Selection of clusters

The defining elements of clusters (see Chapter 2.1.) provide an initial operationalization of clusters. They are formal or informal regional agglomerations of firms focusing on satellite navigation applications. In that, they are supported by a specialized infrastructure. The protagonists form a critical mass and are connected through vertical, horizontal and lateral links. The protagonists include large and small companies, start- ups, universities and business schools, research institutes, incubators, venture capitalists, as well as policy makers, regional business associations including unions, business service providers, technology transfer centers, and regional development agencies. Policy makers consist of governments at national, regional or lower level.

This definition already demands certain cluster characteristics. Firstly, each cluster needs to possess a regional center, which can and which probably will be independent of administrative borders. Secondly, the existence of horizontal, vertical and lateral links ensure a minimum level of interconnectedness in the cluster. Thirdly, the cluster composition requirements ensure the presence of market and technology players, allowing to capture both types of innovation triggers. Additionally, it ensures a minimum endowment with technological and complementary, financial and institutional assets (see Chapter 3.2.3). The focus on European satellite navigation clusters establishes comparable technological external conditions and the same external shock with the introduction of GALILEO. This shock should allow for observing innovation capabilities in path breaking circumstances.

According to theoretical sampling, the cluster selection process aims at choosing diverse clusters to enhance and enrich the range of insights and to enhance generalizability (see also Chapter 1.3). Following the insights generated in Chapter 2, cluster innovativeness could depend on assets and capabilities, which are formed by routines. Thus, the selected clusters should ideally posses the relevant assets, and provide an initial connectedness in order for capabilities to potentially be created. Assuming that capabilities are observed in

this study, choosing clusters with different routines, age and historical paths can inform the analysis of how capabilities are created. Different levels of formality will probably trigger different routines and thus inform the analysis. The cluster's industry affiliation is a probable indicator of the different historical paths. Still, innovation capabilities should expose their best practice characteristics in clusters across industries and thus should be observable independent of industry affiliation.

The links and complementarities in clusters define the cluster boundaries, which can change over time. This is in line with the socially constructed nature of both formal and informal clusters. The protagonists' identification with the cluster is decisive for the cluster's boundaries and their specific participation in the cluster. However, the positive impact of collocation should allow us to determine the regional area of the cluster. The European Commission's NUTS 3 regions provide a good measurement for capturing it. NUTS regions are defined along consistent criteria throughout Europe and the Eurostat collects data at this level that may be leveraged for triangulation (see also Doloreux & Parto, 2005, who apply the more imprecise NUTS 2 level).

I leveraged three data sources for identifying relevant European satellite navigation application clusters. These were firstly, existing cluster mapping exercises, secondly, archival data and thirdly, eight interviews with technology experts. The cluster mapping exercises provided least value in identifying satellite navigation clusters. Currently, several cluster mapping exercises are under way. Some address the national level (see, for example, www.kompetenznetze.de and www.berr.gov.uk), others the European (see, for example, www.europe-innova.org and Observatory of European SMEs, 2002) or the global level (see, for example, http://www.competitiveness.org/cid/ and Porter and Van der Linde, 2002). Of course, no comprehensive list of clusters does and ever will exist. On the one hand, this is due to the ongoing creation and decline of clusters. On the other, the criteria and thresholds applied to clusters, as well as their industries and technologies differ from exercise to exercise (see, for example, the review of European national practices in Observatory of European SMEs, 2002). Reviewing 22 databases, meta- studies, cluster project overviews and industry- and technology-specific cluster

the clusters operating in sectors proximate to satellite navigation technologies leveraged them to a substantial extent. The few technology-focused data sources did not break out satellite navigation technology.

Five archival data sources were most helpful in identifying European satellite navigation technology clusters. I started with a review of the regions that either are a siege of a GALILEO-related institution, or of a space-related incubator (http://esinet.ebn.be/), or that participate in the European Satellite Navigation Competition (former GALILEO Masters). I complemented them with eight interviews with satellite navigation technology experts on European product development hot spots and a review of the database on satellite navigation companies in Europe (www.best-in-space.com).

The ex ante identification of regions and the interviews produced a list of 19 potential European satellite navigation application regions. These have diverse industrial specializations, contain a diverse set of protagonists and are renowned for their technological expertise. I refined this list in several interviews with cluster representatives and with reviews of archival data on these clusters. Conferences and cold calls served to establish contact to the representatives. Fourteen clusters did not pass the thresholds established. Nine of the clusters on the list did not showing a significant focus on and expertise in satellite navigation technologies. Often, the clusters took the traditional focus on satellite navigation infrastructure development rather than application development. Similarly, few independent protagonists often drove the regional satellite navigation activities; the supporting infrastructure was missing or very rudimentary. Two clusters dropped out, as they turned out not to systematically work with satellite navigation technologies. As young clusters, three clusters did not promise new insights in the sense of theoretical sampling. Also, they were just starting the process of setting themselves up for satellite navigation and asked for a chance to participate in this study during the next, longitudinal phase.

This process allowed me to confirm five satellite navigation technology clusters that fulfilled the criteria to different extents. In line with the theoretical sampling approach of this research, they exhibited the appropriate technology focus but were at different ages (between one and more than ten years old), diverse participant compositions and industry affiliations as well as different degrees of formality and regional sizes (for a similar

approach, see Gerstlberger, 2004b). Table 12 illustrates this. All clusters were preparing for the technology shock at the time of selection. Thus, they promised insights into the different driving forces of innovativeness. To ensure the anonymity that was granted to the participants of this study, I will not use their names but assign codes.

Table 12: Theoretical sampling: Ex ante identifiable characteristics of selected clusters