Thursday, December 13, 2012

Place Branding and Place Surrogacy: The Making of the Masdar Cluster in Abu Dhabi
INSEAD Working Paper 2012/130/IIPI

The literature on cluster development almost unanimously regard ‘clusters’ as the co-location of businesses along a supply-chain ultimately culminating in the territorial concentration of certain economic activities. This paper presents a different strategy of cluster development, the renewable energy cluster in Abu Dhabi known as Masdar, which is based on the twin-strategy of ‘Place Branding’ and ‘Place Surrogacy’. The Masdar experience presents an interesting approach to cluster development that involves planting the seeds of a local renewables industry overseas (through making investment and engaging in worldwide place branding activities) whilst preparing the minds and ground for its eventual transplantation back home when conditions for the transfer are suitable. Such a ‘spin-in’ based surrogacy model of cluster development, which is yet to prove its success, differs from the conventional wisdom with regard to the importance of both start-up and spin-offs during cluster emergence.