Scotland’s low carbon transition is increasingly framed as an opportunity for the commercialisation of low carbon technologies, green economic growth and the creation of green jobs. This report considers historic efforts of industrial clustering in Scotland to highlight opportunities and challenges of cluster policy making across both manufacturing and innovation.

The first part of the report looks at the characteristics of industrial clusters, including geographic proximity and knowledge exchange networks and the dynamics of cluster growth. It also provides an overview of policy mechanisms to encourage cluster formation and efforts to shift away from historically entrenched but unsustainable clusters.

We also study three case studies; the 'Silicon Glen', the Intermediary Technology Initiative (ITI) and Wave Energy Scotland (WES), to draw lessons for policy.

Key findings and lessons for policy  
  • Clusters are not simply an agglomeration of actors from similar industrial sectors in a concentrated geographic area.
  • There is a need to ensure proposed new clusters are well suited to the industrial, economic and social characteristics of the locality and the industrial sector of focus.
  • Policymakers need to take steps to ensure that foreign investment is not limited to relatively low-cost and low-skill ‘screwdriver shop’ work.
  • Future innovation cluster policies should be developed with a stronger connection to their target sectors or industries.

The research is part of an ongoing CXC research project analysing green industrial strategy in Scotland, particularly in relation to the low carbon heat sector.