– Comparison of Polepharma (France) and Cité Biotech (Canada)
In the innovation-oriented economy, the knowledge-intensive industries drive region economic growth by leveraging local innovation ecosystem configurations and global innovation network connectivity. In this progress, the clusters, namely, “the geographic concentrations of interconnected companies and institutions in a particular field” (Porter, 1998), act as the basic territorial and functional units that contribute to the global competitiveness of local enterprises and industries (Bourdin & Nadou, 2018).
Research on cluster governance mechanisms mainly tackles the subject from two perspectives – the geographical proximity of industrial cluster and the organizational proximity of cluster network (Torre & Rallet, 2005). In the industrial clusters, the spatial agglomeration of specialized enterprises and labor reduces the transaction costs and triggers the “local buzz” knowledge spillovers among co-located economic stakeholders (enterprises, R&D centers, universities, governmental authorities, communities, professional associations, etc.). In the cluster networks, economic stakeholders establish closely connected network communities through the pipelines of cross-border trade, investment and R&D partnerships. Embedded in the global networks of clusters, novel knowledge is generated, transferred and absorbed both at local and global levels (Bathelt & Li, 2020).
Grounded on these two clusters governance mechanisms, entrepreneurs and policymakers implement different cluster strategies in the knowledge-intensive industries. Characterized by numerous multifunctional stakeholders, intensive knowledge exchanges, and complex innovation ecosystem composition, the pharmaceutical industry exhibit distinguished governance patterns of the clusters in different national contexts. In this article, I will compare the governance mechanisms of Polepharma (France) and Cité Biotech (Canada) to address this point.
In France, the formation of clusters is largely attributed to the centralized governance mechanisms of Network Administrative Organization (NAO), a separate administrative entity is set up specifically to govern the network and its activities (Provan & Kenis, 2008), that strengthen the strategic alliance formation of transregional networks. In the national cluster strategy of the French government, the NAOs are embodied as inter-regional “competitiveness poles” (les pôles de compétitivité) that facilitate strategic alliance establishment among key stakeholders in the strategic industries.
At the same time, this NAO model is less sensitive to location, since 46% of the clusters are localized in more than one French region (Hassine & Mathieu, 2020). For instance, Polepharma, a pharmaceutical NAO headquartered in Chartres (Centre-Val de Loire), has built a vast cluster network among affiliated cluster members (adhérents du cluster) across the regions of Normandie, Île-de-France, and Centre-Val de Loire. In this cluster network, Polepharma acts as the intermediate broker and stakeholder that coordinates inter-organizational linkage formation and sustain the overall network connectivity. Furthermore, Polepharma acts as an active stakeholder in start-up incubation and venturing. For example, founded in January 2021, the start-up Overseed solicited Polepharma as technical-regulatory supervisor in developing therapeutic cannabis products, and aimed to commercialize the products in March 2023 with the partnership support from Polepharma.
Additionally, as a key stakeholder of the French pharmaceutical industry, Polepharma forms strategic partnership with other NAO-governed pharmaceutical clusters in other French regions (e.g. Lyonbiopôle, Atlanpole Biotherapies, BioValley France) and abroad. In November 2021, Polepharma merged with GIPSO, the pharmaceutical cluster network in Nouvelle-Aquitaine, the Basque Country (Spain) and Navarre (Spain). Thereafter, it further extends its cluster networks in Southwest France and the bordering regions in Spain. Furthermore, the cross-regional alliance in the pharmaceutical industry is gradually integrated in the territorial mobilization of the metropolitan industrial upgrading in the French Tech initiative (Bourdin & Nadou, 2018).
Thanks to the coordination from the government authorities (e.g. Ministre de l’Économie, des Finances et de la Souveraineté industrielle et numérique, Bpifrance), the Polepharma-GISPO cluster network proactively interacts with the French Tech Metropoles in Normandie, Île-de-France, Centre-Val de Loire and Nouvelle-Aquitaine, and engages the cross-regional strategy implementation in the industrial competence upgrading.
Different from the NAO-governed cluster networks in France, the Canadian clusters mostly adopt decentralized participant-governed networks among co-located stakeholders based on spatial agglomeration. On the ground of the regional industrial specialization, both federal and provincial governments allocate government fundings for key stakeholders, including large and small companies, researchers and academics, not-for-profit organizations, and accelerators and incubators. In 2017, the Canadian government announced its ambitious “Superclusters” (Supergrappes) Initiative with over CA$1 billion investment in clusters of digital technologies, plant proteins, advanced manufacturing, scale AI and oceans across the Canadian provinces.
Nonetheless, the governmental engagement of Canadian government is mostly concentrated on financial support and policy orientation, while less on direct intervention and orchestration in the corporate business activities. For example, one of Canada’s large pharmaceutical cluster Cité Biotech in Laval (Québec) encompasses more than 5,000 individuals in 100 companies in life sciences within a 3 km radius in Laval, a satellite city in the Montréal Metropolitan Community. The cluster was first created by the government-university collaboration between the municipal government of Laval and INRS Armand-Frappier Santé Biotechnologie Research Centre. Unlike Polepharma, the formation of Cité Biotech is mostly concentrated on the spatial agglomeration and the knowledge spillovers among co-located stakeholders within the municipal boundary of Laval.
To accelerate the local industrial upgrading, the municipal government of Laval created the agency Laval Économique that provides supportive services to the businesses in Cité Biotech in finance, human resources, logistics infrastructure, policy orientation, and international collaboration to business establishments in Laval. However, it is less engaged in direct decision-making and business development of the cluster members, and does not exercise the administrative authority outside the municipal boundary of Laval, where Cité Biotech is located.
The examples of Polepharma in France and the Cité Biotech in Canada provides two patterns of cluster governance in the pharmaceutical industry. The French Polepharma is characterized by the organization proximity among cross-regional stakeholders under the centralized governance body of the NAOs that strengthens R&D cooperation inside clusters through public support (Hassine & Mathieu, 2020). In contrast, based on spatial proximity, the Canadian Cité Biotech follows a location-oriented decentralized governance pattern that generates spillover effects among co-located stakeholders within the industrial cluster. Local government agency provides supportive services, but does not enforce direct business mandates and engage in key decision-making upon cluster members.
There is a higher degree of autonomous decision-making among local businesses, but the network-level coordination and competence upgrading of this decentralized shared governance is relatively low (Provan & Kenis, 2008). When business managers in the pharmaceutical industry enter either market, they should be aware of the different cluster governance mechanisms, and adjust the focuses of the public-private partnership strategy accordingly.
References:
Bathelt, H. & Li, P. 2020. Processes of Building Cross-Border Knowledge Pipelines. Research Policy, 49, 103928.
Bourdin, S. & Nadou, F. 2018. La French Tech: Une Nouvelle Forme De Mobilisation Des Territoires Pour Faire Face À La Compétition Mondiale? Annales de Geographie, 612-634.
Hassine, H. B. & Mathieu, C. 2020. R&D Crowding out or R&D Leverage Effects: An Evaluation of the French Cluster-Oriented Technology Policy. Technological Forecasting and Social Change, 155, 120025.
Porter, M. E. 1998. Clusters and the New Economics of Competition, Harvard Business School Press Boston, MA.
Provan, K. G. & Kenis, P. 2008. Modes of Network Governance: Structure, Management, and Effectiveness. Journal of Public Administration Research and Theory, 18, 229-252.
Torre, A. & Rallet, A. 2005. Proximity and Localization. Regional Studies, 39, 47-59.
