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			HOME > What is an Industrial Cluster? “Cluster” originally meant a bunch of grapes; by extension, it is now used to refer to a group or gathering of related elements. The Industrial Cluster Project is a program in which regional SMEs and start-up companies utilize innovative research results or “seeds” obtained at universities and research institutes to form industrial clusters (putting in place the environment so that an ongoing series of new businesses will be created, thereby fostering the evolution of a concentration of industries in a wide area around a focal core of highly competitive industries), in fields such as IT, biotechnology, the environment, and manufacturing. The goal of this project is strengthening the competitiveness of Japanese industry. The most salient key word in forming industrial clusters is innovation. In concrete terms, that means exerting a significant impact on the economy and society by marketing competitive products and commodities based on new technologies and ideas. The basic idea of the Industrial Cluster Project is to prepare regional environments to give rise to a stream of innovations. The Ministry of Economy, Trade and Industry (METI) plans, by preparing such environments, to form regional industrial clusters that will include both start-up companies and world-class SMEs. To strengthen the global competitiveness of Japanese industry and to invigorate Japan’s local economies, the Industrial Cluster Project carries out the missions stated below with the objective of businesses, universities, and other institutions, in regions throughout Japan, forming wide-area networks through partnerships between businesses, universities and government agencies, between businesses in the same industry, and across industrial sectors. Those networks, through synergetic sharing of participant’s intellectual and other resources, will then reach the state in which they generated new industries and businesses, mainly in their regions (that is, become productive industrial clusters). (1) Preparing a business environment that promotes innovation (2) Creating new industries in the fields defined as of strategic importance in the Economic Growth Initiative and other national programs (3) Fostering the emergence of synergistic effects through tie-ups with the regional promotion policies that local governments and other bodies implement (1) In a change from implementing policies uniformly throughout Japan under centralized management, policies are implemented first and foremost by those actually working in the field, under the field workers know best principle. (2) The project secures the appropriate tools for constructing the networks that are the cores of clusters and strategically applies the policies and programs of other ministries, departments, bureaus, and organizations to support research and development of other tools, partnerships between businesses, development of marketing channels, entrepreneurship, human resource development, and other critical factors. Grounded in examples from other countries, policies and measures are implemented from a long-term point of view, over a span of decades. The ultimate objective is to form industrial clusters that have the properties stated below: (1) Chain reactions of innovation (2) Optimization of industries and strengthening of their tolerance to changing environments (3) Accelerating the formation of international clusters and enhancing their quality as a region’s international brands increase their centripetal force, becoming able to attract more businesses, people, and investment from throughout the world. Reference - Positioning in National Strategy References to the Industrial Cluster Project in Japan's Economic Growth Initiative  Economic Growth Initiative(excerpt) Financial and Economic Comprehensive Reform Meeting (July 6, 2006) III. Revitalizing Regional SMEs (regional revitalization strategy) 1. Vitalizing regional business management (6) Regional technological development and industry-university-government collaboration   By improving and tightly structuring industry-university-government networks and promoting technological development in each region, we aim to create 40,000 new businesses in five years in the areas and regions being targeted by the new Industrial Cluster Project. Furthermore, while further improving coordination between knowledge clusters and industrial clusters, the government as a whole strives to form regional science and technology clusters. References to the Industrial Cluster Project in the “Third Term Science and Technology Basic Plan”  Third Term Science and Technology  Basic Plan(excerpt) Cabinet decision (March 28, 2006) (4) Constructing regional innovation systems and dynamic communities 1. Forming regional clusters   Creating regional clusters requires not only R&D through industry-university-government collaboration but also such diverse activities as smoothing the path to financing, support for creating new business, improving market environments, and building cooperative networks. It is, therefore, necessary to implement community-wide strategic initiatives and long-term programs in collaboration with related institutions. The government will continue to provide, on a competitive basis, support for activities to create clusters under local community initiatives. In such cases, the government will assess the global competitiveness of each region, depending on the progress made in forming clusters, and lend intensive support to regions having the potential to develop into world-class clusters, as well as fostering clusters nationwide, however small in scale, by capitalizing on regional strengths. Fomulation of Second Term Medium-range Industrial Cluster Project Background In order to strengthen the competitiveness of Japan’s industries and promote the autonomy of local economies led by the endogenous development, it is essential to establish networks in regions for collaboration among enterprises, universities and government agencies, and develop a business environment creating new industries and new businesses. Therefore, upon the policy assessment of the Industrial Cluster Project, toward the creation of further innovations due to the promotion of the Project, the objective and target of the Project have been established anew, and also collaboration with related measures and agencies has been defined clearly. In addition, existing projects were reviewed individually, reorganized and integrated. Elements of the Medium-range Plan 1. Creation of mechanisms for “commercialization” and “autonomy” In addition to creating mechanisms for matching large corporations with specialized trading companies, encouraging the programs for ensuring the autonomous development of clusters. 2. Pursuit of broad-area networks through collaboration among clusters By leveraging each cluster's mechanisms for commercialization (e.g., sales outlets, experimental production), facilitating broadarea networks. 3. Promotion of global expansion Forging partnerships with overseas clusters in collaboration with JETRO. 4. Introduction of PDCA Assessing cluster projects with the introduction of PDCA and reflecting the results next year. [Planning period]   From April 1, 2006 to March 31, 2011 [Numerical target]   Creation of 40,000 new businesses launched* during the 5-year planning period *New businesses launched include: experimental production, manufacturing, and marketing of new merchandises or products, introduction of new manufacturing technologies, and introduction of new services. [Basic principles]   The efforts are continued to form networks where each face is visible. Based on the networks, innovations are accelerated, and concrete achievements are pursued in the creation of new industries and businesses. In order to implement policies and measures more effectively, and also to make their effects last longer and spread wider, collaborations between related policies, agencies, ministries and local governments are pursued. In addition, international development, diffusion and penetration of measures, and the independence of project activities are established.