In order to evaluate the cause of the gap between policy makers and practitioners, Taiwan’s policy decision model is being compared to other models. The political social interaction is very different from culture to culture. East Asian, despite of political
17 http://clustermapping.us/content/cluster-mapping-methodology
18 The Local Education cluster is presented at 0 from both 2006 and 2011 Census data.
19 http://clustermapping.us/content/cluster-mapping-methodology
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system, follows the authoritarian decision flows. Given that East Asian has only three democratic and fully free countries, Japan, Korea, and Taiwan. The policy decision models of these countries remain to be top-down model regardless the officials are being voted in the office. Europe being the democracy inception continent, exercise the bottom-up model, and the US have an interactive model. A comparison of the three models is presented below, Taiwan vs US v.s. European Cluster Models – Policy Driven Top-down Model versus Policy Driven Interactive Model versus Vision Driven Bottom-up Model.
“Cluster initiatives are organized efforts to increase the growth and competitiveness of clusters within a region, involving cluster firms, government and/or the research community.” (Solvell & Lindqvist, 2015)
Two types of macroeconomics models: top-down and bottom-up, have been
distinguished (Grauwe, 2010). Both models have their limitations. Policies made with top-down model may be unrealistic and out of touch for an open market, and the bottom-up model is more ad-hoc without covering the full scope. Information is important for making the “right kind” of decisions for businesses and their sustainability. Criticism for the bottom-up model is that lack of information for the full picture to make decisions that is not complete and not competitive. No one can predict external shocks despite many economists have tried to make the prediction. If it is predictable, it is not called “shocks”.
Most if not all Asian countries make their policies a top-down model with their economic planning despite of their democratic political systems. Taiwan has had state-planned economic development plan ever since the return from Japan. Back then, the economic planning in the 1970s was focused on technology development and expansions and ultimately made Taiwan a high-tech OEM island. Government continues to plan policies in the same format. Below is a simple flow chart of how Taiwan’s policy makers decide on their economic plans.
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Figure 14 Taiwan’s Policy-driven Top-down Cluster Decision Model.
It is a top-down decision model in which the government researchers collect information and propose to the reviewers based on the information collected from various resources, scholars, practitioners, and field researchers, to make the most fitted policies. The plans are reviewed by the government agencies with recommended experts (Yu et al., 2011).
Once the policy is made with appropriated funding, the policy will be promoted by the responsible agencies such as Administrations of government divisions. The
administration taken over the policy project finds outside institutes or association to implement the plan, and later measure with expected outcome. So the outcome is tailored to the goal of the policy. This top-down policy model used to work well while
information access is limited in the earlier eras; people depends on governments to supply outside information while the access to the world information was not easy.
Nowadays, information has been opened and with timely reports, making top-down policies appears to be moving too slow, and out of touch. People have the first
information faster than the government. Practitioners know their own businesses better
Taiwan’s Executive
Calls for proposal on executing decided plan to realize the goal.
Admin. supplies funding and waits for outcome to be reported.
Submission, The Executive Yuan makes public announcement and budgeted program to operate the proposal. There will be funding to run the program but is under the government control.
Submission, Administration review and consolidates solutions.
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then policy makers, who know the best channels to acquire the most updated information.
Many governments are facing the similar issue – too slow to respond, and information are too old (Yu et al., 2011).
Time is changed that technology has provided everyone with ease of access to all
information worldwide. Anyone can find almost anything over the web now. Information access has become an advantage to whom has the fastest access and meaningful ways for regular people to understand. Advanced countries, such as Sweden, Germany, have been building expert system online, such as Cluster EU Observatory, so cluster initiatives can be used by everyone. See a simplified process flow of the European model.
Figure 15 European Initiative Driven Bottom-up Cluster Decision Model.
“The European Cluster Observatory has now been in existence for more than five years.
Policymakers, practitioners, and researchers use it widely. By 2012 over 2,000 maps were produced every month and over 1,500 document downloaded every month from the Cluster Library. The Observatory is widely quoted in media, in policy papers and in scholarly work.” - (Ketels, Lindqvist, & Sölvell, 2012, p. iii) The European model is a
EU Commission provides vision and
grant for cluster initiatives.
•EU Cluster Observatory provides cluster tools for everyone.
EU Commission calls proposals and provides funding for
qualified proposals.
•Granted parties form Cluster organizations to implement the Cluster initiatives.
EU Commission manages grant process and reports
outcomes.
•Researchers evaluate and measure development outcomes.
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pure bottom-up model that by people’s request, policy makers respond to the initiative proposal.
After the 2008 financial crisis, the US, facing the big employment challenges found that their policies are out of place and not able to react to the external shocks or quickly recovery from a shock. The Brooking’s policy research team recommended for the US to initiate policies on strengthening the regional competitiveness throughout the US by working directly with the publics to provide in time information assessment tools for everyone’s use. (Mills, Reynolds, & Reamer, 2008) The goal was to make policy makers to work with practitioners to be productive and competitive, and to create jobs.
…the federal government should establish an industry clusters program that stimulates the collaborative interactions of firms and supporting organizations in regional economies to produce more commercial innovation and higher wage employment.
- (Mills et al., 2008).
Government sets policies on a periodical basis to review people’s needs. Technology upgrades has been pushing information updates faster than big organizations can react, especially the large body of bureaucrats. One simple decision may take layers of reviews and meetings to make. By the time policy is made, the issue has evolved to the next level.
On the other hand, the bottom-up, trail-and-error model, is often being criticized as to being too ad-hoc and without a supporting structure and validation. A mixed model may compensate for both disadvantages. The US has changed its new flow to cluster
initiatives for policy makers to provide the updated information tools for businesses and organizations use and to initiate local prosperity projects, and in the meantime the local governments proactively interact with citizens to request for proposals. The flow is as follows.
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Figure 16 US Cluster Initiative Cluster Initiative Decision Flow.
As a result, the US Cluster Mapping is designed by policy makers for people to quickly assess industrial information, understand their business environment, and make their initiatives realistically in time, so that they can create jobs and prosperity. The first and immediate updated information helps businesses to be competitive. This is a top-down policy initiative to make the bottom-up cluster initiatives more competitive globally.
This policy provides a free flow of information and created a channel for an interactive communication by utilizing the latest technology. So, I name it the interactive-decision-model. When information was not readily available, the best policy maker can do is to depend on experts in the field to study what is the best to offer and allocate resources and setup programs for people to follow. Now with the interactive expert system, people rely on the latest information update to make the most measurable decisions. The benefit of an interactive expert system is for people to make decisions and take calculated risks with the best educated estimations, so that they can be better control the risks. Having sufficient information to compete is the strategy.
US Commerce tools, and measures for outcomes.
Provides budget and funding.
Receive reports from the measured outcomes from EDA.
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To summarize, cluster initiatives are created to promote economic prosperity, and different governments implement their cluster initiatives differently. Taiwan has a top-down model, European has a bottom-up model. The US has an interactive-model. To compare the three models, below chart explains the differences.
Figure 17 Comparison on Taiwan-EU-US cluster initiative decision models.
Model Tools Policy Makers Practitioners and
researchers
Set goals, design and promote cluster initiatives
EU sets visions, promotes the vision, and calls for initiatives; EU officers to manage the interaction among stakeholders within the organizations
US Policy
Set goals and interact with local governments to call for initiatives, local governments interact directly with the publics
Submit Cluster initiatives to receive grants and assistance from local governments; final outcomes are reported back to the funding agencies
In Taiwan’s top-down level, the government has the least interaction directly with the publics; the demand and feedback are often not heard by the policy makers in time, and Technology innovation is one of the major goals. The outcome is not measured by job creation, but by how many companies going public and are engaged in mergers, market trading returns, which was documented in the White Paper (Industrial Development Bureau, 2015, pp. 191, 258-267) as measurement for the success.
The European model is set with a clear vision, and all initiatives are granted based on the submission proposals that matches the vision closely. The non-profit EU Cluster
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Observatory designs and provides as much as information conveniently for open assess, so that everyone can use the information to design their own initiatives to reach the big vision. Job creation is the ultimate outcome measurement.
The US policy driven interactive model provides interaction governments and publics.
The national government is providing the guidelines and needed assistance. Job creation is one of the measured guideline by the funding agencies. The outcomes are measured against the goal, and job creation is the major goal. This is an interactive government-public model.