Cluster initiative development process in Malaysian policy-led cluster

Abstract

Cloning of successful clusters like Silicon Valley with the anticipation that externalities produced will make firms competitive and create a buzz for the whole cluster, resulted in an outbreak of clusters throughout Asia. However, the literature has not adequately addressed whether and how cluster initiatives or cluster programs are developed in policy–led clusters, a cluster built from the scratch by the government. Traditionally, the cluster literature has focused on the spontaneous cluster rather than policy-led clusters. In fact, cluster initiatives, which are the organized actions to enhance the competitiveness of clusters, have recently gained the attention of researchers. The eminent researchers recommend that the success of initiatives depends on the effective cluster organization, public-private collaboration and firms‘ active role in the cluster governance. In response to the scarcity of cluster literature on these dimensions and dearth of scholarly work about the policy-led clusters, this research attempts to generate fresh insights into how cluster initiatives are developed in policy-led clusters. Multimedia Super Corridor (MSC), as a case study was selected for two key reasons. Firstly, it fits in the definition of a policy-led industrial cluster, and secondly, a plethora of initiatives is offered to the firms located in this cluster. An interpretivist paradigm with an embedded single-case study using Modified Delphi method and in-depth interviews were conducted to get the views of 13 experts and 17 informants from MSC firms and Multimedia Development Corporation (MDeC). The data analyzed generated qualitative themes. It was found that the cluster faced a myriad of challenges namely: firm‘s dependence on government support, bureaucracy, talent mobility, lack of interest of venture capitalists, lack of inter-firm collaborations and knowledge sharing, lack of trust, as well as absence of clusterpreneur and quality workforce. Moreover, the developmental state model of governance practiced in Malaysia over the years had been instrumental at the beginning of the cluster‘s life cycle. Admittedly, but at this stage of the cluster life cycle, there is a need to activate social cohesion and innovation related collaboration among the firms. This research recommends that MDeC must adopt administrative decentralization because of the diminished capacity of the bureaucrats in the face of high-end technology development, and to effectively utilize the strategic knowledge through collaboration and sharing as well as engagement with companies located in the MSC. The originality of the research lies in the proposed framework of a collaborative regime based on negotiated and synergistic public–private alliance for cluster initiative development