Both government leaders and the market have important roles to play in regional clusters that breed innovation, economic development and growth, the Economist Intelligence Unit reports.

Among the experts interviewed for this research paper is Pedro Arboleda, a partner at Monitor Group. Arboleda relates the South Korean government’s successful efforts in the late 1990s to create an environment that encouraged small businesses to start in Seoul to boost economic growth after the Asian financial crisis led to the decline of several large conglomerates.  

The effort to boost new businesses focused on changing the culture as well as tax and banking rules. “The government made a point of inviting entrepreneurs to key events and policy meetings, seating them next to the president, to literally raise the profile of such individuals in society,” Arboleda told the publication.
The report, “Fostering innovation-led clusters: A review of leading global practices,” is part of a series on research and development in the Middle East, seeking to draw economic lessons from around the world to apply to that region.