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reports (European Commission, 2011), the amount
and quality of knowledge circulating and spilling
over between firms, located in a cluster, is
dependent upon 3 characteristics:
1. The cluster's size;
2. The degree to which it is specialized;
3. The extent to which the locality (the region) is
focused upon production in the relevant
industries comprising the cluster.
The European Cluster Observatory shows the
extent to which clusters have achieved this
specialized critical mass by employing measures of
these three factors as described below, and assigning
each cluster 0, 1, 2 or 3 stars depending on how
many of the below criteria are met. For our analysis
we have used data about clusters, which received at
least one star (also 1, 2 or 3 stars) in this assessment.
Deeper insight into methodology of star
apportioning is described below (European
Commission, 2011):
1. A cluster has received the “size star”, if
employment reaches a sufficient share of total
European employment, it is more likely that
meaningful economic effects of clusters will be
present. The size measure shows whether a
cluster is in the top 10% of all clusters in Europe
within the same cluster category in terms of the
number of employees.
2. A cluster has received the “specialization star”, if
a region is more specialized in a specific cluster
category than the overall economy across all
regions. This is likely to be an indication that the
economic effects of the regional cluster have
been strong enough to attract related economic
activity from other regions to this location, and
that spillovers and linkages will be stronger. The
specialization measure compares the proportion
of employment in a cluster category in a region
over the total employment in the same region, to
the proportion of total European employment in
that cluster category over total European
employment. The measure needs to be at least 2
to receive a star.
3. A cluster has received the “focus star”, if a
cluster accounts for a larger share of a region's
overall employment, it is more likely that spill-
over effects and linkages will actually occur
instead of being drowned in the economic
interaction of other parts of the regional
economy. The focus measure shows the extent to
which the regional economy is focused upon the
industries comprising the cluster category and
relates employment in the cluster to total
employment in the region. The top 10% of
clusters, which account for the largest proportion
of their region's total employment, receive a star.
National statistical offices of participating EU
countries have been picked up as data sources for
Star cluster reports and data in these reports reflect
the situation in years 2001 – 2008, where in majority
of countries with reference year 2008. For the
purposes of our analysis, we have calculated
indicator consisting of Nr. of people employed in
clusters that had received at least one star through
Star Cluster assessment, divided with the Nr. of
inhabitants for every EU 27 country (later in text
marked as % CLU). The values of % CLU indicator
for EU 27 countries are shown in table 1. European
Countries are divided in the table into two groups,
first group consisting of 15 member countries in the
European Union prior to the accession of ten
candidate countries on 1st May, 2004 (labeled as
EU15) and countries entering into EU after 1st May,
2004 (labeled as EU new).
Table 1: Values of % CLU indicator for EU 27 countries
divided into EU 15 and EU new.
EU 15 EU new
Belgium BE 7.5 Bulgaria BG 10
Denmark DK 14.5 Czech Rep. CZ 9.9
Germany DE 8.1 Estonia EE 10.1
Ireland IE 8.6 Cyprus CY 9.3
Greece GR 8.3 Latvia LV 6.7
Spain ES 10.4 Lithuania LT 7.3
France FR 6.9 Hungary HU 7.7
Italy IT 10.6 Malta MT 11.7
Luxembourg LU 16 Poland PL 5.5
Netherlands NL 7.3 Romania RO 10.0
Austria AT 11.7 Slovenia SI 10.9
Portugal PT 10.7 Slovakia SK 7.9
Finland FI 8.5
Sweden SE
8
UK
7.8
4.2.2 Dependent Variables
As a dependent variable, we have been looking for
an indicator reflecting the level of innovation
activity of SMEs in EU 27 countries. For the
purposes of our analysis we have decided to use the
Innovation Union Scoreboard 2011 (European
Commission, 2011) as a source. Specifically, we
have used two indicators from this report:
1. The indicator 3.1.1 - SMEs introducing product
or process innovations as % of SMEs (later in
text labeled as % PPI), since technological
innovation, as measured by the introduction of
new products (goods or services) and processes,
KnowledgeNetworksasaSourceofKnowledgeInitiativesandInnovationActivityinSmallandMediumEnterprises-
RegressionAnalysisforEU27Countries
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