IoT innovation clusters in Europe and the case for public policy

Abstract The Internet of Things (IoT) is currently developing fast and its potential as driver of innovative solutions is increasing, pushed by technologies, networks, communication, and computing power, and has the potential to drive the development of technological ecosystems, such as innovation clusters. Innovation clusters are agglomeration of enterprises and research organizations, which cooperate, interact and compete, generating innovation and driving the growth of ecosystems. The narrative around innovation clusters has been developing since many years and policy-makers seek to use such clusters as a policy instrument to support the growth of technology on the one hand and regional and sectoral development on the other hand. This policy paper expands an empirical study on IoT innovation clusters in Europe and places it within the current debate around clusters and innovation clusters to provide evidence-based advice to policy-makers on what may and may not work as public policy measures. The paper highlights the findings of the interaction with several hundred European IoT innovation clusters and points out their points of view on their own creation factors, operational characteristics, and success stories, as well as their expectations in respect to policy interventions for IoT and for clusters. Suggestions for IoT policy-making are provided. The paper has also undertaken an extensive review of up-to date research on innovation cluster creation and performance, thoroughly analyzing the real possibility to define causal relationships between clusters, productivity and economic growth, and business performance, and providing suggestions for policy-makers on the approach to cluster policy.