Recently, under the pressure to change into a knowledge-based economy, development countries have become interested in a regional innovation system and an industrial cluster as mother of innovation.
While referring to five regions in North European countries whose economy has successfully changed to a knowledge-based economy and to the earlier studies, in this paper, necessary and sufficient conditions for upgrading existing clusters to one of high-technology and an effective functioning of regional innovation systems were examined.
In upgrading existing clusters, preparation of following necessary conditions is first required:
(1) Strong recognition of local industry, academia and government, the necessity to change into a knowledge economy in order to activate regional economy, and the need to act toward the same goal.
(2) Selection and concentration to clusters in which local resources can be harnessed.
(3) Enrichment of innovation infrastructure. Local universities should develop talented people and conduct a research required to upgrade clusters. And forums should be established where people from industrial sectors and academia, gather and discuss.
(4) Popularization of venture culture.
(5) Enrichment of incubation infrastructure.
Regional innovation systems, however, will not function effectively by simply arranging these necessary conditions. In order for a regional innovation system to function effectively, strategically, there needs to be a conscious competition between clusters; the differentiation of the content of clusters; the development of forum for a knowledge production (mode 2); and the formation of a regional brand.
From these strategies, outstanding firms and personnel will gather from abroad and clusters will become fertile, and as a result, innovation and incubation power will strengthen.
For this, it is necessary to define the governance of cluster and prepare the implementation unit. Grading and ranking functions are also useful for stimulation of competition between clusters and for promotion of effective functioning of regional innovation system.
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