership |
| Factor Conditions |
| How efficiently does the IFC carry out its activities? What is the IFC's impact on productivity and competitiveness? |
| Related and Supporting Industries |
| Opportunity cost of resources and time Valuation of benefits Short term vs. long term impact |
| Demand Conditions |
| Economic, political, and social conditions/institutions Industry/cluster characteristics Presence and quality of other economically-relevant organizations |
IFCs in Less Developed vs. Advanced Economies
| Less developed |
| Greater tendency toward corrective, defensive, "gap-filling" roles of IFCs More transitional programs and evolution of IFC roles |
Less developed economies
- More market imperfections
- More government failures
- Limited range, sophistication of firms and other economically-relevant organizations (e.g universities, financial institutions, media)
- Less international connectedness
| Advanced |
| Increasing coordination needs among firms, government, universities Major influence of knowledge, technology, and internationalization in competition |
Advanced economies
- More extensive and frequent market transactions
- More established government institutions and infrastructure
- Greater range, sophistication of firms and other economically-relevant organizations