The importance of technology clusters

Regional clusters are known to act as hothouses for generating new ideas, new applications, and the establishment of new companies to exploit these [UKR14]. Australia already has notable hotspots that have attracted talent and funding for fundamental research, higher level research training, field robotics, and specific technology development (e.g., mining automation technologies). For Australia to be internationally competitive in the areas of robotics where it excels, existing hotspots must continue to be used to grow local ecosystems of innovation, with ready access to mentoring, finance, business and marketing advice, as well as providing an opportunity to build connections across the value chain. Opportunities for new clusters must also be explored.

High-technology industries tend to be heavily concentrated in regional ‘clusters’ [VCA17]. According to AVCAL, regions with high-technology clusters tend to be more productive, attract a highly skilled workforce and are more likely to attract venture capital due to the reduced risk and increased profit to investors [VCA17]. The general success of clusters is attributed to a company’s nearness, both in terms of location and relationships to entrepreneurs, industry experts, financial and accounting specialists, marketers, and related businesses [OM05]. Clustering also creates a hothouse environment driving rapid growth of start-up companies.

A feature of the general high-tech cluster in Silicon Valley was its genesis from well-funded military research directed toward clear national security goals [OM05]. This initial focus led to the creation of large spin-offs for civilian industry, which in turn led to the creation of an entrepreneurial culture now synonymous with the region [OM05]. Universities and industry collaborations were supported by a range of government incentives, while the favourable climate and social cohesion of California are also considered to be factors [OM05]. With the emergence of key Defence sector investments in Australia, and the growth of the Defence budget to two percent of Australia’s GDP by 2020-21, it is an ideal time to look at the formation of clusters to support the development of an Australian robotics industry.

There is also a high-tech hub in Pittsburgh, USA within which a local robotics and automation cluster has flourished [PRA17]. Pittsburgh has established itself as a regional hub for small-medium sized enterprises (SMEs) with 84 businesses securing $US499 million in venture capital in 2014-15 alone. The success of the robotics and automation cluster in Pittsburgh has been analysed and found to be related to innovation and collaboration, the strong influence of a well-established robotics-focussed university (Carnegie Mellon University), investments in major technology, and collaboration with Fortune 500 companies [PRA17].

Technology clusters are not always successful and there is no guaranteed formula for success, although high-functioning networking opportunities and facilitation, a strong innovation base with supporting R&D facilities and a highly skilled and mobile local workforce are considered key [UKR14]. To this end, Australia’s IT infrastructure compares well with international peers, with wide wireless broadband coverage, although the Network Readiness Index [EY17] is falling, with Australia currently ranked 18th, largely due to the costs associated with fixed broadband. Despite these shortcomings, we recommend a cluster approach for Australia to support its robotics industry.