†Exploiting  the  Potential  of  Creative  Digital  Business  Clusters  a  Strategic  Leadership  Challenge† by  Steve  Brewer  and  David  Rees   S. Brewer@soton. ac. uk  David. Rees@henley. reading. ac. uk    ABSTRACT   For  decades  Silicon  Valley  has  been  perceived  as  a  seed- †bed  of  enterprise  where  digital  technology  and  creative  ability  combine  to  deliver  hugely  successful  products  and  services  to  world  markets  Inspired  by  a  plethora  of  Californian  business  success  stories  and  with  the  rapid  provision  of  digital  infrastructure  and  talent  pools  around  the  world  a  network  of  creative  digital  IT- †facilitated  clusters  is  emerging  that  could  bring  significant  economic  growth  and  wealth  to  sector  participants   To  help  understand  this  phenomenon  this  paper  presents  models  of  cluster  development  identifies  cluster  stakeholders  describes  factors  that  influence  cluster  success  and  proposes  a  programme  of  research  to  guide  future  policy- †making  in  the  creative  digital  sector  Leadership  and  business  management  challenges  are  set  out  that  digital  sector  policy- †makers  government  agencies  local  authorities  education  providers  entrepreneurs  business  owners  and  large  corporates  need  to  address  with  coherent  strategies  in  order  to  capitalise  on  potential  business  development  opportunities  fermented  by  cluster  formations  Key  words  cluster  convergent  creative  digital  IT  ICT  information  technology  start- †up  SME  district  transformation  innovation  digital  economy  media  co- †working      Introduction  Based  on  findings  from  the  Tech  City  UK  Cluster  Alliance  Baroness  Joanna  Shields1  stated  that  â€oedigital  companies  spring  from  collaborative  communities  of  entrepreneurs  supported  by  established  businesses  universities  and  government  all  working  towards  common  goals† Tech  Nation  Report  2015   In  the  same  report  CEO  at  Tech  City  UK  Gerard  Grech  adds  that  such  businesses  increasingly  decide  to  locate  in  close  proximity  to  each  other  thus  creating  dynamic  digital  technology  clusters  throughout  the  UK   Our  paper  builds  upon  this  and  other  research  in  exploring  the  phenomenon  of  digital  clusters  in  an  attempt  to  identify  the  salient  influences  and  factors  that  may  determine  their  success  and  performance  We  focus  primarily  on  what  we  term  as  †creative  digital  clusters  facilitated  by  IT  infrastructure† where  there  is  a  high  degree  of  original  product  and  service  design  capability   Broadly  this  is  in  line  with  the  type  of  cluster  that  Shields† Alliance  and  others  have  investigated  with  attention  to  the  ecosystems  of  small  enterprise  creation  and  development  Specific  aims  of  this  paper  are  to   •Describe  key  features  and  characteristics  of  creative  digital  clusters  •Identify  cluster  and  stakeholder  interests  and  influence  •Determine  factors  that  stimulate  enterprise  start- †up  growth  and  success  •Evaluate  the  need  for  short- †term  and  longitudinal  digital  cluster  research  •Propose  the  leadership  and  management  challenges   that  lie  ahead  for  successful  cluster  growth  and  development   In  attempting  to  describe  and  make  sense  of  the  cluster  phenomenon  we  take  a  largely  pragmatist  exploratory  approach  to  our  research  drawing  on  existing  published  and  non- †published  sources  to  help  establish  a  general  overview  of  the  cluster  experience  Four  case  examples  are  used  to  facilitate  descriptions  and  explanations  and  secondary  data  from  existing  studies  enable  us  to  probe  the  research  gaps  that  we  suspect  exist  In  order  to  limit  the  scope  of  this  current  paper  we  concentrate  on  UK  creative  digital  clusters  but  this  should  not  be  interpreted  as  an  exclusive  domain  † these  clusters  are  just  part  of  the  wider  global  competitive  landscape  As  the  Economist2  indicates  the  label  †tech† covers  a  wide  spectrum  from  semiconductor  design  to  smartphone  apps  with  an  observation  that  †young  software  firms  are  geekier  and  more  likely  to  be  found  in  a  Cambridge  research  lab  than  in  Shoreditch†s  trendy  tech  quarter† Both  these  polar  extremes  come  under  the  †tech† umbrella  and  whilst  university- †based  centres  can  be  legitimately  embraced  within  the  cluster  research  field  this  paper  limits  investigation  of  academic  institutions  exploring  the  private- †led  business  sector  in  greater  detail     Various  speculative  estimates  of  how  valuable  this  sector  is  in  economic  terms  have  been  offered3  and  whether  we  take  the  highest  or  lowest  calculations  the  significant  contribution  that  this  hybrid  sector  delivers  to  an  economy  as  a  whole  can  be  recognised                                                               1  Chair  of  Tech  City  UK  2  Economist  21st  Sept  2013  p  30  3  See  for  example  https//www. gov. uk/government/news/creative- †industries   14  Jan  2014  Thus  this  is  a  highly  appropriate  moment  to  be  reporting  on  our  investigations  particularly  concerning  the  potential  roles  that  universities  business  schools  government  and  investors  can  assume  in  supporting  cluster  performance     Research  Motivation  and  Vision  This  paper  follows  up  previous  work  undertaken  by  the  authors  in  this  field4   Convergent  enterprises  † the  hallmark  of  cluster  members  where  businesses  integrate  various  disciplines  to  execute  their  vision  † are  most  often  found  in  urban  high- †density  groupings  which  bring  together  dynamic  start- †ups  fast  growing  SMES  and  various  types  of  incubators  and  other  informal  co- †working  spaces  from  cafes  to  maker- †spaces   We  want  to  understand  how  clustering  manifests  itself  in  cities  and  towns  across  the  UK  We  know  that  this  phenomenon  exists  in  many  places  around  the  world  too  and  we  will  be  addressing  this  in  a  subsequent  paper  In  particular  we  aim  to  explore  and  understand  the  complexities  at  the  heart  of  these  vibrant  communities  In  this  paper  however  we  will  develop  four  cluster  case  examples  Bournemouth  Bristol  Salford  and  Shoreditch  (inner  London  The  authors  have  been  observing  these  clusters  for  some  time  including  direct  involvement  and  interaction  with  cluster  stakeholders  and  enterprises  themselves  Hence  these  make  valid  subjects  to  draw  on    Clusters  hubs  and  collaborative  spaces  What  do  we  mean  by  creative  digital  clusters  Whether  large  or  small  formal  or  informal  we  are  referring  to  thriving  ecosystems  of  organisations  † commercial  not- †for- †profit  research- †led  or  a  combination  of  these Â- † in  close  physical  proximity  that  are  competing  and  collaborating  in  ways  that  are  innovative  creative  and  rewarding  Eze  Vidra  head  of  Google†s  London  Campus  co- †working  space  has  spoken  of  the  pivotal  role  of  London  with  the  potential  to  become  the  leading  start- †up  hub  in  Europe  based  on  its  access  to  talent  capital  and  crucially  the  density  of  activity  An  ever- †increasing  number  of  co- †working  spaces  contribute  to  this  increase  in  density5  But  the  cluster  phenomenon  is  not  new  Centre  for  Cities  and  Mckinsey  &  Company  (2014  identified  31  economically  significant  clusters  across  the  UK  in  a  range  of  sectors  but  recognised  that  whilst  an  agreed  definition  is  not  available  evidence  of  impact  is  identifiable  dating  as  far  back  as  1890  Furthermore  they  state  clusters  generate  a  disproportionately  large  economic  impact  for  their  footprint  based  on  the  knowledge  sharing  amongst  workers    Smart  spaces  and  cool  co- †working  Underpinning  the  dynamics  of  clusters  are  novel  and  evolving  trends  in  environments  for  working  that  are  emerging  around  the  world  The  term  †smart  space† is  typically  used  to                                                               4  Brewer  S  and  Rees  D  †Bournemouth  Digital  Pier† an  ESRC- †funded  feasibility  study  examining  convergence  in  organisations  that  combine  high- †tech  competences  with  creative  approaches  and  digital  processes  5  http://www. standard. co. uk/news/techandgadgets/google- †chief- †london- †can- †be- †leading- †hub- †for- †europes- †tech- †startups- †9234955. html  refer  to  environments  that  have  been  designed  and  then  used  in  a  manner  that  enables  flexible  efficient  and  productive  usage  Whilst  this  can  be  manifested  in  streamlined  architecture  with  discrete  technological  facilities  it  can  as  easily  be  a  science  laboratory  or  design  studio  with  the  traditional  paraphernalia  associated  with  those  communities   Historical  Evolution  of  Creative  Clusters   †Clustering† is  a  term  that  can  be  applied  to  a  variety  of  human  animal  biological  and  scientific  states   Humans  have  clustered  to  derive  synergistic  benefits  relating  to  hunting  defence  exploration  leisure  and  transportation  for  example  Our  interest  here  is  in  why  and  how  individual  enterprises  in  the  creative  digital  sector  come  together  in  well- †defined  geographical  boundaries  Thus  the  search  is  for  explanations  that  reveal  mutual  benefits  to  cluster  members  and  their  broader  stakeholders    Whilst  creative  digital  clusters  do  not  have  specific  size  parameters  for  the  purposes  of  our  discussions  we  are  considering  groups  of  enterprises  producing  a  critical  mass  of  business  activity  that  have  significant  impact  on  the  local  economy  through  investment  employment  infrastructure  and  profitability  Cluster  members  will  often  trade  together  and  establish  partnerships  but  they  also  interact  informally  through  socialising  networking  cultural  activities  leisure  and  simply  chatting  over  coffee  There  may  be  common  heritages  amongst  entrepreneurs  and  employees  too  † education  interests  personality  and  their  journey  through  life  These  features  have  been  identified  by  many  observers6   Leicester  and  Sharpe  (2010  point  to  the  growing  fascination  of  creative  regions  and  their  characteristics  †helping  a  shift  away  from  traditional  industrial  innovation  policy  of  the  1970s  and  1980s Â- † picking  winners  investing  in  specialist  entrepreneurs  and  improving  training  † towards  the  creation  of  enabling  conditions  for  innovation  in  particular  places  and  spaces  hotspots  clusters  and  cities† They  suggest  this  is  all  about  fostering  creative  ecosystems  and  we  can  observe  similar  policy  changes  in  other  parts  of  the  globe  too      Cluster  Types  and  Models   Organic  Clusters   Creative  digital  clusters  often  emerge  in  an  organic  format  a  type  of  grassroots  initiation  and  evolution  London†s  †Tech  City† † roughly  defined  as  the  square  mile  south- †east  of  Old  Street  Roundabout  (†Silicon  Roundabout  † is  a  contemporary  example  of  this  type  of  bottom- †up  development  and  is  one  of  our  case  examples   As  a  work  study  analyst  in  the  early  1970s  undertaking  projects  in  London  Telecommunications  Region  one  of  this  paper†s  authors  tramped  up  and  down  the  streets  of  Bethnal  Green  Clerkenwell  Hoxton  and  Shoreditch  to  carry  out  his  work   He  recalls  describing  the  area  as  â€oea  jumble  of  filthy                                                               6  See  for  example  Rees  &  Brewer  (2013  rubbish- †strewn  streets  lined  with  bomb- †sites  and  dilapidated  buildings  and  populated  by  some  of  the  poorest  people  I†d  ever  seen†7     How  did  this  small  area  contained  within  the  EC1  V  postcode  transform  in  to  what  we  see  today  † 15,620  enterprises  commencing  in  a  12- †month  period  leading  up  to  March  20148  alone  and  the  cluster  now  employing  251,590  people9    Within  the  space  of  four  decades  a  series  of  transitions  occurred  that  saw  business  and  residential  properties  vacated  by  people  in  search  of  more  attractive  places  to  live  and  work  and  re- †occupied  by  new  tenants  Property  values  and  rents  plummeted  and  empty  spaces  were  occupied  in  the  1980s  by  the  poor  struggling  †performance  creatives† † actors  musicians  artists  and  a  whole  host  of  low  wage  or  unemployed  individuals  who  craved  a  place  to  †hang  out† with  people  holding  complementary  lifestyles  ambitions  and  tastes  Some  of  these  went  on  to  fame  and  wealth  eventually  moving  on  to  pastures  new  but  leaving  behind  an  aspirant  community  that  had  an  ability  to  attract  a  new  wave  of  creative  talent  By  the  late  90s  with  the  propulsion  of  digital  technology  and  the  dot- †com  boom  the  fledgling  creative  digital  entrepreneurs  started  to  appear   Into  the  new  millennium  †Tech  City† has  now  emerged  into  Europe†s  biggest  creative  digital  cluster  and  is  expanding  into  neighbouring  areas  as  growth  continues     This  type  of  cluster  development  is  captured  in  Figure  One  below  and  for  more  detail  of  Tech  City†s  evolution  see  Appendix  †A†                                                                 7  Rees  D  Personal  recollections  as  an  employee  of  UK  Post  Office  Telecoms  8  http://techcitynews. com/2014/06/10/silicon- †roundabout- †tops- †uk- †startup- †chart- †with- †over- †15000- †new- †businesses / 9  Tech  Nation  Report  2015  Figure  One   Organic  Cluster  Development  Model  Inorganic  Clusters  In  contrast  to  the  example  of  Tech  City  we  can  observe  a  different  type  of  cluster  development  one  which  is  the  result  of  strategic  leadership  from  private  sector  investment  central  government  initiative  local  authority  economic  stimulation  or  other  types  of  direct  intervention  Here  the  protagonist  can  see  how  the  development  of  a  digital  local  economy  could  respond  to  addressing  a  problem  meeting  a  challenge  or  exploiting  an  opportunity  We  could  see  for  example  how  a  local  university  may  wish  to  provide  enterprise  opportunities  for  graduates  emerging  from  a  degree  course  that  has  nurtured  creative  talent  suitable  for  the  digital  sector  Or  perhaps  there  are  willing  investors  who  decide  that  a  certain  geographical  location  has  commercial  advantages  such  as  transport  infrastructure  which  could  underpin  technology  business  success  Alternatively  a  metropolitan  council  may  view  the  development  of  a  creative  digital  industry  as  the  basis  for  urban  re- †generation  In  all  these  situations  the  cluster  is  being  formed  and  driven  by  an  external  change  agent  rather  than  the  entrepreneurs  themselves  and  often  anchored  by  one  or  a  small  number  of  key  stakeholders   A  good  example  to  consider  is  the  recent  re- †generation  project  in  Salford  Greater  Manchester  Abandoned  docks  and  industrial  sites  had  decayed  into  tracts  of  wasteland  breeding  poor  living  conditions  crime  and  social  problems  At  the  same  time  central  government  was  keen  to  re- †distribute  employment  opportunities  and  cut  operating  costs  through  relocating  public  services  outside  London  The  BBC  was  such  a  public  organisation  affected  by  this  policy  and  became  attracted  to  the  re- †generation  plan  being  offered  by  Salford  See  Appendix  †A† for  the  story- †line  of  this  cluster†s  history  and  the  modelling  of  inorganic  clusters  can  be  seen  in  Figure  Two  below    Figure  Two  Inorganic  Cluster  Development   Hybrid  Clusters  Our  third  type  of  cluster  formation  brings  the  natural  street- †level  mutation  of  creative  business  interests  together  with  strategic  initiatives  or  support  In  most  of  the  cases  we  have  observed10  an  informal  congregation  of  creative  digital  enterprises  within  a  defined  location  has  evolved  to  a  point  where  growth  is  no  longer  possible  † or  is  difficult  † without  some  kind  of  strategic  initiative   Often  the  external  input  comes  in  the  form  of  infrastructure  development  † co- †working  spaces  transport  improvements  broadband  capacity  etc  The  Soho  area  of  London  is  a  long- †established  cluster  that  grew  out  of  a  small  number  of  businesses  relating  to  the  film- †industry  established  early  on  in  the  development  of  the  sector  Soho  mirrors  this  hybrid  model  in  that  an  organic  cluster  has  been  supported  but  not  led  by  a  series  of  initiatives  both  technical  and  policy- †based  (Durmaz  2010  The  concept  of  this  type  of  cluster  development  can  be  seen  in  Figure  Three  below                                                               10  See  for  example  †Wired  Sussex† (Brighton  †Canary  Wharf†(London  and  schemes  in  Barcelona  Montreal  and  Melbourne   Figure  Three   Hybrid  Cluster  Development  Bristol†s  †Watershed† ecosystem  reflects  this  mix  of  grass  root  and  external  involvement  where  the  focus  has  been  to  support  a  creative  arts  industry  with  a  policy  to  link  arts  and  cultural  organisations  with  the  creative  economy  and  ecosystems  and  is  our  third  case  history  at  Appendix  †A†   University- †Based  Technology  Enterprise  Centres/Parks/Incubators  Centres  of  academic  excellence  † usually  universities  and  other  higher  education  establishments  † have  come  to  understand  how  their  intellectual  property  can  yield  value  through  market  channels  This  could  be  from  public/private  partnerships  setting  up  commercial  organisations  non- †profit  mechanisms  and  support  to  aspiring  entrepreneurs   It  is  the  last  of  these  that  brings  us  to  include  such  enterprise  centres  or  parks  in  our  discussions  of  creative  clusters   Often  the  educational  body  acts  as  a  hub  for  driving  businesses  through  a  knowledge- †sharing  partnership  or  more  occasionally  joint- †ventures  and  strategic  alliances   We  have  observed  at  University  of  Bournemouth  and  the  Arts  University  of  Bournemouth  for  example  the  emergence  of  a  film  industry  production  cluster  where  there  is  more  or  less  a  direct  line  of  graduate  talent  creating  their  own  businesses  under  the  mentorship  or  guidance  of  their  former  university  professors  Agreements  are  reached  on  how  the  IP  is  to  be  valued  and  realised  the  creative  digital  enterprise  gets  off  the  ground  and  the  business  owners  retain  a  special  (but  not  necessarily  exclusive  link  with  the  university   Within  this  clustering  the  university  and  business  enterprise  may  be  supplemented  by  an  incubation  partner  typically  separate  from  the  main  university  campus  and  on  the  outskirts  of  the  university  town  or  city  Both  of  the  authors† affiliated  institutions  Universities  of  Southampton  and  Reading  have  successful  examples  of  these  types  of  centres/parks11  Increasingly  such  partnerships  are  offered  by  large  digital  technology  corporates  and  the  authors  have  witnessed  first- †hand  accounts  presentations  and  discussions  with  companies  who  recognise  the  value  of  raw  creative  talent  which  is  in  need  of  incubation  and  acceleration  to  progress  as  a  mature  enterprise  This  can  become  a  two- †way  street  where  a  corporate  academy  or  internal  R&d  centre  can  support  a  new  creative  digital  enterprise  incubate  and  accelerate  its  growth  and  then  monetise  financial  or  resource  investment   Mike  Lynch  (founder  of  the  company  Autonomy  says  â€oewhat  you  will  find  in  Cambridge  is  something  which  is  fundamentally  clever   In  Tech  City  the  raw  science  isn†t  fundamentally  clever  † it†s  more  attuned  to  the  market  and  consumer  The  government  has  realised  that  the  economy  could  be  benefit  from  connecting  the  two  booming  clusters  (Something  as  basic  as  better  rail  connections  would  help! †  (Economist  21st  Sept  2013  p30  Figure  Four  below  models  this  type  of  cluster   Multiple  Clusters  Many  clusters  develop  a  strong  identity  with  a  specific  industry  † educational  technology  in  Birmingham  Marketing  and  Advertising  in  Bournemouth  and  Games  Development  in  Liverpool  for  example12  This  is  often  the  result  of  a  historical  industry  legacy  † aviation  in  Derby  film  in  Soho  and  creative  arts  in  Bristol. 13                                                               11  United  Kingdom  Science  Park  Association  http://www. ukspa. org. uk  12  Classifications  from  Tech  Nation  Report  2015  13  For  more  examples  see  Centre  for  Cities  Mckinsey  and  Company  2014    We  now  observe  an  agglomeration  of  complementary  specialist  sector  capabilities  developing  in  a  number  of  clusters   Taking  Bournemouth  as  an  example  there  are  †hot  spots† around  the  conurbation  that  have  a  particular  flair  for  UI  and  UX  design14  for  special  effects  for  media  production  and  for  visual/audio  design  Mini  clusters  form  but  each  one  is  intrinsically  linked  to  each  other  for  the  purposes  of  collaboration  sharing  resources  exchanging  ideas  and  buying  in  services  The  historical  link  to  the  advertising  and  marketing  industry  from  all  these  specialist  centres  can  be  clearly  seen   Successful  clusters  such  as  Bournemouth  (see  Appendix  †A† and  Soho  are  taking  advantage  of  linking  these  hotspots  to  produce  a  powerful  cocktail  of  related  integrated  expertise  that  further  marks  out  a  cluster†s  profile  and  reputation  Durmaz  (2012) 15  identified  this  type  of  cluster  development  in  his  study  of  the  film  industry  in  London  and  Turkey  terming  these  as  †creative  hotspots† Figure  Five  below  illustrates  the  concept  of  these  linked  specialist  mini  clusters    Figure  Five  Multiple  Clusters   Pru  Ashby  Director  at  Tech  City  Investments  articulated  the  competitive  advantage  that  London  enjoys  as  a  leading  global  creative  cluster  comprised  of  these  †hotspots†  In  comparing  UK  with  the  USA16  she  emphasised  the  proximity  of  several  specialist  clusters  in  and  around  London  † fashion  film  design  music  creative  arts  finance  advertising  † enabling  easy  face- †to- †face  contact  between  clients  and  firms   This  is  in  contrast  to  the  US                                                               14  UI   =  User  Interface     UX  = User  Experience  15  Durmaz  D  Creative  Clusters  and  Place- †Making   Analysing  the  Quality  of  Place  in  Soho  and  Beyoglu   Phd  Thesis  Nottingham  July  2012  16  9th  May  2013  presentation  to  a  group  of  MSC  students  from  University  of  Zagreb  facilitated  by  David  Rees, Henley  Business  School, and  CISCO  at  Google  Campus  London  where  centres  of  excellence  are  spread  out  across  thousands  of  miles  and  differing  time  zones    Cluster  Start- †Up  and  Growth  Factors  From  their  previous  study  of  the  emerging  creative  digital  cluster  in  Bournemouth  Brewer  and  Rees  (2013  identified  a  number  of  potential  characteristics  and  factors  that  could  influence  the  development  of  creative  clusters  Their  work  drew  on  other  studies  including  Durmaz  B  Platt  S  and  Yigitcanlar  T  (2010  Munn  B  Baum  A   Boscherini  G  and  Perri  C  (2013  Bachmann  B   Dovey  J   Monaco  J   Sharpe  B.,Reddington, C   Alexander  V.,and  Penny  D  (2012  Clare  K  (2013  Docherty  D  (2010  and  Sapsed  J  and  Nightingale  P  (2013   These  can  be  summarised  as  §ï§Geographic  location   The  vast  majority  of  clusters  are  urban- †based  in  cities  or  large  towns  Physical  proximity  of  businesses  to  one  another  and  clients  plus  integrated  work/home/social  locations  are  important  factors   §ï§Place  This  refers  to  the  attractiveness  of  the  work  and  social  environment  in  which  the  enterprise  is  located  and  reflects  the  atmosphere  culture  and  sociability  of  the  ecosystem  §ï§Infrastructure  Transportation  facilities  (rail  motorways  airports  broadband  schools  leisure  and  culture  facilities  are  high  priorities  for  would- †be  entrepreneurs  §ï§Talent  Availability  of  (largely  graduate  cross- †disciplinary  competence  and  capability  for  both  entrepreneurs  and  the  talent  they  need  to  hire  University  locations  with  specialist  reputations  linked  to  clusters  are  especially  favoured  §ï§Investment  Finance  incentives  and  speed  of  response  are  strong  attractors  §ï§Business  Climate  Optimism  excitement  peer  group  membership  association  with  success  public  and  industry  profile  recognition  † all  factors  influencing  where  entrepreneurs  and  employees  want  to  be  located  §ï§Business  complementarity  Enterprise  owners  value  the  physical  closeness  and  availability  of  services  from  other  companies   Stakeholder  Interests  and  Influence  With  recognition  of  the  potential  economic  value  that  creative  digital  clusters  can  bring  to  local  regional  and  national  economies  there  is  a  discernible  interest  by  various  stakeholders  to  engineer  the  development  of  viable  and  sustainable  enterprise  ecosystems  We  identify  these  stakeholders  who  may  hold  an  interest  and  influence  in  the  development  of  a  successful  sustainable  creative  digital  cluster  •Policy  makers  † national  government  industry  leaders  EU  WTO  •Local  authorities  † implementing  national  policy  developing  local  policy  infrastructure  and  utility  provision  work/living  and  socially  integrative  environments  •Government  agencies  † regional  regulators  industry  coordinators  cross- †sector  collaboration  •Sector  bodies  † trade  and  industry  reps  grant/funding  organisations  cross- †sector  coordination  •Think- †tanks/consultancies/research  organisations  † gaining  insights  and  understanding  •Large  corporates  † incubation  internal  design  and  R&d  departments  HR  functions/developing  HR  strategies  managing  creative  talent  developing  collaborative  organisational  cultures  leading  business  transformation  cross- †sector  partnering  physical  environment  and  positioning  (location  •Entrepreneurs/owner- †managers  † initiating  growing  and  managing  the  enterprise  •Investors  † commercial  private  local  authorities  foreign  investment  •Financial  service  providers  † banks  providers  of  credit  insurers  •Talent  developers/universities  † inter- †disciplinary  talent  demand  for  integrated/convergent  entrepreneurial  graduates  and  skilled  employees  •Networking/partnering  organisations  † networking  competencies  partnership  broking   •Suppliers/enterprise  partners  † aligning  to  client/partner  needs  (capacity  resources  culture  systems  •Media  organisations  † investigating  and  reporting  on  sector  developments  •Architects/urban  and  rural  planners Â- † creative  workplace  and  business  environment  design  •Industry- †specific  partnerships  † identifying  partners  implementing  partnerships   Themes  Issues  and  Challenges  Our  investigations  suggest  that  the  UK  and  other  governments  recognise  the  potential  economic  and  societal  benefits  that  a  successful  digital  industry  can  bring  and  that  national  policies  to  support  this  sector  are  emerging   A  major  challenge  now  is  cultivate  a  positive  attitude  amongst  local  authorities  local  enterprise  partnerships  and  private  sector  investors  towards  the  development  of  viable  successful  and  dynamic  businesses   Strategic  interventions  by  public  authorities  to  stimulate  enterprise  growth  are  increasing  through  a  variety  of  mechanisms   A  particular  strategy  that  we  have  observed  is  to  replace  deteriorating  performance  in  traditional  industry  sectors  with  investments  to  promote  and  support  the  creative  tech  sector  Regeneration  projects  that  may  include  transforming  old  work  sites  and  buildings  in  to  new  enterprise  space  are  gaining  pace  Infrastructure  development  and  urban  design  initiatives  are  crucial  to  facilitate  digital  sector  growth  and  sustainability   Enterprise  structures  and  cultures  within  the  digital  sector  are  changing  dramatically   Contrary  to  a  line  of  popular  argument  that  people  will  elect  to  work  more  from  home  our  research  is  revealing  something  quite  different  Studies  we  have  referred  to  in  this  paper  indicate  a  strong  desire  among  the  new  creative  entrepreneurs  to  engage  socially  with  their  peers  in  both  virtual  and  face- †to- †face  environments  Employees  look  forward  to  interacting  with  colleagues  customers  and  partners  in  the  physical  work- †place  Business  owners  have  to  be  careful  to  ensure  that  the  free  creative  spirit  of  their  workers  is  not  lost  or  diluted  as  the  organisation  grows  † this  is  an  immense  leadership  challenge  And  there  are  similar  challenges  for  the  big  corporates  They  have  to  learn  how  to  interface  and  work  effectively  with  their  creative  suppliers  and  partners  Many  corporates  especially  those  outside  the  tech  sector  have  little  idea  how  the  creative  digital  sector  operates   They  need  to  understand  how  to  partner  effectively  as  a  customer  taking  advantage  of  the  opportunity  to  learn  from  their  fast- †moving  and  dynamic  suppliers/partners  The  organisational  learning  they  may  take  from  working  with  a  phone  app  development  company  could  be  transferred  and  shared  elsewhere  in  their  business  gaining  them  a  competitive  edge  over  rivals   For  educational  bodies  particularly  business  schools  and  universities  there  is  a  need  to  develop  the  graduate  entrepreneurial  talent  required  for  the  tech  market  place  Often  the  fledgling  enterprise  will  require  cross  disciplinary  talent  and  universities  may  consider  how  they  best  respond  to  this  need  Business  schools  can  certainly  offer  a  great  deal  in  providing  executive  education  programmes  to  the  stakeholders  identified  above  and  to  support  nascent  entrepreneurs  with  skills  and  development  courses   Investors  are  becoming  aware  of  the  value  of  this  sector  on  a  long- †term  basis  Investment  decisions  need  to  be  based  on  a  full  understanding  of  the  culture  of  the  sector  what  may  account  for  enterprise  success  and  failure  and  how  enterprises  look  for  guidance  from  experienced  investors   Conclusions  Our  paper  aimed  to  raise  awareness  of  the  role  that  clusters  have  in  exploiting  the  creative  digital  IT- †facilitated  sector  and  we  conclude  that  engineering  such  business  ecosystems  is  likely  to  encourage  faster  levels  of  growth  and  higher  rates  of  business  performance  than  leaving  cluster  development  to  grassroots  and  market  influences  However  ecosystems  engineering  is  tricky  it  is  crucial  to  strike  a  balance  between  †wisdom† and  †innovation† when  leading  influencing  or  intervening   There  is  nothing  worse  than  creating  the  †distressed  furniture  look† † creative  digital  clusters  have  to  be  authentic  and  interventions  should  avoid  disturbing  the  natural  habitats  and  cultures  of  urban  environments  There  is  still  a  lot  to  be  learned  about  the  intricate  nature  of  creative  clusters  † how  different  attraction  factors  rank  and  can  be  valued  how  the  interaction  of  cluster  participants  can  be  better  facilitated  how  the  case  for  public  and  private  investment  can  be  more  persuasive  how  talent  flows  in  to  the  industry  can  be  broadened  and  managed  how  we  can  measure  and  track  performance  of  both  individual  enterprise  and  the  whole  cluster  itself  This  will  require  a  major  programme  of  research  that  is  best  conducted  through  a  partnership  of  academic  practitioner  consulting  private- †sector  and  governmental  participants   Whatever  stakeholder  position  the  reader  adopts  the  development  of  successful  creative  digital  clusters  represents  a  major  strategic  leadership  challenge  to  ensure  that  the  opportunities  for  high- †value  employment  green  economic  growth  and  impressive  returns  in  investment  are  not  lost  The  authors  are  keen  to  discuss  with  readers  how  the  research  agenda  can  be  progressed    Recommendations  Depending  which  side  of  the  †disruptive  innovation† fence  you  may  be  sitting  on  the  leadership  challenges  could  be  perceived  as  either  threats  or  opportunities  The  authors  are  quite  clear  where  they  stand  † this  is  an  opportunity  for  all  stakeholders  to  take  advantage  of  the  benefits  that  these  clusters  bring   To  help  leaders  develop  successful  businesses  and  successful  clusters  an  exemplar  framework  that  can  model  cluster  characteristics  behaviours  and  performance  has  to  be  proposed  This  would  be  the  first  stage  in  an  on- †going  programme  of  creative  digital  cluster  research  The  measurement  of  cluster  success  is  not  yet  properly  defined   Plenty  of  published  data  describes  size  growth  rates  specialisms  successful  cluster  companies  and  many  other  features  but  this  doesn†t  necessarily  equate  with  defining  cluster  performance     Second  we  strongly  emphasise  the  need  for  research  that  can  uncover  the  secrets  of  individual  enterprise  success  † why  do  some  cluster  members  succeed  (and  at  times  succeed  handsomely  and  others  fail  (sometimes  heroically  Whilst  there  have  been  reasoned  propositions  relating  to  performance  cause  and  effect  we  have  not  yet  found  an  empirically- †based  study  using  valid  research  tools  and  techniques  that  could  claim  a  reliable  confirmation  of  input/output  factor  correlation  It  is  possible  that  such  correlations  cannot  be  precisely  determined  but  this  needs  to  be  tested  Importantly  such  research  needs  to  analyse  the  direct  and  indirect  effects  that  cluster  membership  † whether  formally  recognized  or  not  † have  on  enterprise  performance  An  expected  outcome  would  be  to  propose  approaches  to  enterprise  design  † its  architecture  culture  and  leadership   Third  it  is  imperative  that  we  establish  why  clusters  grow  at  the  speed  we  have  observed  how  sustainable  they  are  in  to  the  future  and  what  impact  they  have  on  local  and  national  economies  Various  credible  sources  have  offered  data  and  insights  † as  we  have  referred  to  in  this  paper  † but  we  confidently  speculate  there  remains  unconfirmed  relationships  between  aspects  of  cluster  operation  and  economic  outcomes   Fourth  a  programme  of  training  development  and  business  support  has  to  be  in  place  to  capitalize  on  the  opportunities  of  clusters  and  their  membership  Business  schools  are  ideally  placed  to  deliver  these  services  that  could  include  workshops  simulations  think- †tanks  experiential  learning  discussion  forums  presentations  research  and  networks     Appendix  A   Vignettes  of  thriving  hubs  Shoreditch  Bristol  Mediacity  UK  and  Bournemouth  Whilst  much  change  and  many  new  technologies  businesses  and  products  will  come  from  established  global  and  multi- †national  companies  there  will  nevertheless  be  considerable  innovation  and  social  dynamism  coming  from  the  clusters  and  hubs  of  creative- †driven  teams  and  individuals  in  the  hearts  of  cities  The  reason  for  this  is  that  such  communities  are  far  better  tuned  into  the  needs  and  desires  of  the  Millennial  Generation  who  will  be  the  consumers  and  shapers  of  these  new  markets  With  the  velocity  of  change  increasing  and  swerving  to  the  eddying  currents  of  a  turbulent  planet  large  companies  will  frequently  collaborate  with  these  urban  superstars  to  tap  into  these  new  markets  as  they  grow  and  evolve   Shoreditch  Whilst  Shoreditch  itself  is  synonymous  with  Tech  City  that  term  now  covers  a  broader  fluid  area  and  indeed  is  also  used  to  categorise  other  similar  urban  clusters  elsewhere  Whilst  what  was  a  derelict  business  district  is  now  highly  desirable  Shoreditch  has  an  interesting  if  unglamorous  history  Despite  a  thriving  Huguenot  silk  weaving  industry  in  the  17th  Century  and  a  lively Â- † if  dissolute Â- † theatre  industry  before  that  in  the  Tudor  era  the  area  remained  largely  unknown  until  the  Young  British  Artists  (YBA  movement  with  Tracy  Emin  at  the  vanguard  moved  in  during  the  economic  downturn  of  the  early  1990s  Once  colonised  the  advent  of  many  small  creative  businesses  and  venues  was  only  a  step  away  Inspired  perhaps  as  much  by  the  astronomical  sums  of  money  that  some  YBAS  were  enjoying  for  their  creative  activities  the  newcomers  to  what  was  at  the  time  an  affordable  entry  point  to  central  London  began  to  establish  small  companies  that  were  both  creative  and  tech- †based  These  ranged  from  web- †site  and  similar  digital  agencies  to  more  technologically  advanced  start- †ups  from  entrepreneurs  who  might  otherwise  have  headed  a  few  blocks  south  to  take  up  the  much  higher  remuneration  on  offer  in  the  financial  institutions  of  the  City  So  what  does  Shoreditch  look  like  today  in  early  2015  A  cursory  stroll  along  Shoreditch  High  Street  or  any  of  the  bustling  side  streets  reveals  the  striking  dynamism  of  a  city  in  a  state  of  permanent  transition  and  growth  Cranes  and  skips  indicate  the  new  builds  and  conversions  cafes  and  shops  are  ambiguous  in  purpose  with  steaming  coffee  machines  rows  of  clothes  and  people  at  laptops  going  about  their  business  Go  back  a  week  later  and  something  will  have  changed  in  any  vista  that  you  recall  from  your  previous  visit   Indoors  the  picture  is  just  as  frenetic  as  on  the  pavements  outside  Whilst  a  few  studios  and  offices  are  visible  through  street- †level  windows  most  of  the  activity  takes  place  on  different  floors  and  behind  closed  doors  Given  that  for  now  at  least  most  of  the  buildings  are  re- †purposed  from  their  original  intent  the  outside  view  is  typically  less  than  inspiring  Inside  the  picture  is  very  different  with  ad  hoc  arrangements  vintage  furniture  and  sleek  modern  office  technology  crammed  every  which  way  into  cool  working  environments  Within  this  dynamic  ecosystem  companies  come  and  go  with  alarming  speed   Some  persist  and  evolve  typically  with  business  visions  predicated  on  social  cohesion  as  much  as  financial  multipliers    Bristol  With  a  long  history  of  creative  technology  partnerships  the  Bristol  City  region  is  now  putting  a  commercial  framework  around  future  developments  with  the  launch  of   †Bristol  is  Open† a  collaboration  between  the  technology  media  and  telecommunications  industry  formalised  by  a  limited  company  which  is  supported  by  the  University  of  Bristol  and  Bristol  City  Council  But  this  initiative  builds  on  a  forty- †year  history  of  innovation  and  creativity  in  the  IT  age  although  long  before  that  the  city  was  at  the  heart  of  the  country†s  maritime  industry  The  current  thriving  convergent  interdisciplinary  cluster  has  its  origins  in  a  number  of  significant  factors  The  BBC  Natural  History  Unit  was  formed  in  1957  and  to  this  day  produces  award- †winning  programs  filmed  around  the  world   The  City†s  two  universities  provide  a  pipeline  of  talented  graduates  from  engineering  to  film  special  effects  and  drama  The  city  is  packed  with  a  vibrant  collection  of  arts  centres  and  creative  companies  Watershed  established  back  in  1982  and  claiming  to  be  Britain†s  first  creative  media  centre  now  houses  a  thriving  arts  cinema  conference  and  events  space  as  well  incubation  space  for  start- †ups  and  also  the  stimulating  Pervasive  Media  Studio  Award  winning  film- †maker  Aardman  Animations  also  provide  office  space  Engine  Shed  was  established  in  2013  in  the  heart  of  the  Enterprise  Zone  for  start- †ups  and  others  requiring  access  to  business  facilities  such  as  boardrooms  and  workshop  and  other  types  of  event  spaces  Engine  Shed  is  supported  by  Bristol  City  Council  the  University  of  Bristol  and  the  West  of  England  Local  Enterprise  Partnership  and  also  acts  as  a  home  for  Bristol†s  component  of  the  regional  SETSQUARED  Partnership   Mediacity  UK  Greater  Manchester  Mediacity  UK  refers  to  a  unique  public- †private  initiative  to  create  a  new  media  district  that  would  act  as  a  digital  hub  for  a  shared  creative  community  to  rival  similar  initiatives  in  Dubai  and  Singapore  Whilst  the  support  of  local  councils  and  redevelopment  agencies  together  with  the  leadership  of  site  owner  and  developer  Peel  Group  was  important  it  was  the  confirmation  on  June  2006  that  the  BBC  would  relocate  a  number  of  their  key  departments  there  that  sealed  the  success  of  the  initiative  Walking  across  the  landscaped  piazza  amongst  the  remodeled  waterways  modern  tramlines  and  imposing  tower  blocks  presents  a  very  different  experience  to  other  creative- †digital  clusters  in  the  UK  Nevertheless  there  are  many  recognizable  sights  such  as  the  BBC  logos  and  the  iconic  studio  signs  for  â€oethe  Voice† For  those  able  to  gain  access  to  the  interiors  of  the  buildings  the  well- †planned  complementary  nature  of  occupancy  strikes  a  healthy  chord  The  substantial  BBC  teams  and  resources  are  augmented  by  a  tower  block- †based  post- †production  facility  called  The  Landing  Editors  lab  services  games  testing  services  and  digital- †workflow  facilities  are  all  connected  across  the  top  five  floors  and  connected  vertically  by  high- †speed  links  In  addition  to  the  major  broadcasters  and  their  supporting  businesses  there  is  the  newly  housed  Salford  University  building  with  superb  facilities  to  support  the  talent  pipeline  that  falls  at  the  feet  of  prospective  employers  With  regular  transport  links  to  central  Manchester  the  new  media  community  that  straddles  the  City  of  Salford  and  the  Borough  of  Trafford  will  continue  to  play  a  key  role  in  the  UK  and  beyond   Bournemouth  Although  a  new  town  founded  in  1810  Bournemouth  has  recently  been  identified  as  having  the  fastest- †growing  digital  cluster  in  the  UK  This  success  is  indicative  of  a  trend  in  the  conurbation  that  has  been  growing  steadily  for  a  couple  of  decades  With  two  universities  generating  a  pipeline  of  creative  and  technical  talent  and  a  desirable  coastal  urban  lifestyle  it  was  only  a  matter  of  time  before  the  town  became  a  desirable  business  location  The  trend  is  fuelled  by  two  complementary  demographics  new  graduates  choosing  to  stay  local  and  create  their  own  opportunities  and  mirroring  that  a  trend  for  older  professionals  to  relocate  or  return  to  the  town  for  family  or  other  reasons  The  sub- †sectors  emerging   strongly  are  digital  marketing  agencies  games  and  film  special  effects  with  others  buoyant  too  Top  UK  special  effects  company  Framestore  established  an  outpost  in  the  town  to  attract  graduates  In  addition  to  the  dominant  local  financial  industries  there  is  also  a  strong  history  of  light  engineering  and  electronics  in  the  area  which  resonates  in  the  newer  maker- †spaces  and  initiatives  such  as  the  Open  Device  Lab  reportedly  the  largest  collection  of  devices  available  for  testing  new  products    Primary  References  Economist  21st  Sept  2013  p  30  Tech  Nation  †Powering  the  Digital  Economy† www. TECHCITYUK. COM  https//www. gov. uk/government/news/creative- †industries   14  Jan  2014  Industrial  revolutions  capturing  the  growth  potential  2014  link  http://www. centreforcities. org/publication/industrial- †revolutions / by  Centre  for  Cities  and  Mckinsey  &  Company  2  July  2014  Brewer  S  and  Rees  D   †Bournemouth  Digital  Pier† ESRC  Report  Dec  2013  http://www. standard. co. uk/news/techandgadgets/google- †chief- †london- †can- †be- †leading- †hub- †for- †europes- †tech- †startups- †9234955. html  Leicester  G  and  Sharpe  B   †Producing  the  Future   Understanding  Watershed†s  Role  in  Ecosystems  of  Cultural  Innovation†  International  Futures  Forum   2010  Durmaz  B  Creative  Clusters  and  Place- †Making   Analysing  the  Quality  of  Place  in  Soho  and  Beyoglu   Phd  Thesis  Nottingham  July  2012  Durmaz  B  Platt  S  and  Yigitcanlar  T  (2010), †Creativity  culture  tourism  and  place- †making  Istanbul  and  London  film  industries† International  Journal  of  Culture  Tourism  and  Hospitality  Research  Vol  4  Issue  3  pp  198  † 213    Permanent  link  to  this  document  http://dx. doi. org/10.1108/17506181011067592  Munn  B  Baum  A  Boscherini  G  and  Perri  C  (2013  †The  Work  Shop† CBRE  AND  Henley  Business  School    Bachmann  G  Dovet  J  Monaco  J  Sharpe  B  Reddington  C  and  Alexander  V  (2012  †Cultural  Value  Networks  † Research  Findings†  Digital  Cultures  Research  Centre  University  of  the  West  of  England    URL    Clare  K  (2013  †The  Essential  Role  of  Place  Within  the  Creative  Industries  Boundaries  Networks  and  Play†  Cities  Journal   34  (2013  pp  52  † 57  Elsevier  Doherty  D  (2012  †The  Fuse  Igniting  High  Growth  for  Creative  Digital  and  Information  Technology  Industroes  in  the  UK€   CIHE  Report   URL  Sapsed  J  and  Nightingale  P  (2013  †The  Brighton  Fuse† Arts  and  Humanities  Research  Council  Report  URL  Â

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