Regional economic development: The role of regional government in the development of internationally competitive industry clusters

Since its publication in 1990, many governments throughout the world have used Michael Porter’s Industrial Cluster Theory (ICT) as a tool in national and regional economic development. Australian federal and state governments are no exception, and in the last decade, there have been numerous attempts to improve Australia’s economic development with implementations of ICT. Most of these efforts have been of limited success, with Australia’s record at developing industrial clusters well below the OECD average. One of the major reasons for this has been difficulty in using Porter’s theory, and in particular his ideas concerning the role of government, in industrial cluster development. This observed difficulty provides the research opportunity for this book; it focuses on the role that the Tasmanian state government played in the development of one of Australia’s most successful industrial clusters, the Tasmanian Light Shipbuilding Industry (TLSI) cluster. The book is based on a longitudinal case study, and included interviews with 25 key informants: six of these were current heads of Tasmanian government departments (including the TLSI cluster’s training facilities); five were ex-state premiers spanning the TLSI cluster’s history (1977-1998); one was the incumbent current state premier in 2002 (the late Jim Bacon); three were senior bureaucrats that had served the state parliament from 1977-1998; one was an incumbent Member of the federal House of Representatives for Tasmania (that has served between 1977-2010); and finally, the nine founding managers of the TLSI cluster’s private sector firms. In order to address the research opportunity, this book seeks to answer the following question: What role did the Tasmanian Government play in the development of the TLSI cluster? The answers to this question reveal a distinct set of government roles that proved beneficial to the TLSI cluster during its first 25 years of existence. The roles that the Tasmanian government had to play were changeable over time, and ranged from an initially non-committal stance towards the industry, to one that was heavily involved in its infrastructure requirements. The study also found that the role of chance events in Porter’s ICT deserved considerably more prominence than the theory suggested.