Christian H.M. Ketels

Principal Associate

Dr. Christian Ketels is a member of the Harvard Business School faculty at Professor Michael E. Porter’s Institute for Strategy and Competitiveness. He holds a PhD (Econ) from the London School of Economics and further degrees from the Kiel Institute for World Economics and Cologne University. He is President of TCI, a global network of professionals in the field of competitiveness, clusters, and innovation, Honorary Professor at the European Business School Oestrich-Winckel, and Senior Research Fellow at the Stockholm School of Economics. In 2009 he served as a Visiting Professor at the Lee Kuan Yew School of Public Policy, Singapore. Dr. Ketels has led cluster and competitiveness projects in many parts of the world, has written widely on economic policy issues, and is a frequent speaker on competitiveness and strategy in Europe, North America, and Asia.

Dr. Ketels is the chair of the academic advisory board of ORKESTRA The Basque Competitiveness Institute and currently serves on the advisory boards of The Baltic Development Forum, the Center for Strategy and Competitiveness at the Universidad de los Andes, the Center for Competitiveness at the University Fribourg, and is a special advisor to the Asia Competitiveness Institute. He is a member of the selection committee for the Spitzencluster-Initiative launched by the Federal Ministry of Education and Research (Germany), served on the European Commission's European Cluster Policy Group and  2011 RegioStars jury, and is currently part of its Mirror Group for the  S3 Smart Specialization Platform.

Journal Articles

  1. Recent Research on Competitiveness and Clusters: What Are the Implications for Regional Policy?

    Christian Ketels

    This paper reviews implications of recent research on competitiveness and clusters for regions and regional policy. A new framing of competitiveness clarifies the role of regions. Its empirical findings align well with the literature on drivers of regional performance, but there are opportunities for mutual learning. A step-change in the availability of data on clusters and cluster policies has enabled new research approaches. Clusters are shown to have a close association with regional economic performance and evolution. Cluster policies are largely focused on strengthening existing agglomerations, not creating new ones. The paper discusses several practical insights for regional policy makers.

    Keywords: Competition; Industry Clusters; Policy;

    Citation:

    Ketels, Christian. "Recent Research on Competitiveness and Clusters: What Are the Implications for Regional Policy? ." Cambridge Journal of Regions, Economy and Society 6, no. 2 (July 2013). View Details
  2. From Clusters to Cluster-Based Economic Development

    Christian H.M. Ketels and Olga Memedovic

    Over the last decades, changes in the global economy and the emergence of Global Value Chains (GVCs) have raised the interest in understanding the specific conditions and cross-company interactions within and across locations. For companies, the need to choose the right location for specific activities moved from an operational to a strategic issue. For countries, regions and cities, competition raised the stakes of understanding how to improve productivity and attract firms in specific fields beyond providing low factor costs and subsidies. Many countries, from natural-resource-rich, to transition economies, and to developed countries have launched competitiveness policies and cluster initiatives involving various stakeholders. The paper addresses how clusters can be leveraged for economic policy and what the role of different stakeholders in this process is. This paper summarises the cluster concept, focusing on the main theoretical framework and on recent empirical findings, and discusses key pillars of a cluster-based economic policy approach. The paper concludes with an application of the concept to resource-rich, oil-dependent economies.

    Keywords: Development Economics; Economy; Value; Business Strategy; Competition; Performance Productivity; Cost; Natural Environment; Policy; Business and Stakeholder Relations; Framework; Industry Clusters;

    Citation:

    Ketels, Christian H.M., and Olga Memedovic. "From Clusters to Cluster-Based Economic Development." Special Issue on Global Value Chains and Innovation Networks: Prospects for Industrial Upgrading in Developing Countries. Part 1. International Journal of Technological Learning, Innovation, and Development 1, no. 3 (August 2008). View Details
  3. Industrial Specialization and Regional Clusters in the Ten New EU Member States

    Orjan Solvell, Christian H.M. Ketels and Goran Lindqvist

    Purpose—The purpose of this paper is to provide an analysis of regional concentration patterns within ten new European Union (EU) member states, EU10, and make comparisons with EU15 and the US economy.
    Design/methodology/approach—Industrial specialization and clusters are measured as employment in the intersection between a sector (three-digit NACE data) and a particular region (NUTS 2 level), with a total of 38 sectors and 41 regions within EU10. Regional cluster size and degree of specialization is measured along 3D: absolute number of employees (>10,000 jobs is used as cut-off for a regional cluster), degree of specialization (regional sector employment is at least two times expected levels) and degree of regional market labor dominance (>3 per cent of total employment in a particular sector). Each of these three measures of cluster size, specialization and labor market focus are classified with a "star." The largest and most specialized clusters receive three stars.
    Findings—EU10 exhibits 19 three-star regional clusters, which display high values for each of the three measured parameters. In addition, there are 92 two-star regional clusters and 313 one-star regional clusters. The analysis also suggests that regional concentration in EU10 is clearly lower than in the USA, and slightly lower than in the old EU member states. In a few cases—IT, biopharmaceuticals and communications equipment—where the total size of the cluster is small, and there is little historical legacy in Eastern Europe, the EU10 exhibits higher geographical concentration than EU15.
    Research limitations/implications—Overall, the economies of EU10 exhibit a pattern of geographical concentration close to a random distribution, i.e. the process of regional concentration and redistribution of industry is in a very early phase. If Europe is to build a more competitive economy, industrial restructuring towards larger clusters must be allowed and pushed by policy makers both at the national and EU levels.
    Practical implications—Policymakers must be well informed about geographical concentration patterns of industry. The research offers a consistent methodology of mapping regional clusters and geographical concentration patterns across sectors.
    Originality/value—This paper is the first in measuring regional concentration patterns in Europe at this fine level, and is based on a new methodology developed by Professor Michael E. Porter at Harvard University. The paper has also introduced a new method of ranking clusters according to the star model.

    Keywords: Geographic Location; Policy; Employment; Industry Clusters; Industry Structures; European Union; United States;

    Citation:

    Solvell, Orjan, Christian H.M. Ketels, and Goran Lindqvist. "Industrial Specialization and Regional Clusters in the Ten New EU Member States." Special Issue on Macro and Micro Level Competitiveness Competitiveness Review 18, nos. 1/2 (2008): 104 – 130. View Details
  4. Industrial Policy in the United States

    Christian H.M. Ketels

    Does US government policy purposefully benefit particular industries or is industrial policy absent in the USA? Based on a review of recent US policies this paper argues that the USA applies many policies with an industry-specific impact. But these policies do not differ significantly from those in other countries and the process in which US industrial policies emerge severely limits their consistency. What differentiates the USA is a microeconomic business environment that enables a high degree of regional specialization, benefits especially knowledge-driven industries, and raises the impact of innovation and entrepreneurship policies.

    Keywords: Microeconomics; Entrepreneurship; Policy; Innovation and Invention; Supply and Industry; Business and Government Relations; United States;

    Citation:

    Ketels, Christian H.M. "Industrial Policy in the United States." Special Issue on The Future of Industrial Policy Journal of Industry, Competition and Trade 7, nos. 3-4 (December 2007): 143–323. View Details
  5. Review of Stig Tenold's Tankers in Trouble

    Christian H.M. Ketels

    In "Tankers in Trouble," Stig Tenold looks at the experience of the Norwegian shipping industry during the 1970s and 1980s, specifically of those companies active in the tanker business. The review discusses some complementary insights that can be gained from applying Michael Porter's cluster framework to the analysis of Norwegian shipping and the crisis of the 1970s and 1980s. It shows how the cluster perspective contributes to the understanding of why Norwegian shipping was so strong in the first place, it helps to distinguish whether the Norwegian crisis of the 1970s and 1980s was mainly demand or supply driven, and it can explain the drivers of the resurgence of Norwegian shipping in the 1990s and 2000s.

    Keywords: Experience and Expertise; Framework; Management Analysis, Tools, and Techniques; Crisis Management; Perspective; Demand and Consumers; Industry Clusters; Shipping Industry; Norway;

    Citation:

    Ketels, Christian H.M. "Review of Stig Tenold's Tankers in Trouble." International Journal of Maritime History 21, no. 2 (December 2007): 407–411. View Details
  6. Competitive Advantage and the Value Network Configuration: Making Decisions at a Swedish Life Insurance Company

    Øystein D. Fjeldstad and Christian H.M. Ketels

    When the Swedish Life Insurers Förenade Liv found themselves in difficulties in a rapidly changing market, their response was to call in the consultants. And one of the consultant's first suggestions was to use the Value Network, not the Value Chain, as a new analytical tool to represent the company's activities. How the Value Network model changed the way company executives and consultants framed the company's problems and evaluated its strategic options provides the background to this article. The authors take care to outline how value creation and competitive advantage work in mediating industries that facilitate transactions between customers within a network, and show how the Value Network model asks more effective questions, and thus yields more effective answers, in such situations. In sectors such as communications, insurance etc, where firms' main activity is to assemble and manage a pool of customers as the network in which transactions take places, who already is a customer is important for who might become one. The composition and the size of the customer set can be as important an influence on the benefits of being a member as the quality of the actual services the network provides: mechanisms affecting the composition of the customer pool are at the heart of the company's competitive position. The case analysis shows how, while the product offered had not deteriorated, the market into which it was being offered had changed radically, with dramatic effects on the customer pool that could be attracted. The authors point to the growing importance of new market sectors with network properties, where old value configurations are being challenged and supplanted, and where using the appropriate analytical tools to understand them can become critical for companies to gain a competitive edge in their strategic decision-making.

    Keywords: Competitive Advantage; Fluctuation; Networks; Management Analysis, Tools, and Techniques; Value; Quality; Decision Making; Market Transactions; Performance Effectiveness; Customers; Insurance Industry; Sweden;

    Citation:

    Fjeldstad, Øystein D., and Christian H.M. Ketels. "Competitive Advantage and the Value Network Configuration: Making Decisions at a Swedish Life Insurance Company." Long Range Planning 39, no. 2 (April 2006): 109–131. View Details

Book Chapters

  1. Ein Jahrzehnt Clusterpolitik und -forschung: Implikationen für eine moderne, clusterorientierte Wirtschaftsförderung

    Christian H.M. Ketels

    Reflecting on the experience of nearly two decades this chapter discusses the nature of cluster-based economic policies. It first looks at the types of programmes and initiatives that have emerged, and the evidence on their impact on economic outcomes. It then tracks the evolution of academic research on cluster policies over this period, where methods have seen a fundamental change. Finally, the chapter develops learnings from the recent research for cluster policy practice, and identifies areas in which practitioners need research to provide new concepts and guidance.

    Keywords: clusters; cluster initiative program; economic policy; regional policy; Policy; Economics;

    Citation:

    Ketels, Christian H.M. "Ein Jahrzehnt Clusterpolitik und -forschung: Implikationen für eine moderne, clusterorientierte Wirtschaftsförderung." Chap. 3 in Zukunft der Wirtschaftsförderung, edited by Rasmus C. Beck, Rolf G. Heinze, and Josef Schmid, 45–64. Nomos Verlagsgesellschaft, 2014, German ed. View Details
  2. What Is Regional Strategy? Lessons from Business Strategy

    Christian H.M. Ketels

    Regional policy, especially in Europe, makes increasing reference to the notion of strategy, a conceptual tool developed in the area of business studies. This chapter reviews some key aspects of strategy as defined by the so-called "positioning school" and discusses how these ideas can be translated into the context of regions. It identifies differences between the two areas but also finds sufficient similarities for the concept of strategy to be useful for regions. The value of a more thorough reflection on the notion of strategy becomes clear when the conceptual framework is contrasted with the reality of strategies as defined by regions. We find that some important aspects of strategy, especially the notion of strategic positioning based on specific business environment qualities, are systematically missing. Regions would benefit from a closer look at the insights from businesses when developing their strategies.

    Keywords: strategic planning; competitiveness; regional policy; Strategic Planning; Globalized Economies and Regions; Competition; Policy;

    Citation:

    Ketels, Christian H.M. "What Is Regional Strategy? Lessons from Business Strategy." Chap. 3 in Strategies for Shaping Territorial Competitiveness, edited by Jesus M. Valdaliso and James R. Wilson, 37–54. New York, NY: Routledge, 2015. View Details
  3. Clusters and Competitiveness: Porter's Contribution

    Christian H.M. Ketels

    While clusters have been known to exist at least since the days of Marshall, Michael Porter's work, first in The Competitive Advantage of Nations (Porter, 1990) and then in On Competition (originally published in 1998; updated edition in Porter, 2008), has undoubtedly had a singular role in raising the profile of these ideas to a wider audience. The chapter looks at the origins of Porter's interest in clusters, which turns out to be a natural extension of his earlier work on companies. It identifies the key characteristics of Porter's conceptual thinking on clusters. The discussion explores the particular perspective that Porter has taken, often as a result of his specific background and prior research interests. The chapter then turns to extensions of these core concepts in Porter's more recent work. A central focus of this work has been the creation of broad-based empirical datasets that allow the testing and further development of the original cluster framework. The fourth part then explores the policy implications to be drawn from Porter's work on clusters. Porter develops recommendations on how to leverage clusters as a tool in economic development. While many current cluster programs are broadly consistent with these ideas, some policy practice and much of the academic criticism of policies inspired by Porter's cluster work have taken a different direction, looking instead into ways of creating clusters. The fifth section discusses why Porter's work in this field has had such a profound impact, especially on practitioners. A central reason is that Porter addresses very specific needs of different practitioner constituencies, providing a framework and actionable ideas they could easily relate to. The final section turns to a number of open issues that will determine whether Porter's long-term impact on the practice and thinking in this field will reach its full potential.

    Keywords: Development Economics; Framework; Policy; Industry Clusters; Practice; Competitive Advantage;

    Citation:

    Ketels, Christian H.M. "Clusters and Competitiveness: Porter's Contribution." Chap. 10 in Competition, Competitive Advantage, and Clusters: The Ideas of Michael Porter, edited by Robert Huggins and Hiro Izushi, 173–192. Oxford University Press, 2011. View Details
  4. Política de clústers: guia per a l'Estat del Debat (Cluster Policy: The State of the Debate)

    Christian H.M. Ketels

    The chapter provides an overview of the recent literature discussing the pros and cons of cluster policy

    Keywords: Cost vs Benefits; Policy; Body of Literature; Industry Clusters;

    Citation:

    Ketels, Christian H.M. "Política de clústers: guia per a l'Estat del Debat (Cluster Policy: The State of the Debate)." In Clusters i competitivitat: el cas de Catalunya (1993-2010), edited by Joan Miquel Hernandez Gascon, Alberto Pezzi, and Antoni Soy I Casals, 129 – 150. Papers d'economia industrial. Barcelona: Generalitat de Catalunya, Departament d'Innovació, Universitats i Empresa, 2010, Spanish ed. View Details
  5. Clusters and Industrial Districts - Common Roots, Different Perspectives

    Michael E. Porter and Christian H.M. Ketels

    Keywords: Industry Clusters; Local Range; Perspective;

    Citation:

    Porter, Michael E., and Christian H.M. Ketels. "Clusters and Industrial Districts - Common Roots, Different Perspectives." In The Handbook of Industrial Districts, edited by Giacomo Becattini, Marco Bellandi, and Lisa De Propris. Cheltenham: Edward Elgar Publishing, 2009. View Details
  6. The Global Competitive Position of the Baltic Sea Region

    Christian H.M. Ketels

    Keywords: Globalized Economies and Regions; Competition; Trade; Baltic Countries;

    Citation:

    Ketels, Christian H.M. "The Global Competitive Position of the Baltic Sea Region." Chap. 1.3 in Transnational Cooperation for Prosperity in the Baltic Sea Region, 15–19. Copenhagen: Nordic Council of Ministers, 2009. View Details
  7. Moving to a New Global Competitiveness Index

    Michael E. Porter, Mercedes Delgado-Garcia, Christian H.M. Ketels and Scott Stern

    Keywords: Globalization; Competitive Advantage; Mathematical Methods;

    Citation:

    Porter, Michael E., Mercedes Delgado-Garcia, Christian H.M. Ketels, and Scott Stern. "Moving to a New Global Competitiveness Index." Chap. 1.2 in Global Competitiveness Report 2008/2009, edited by Michael E. Porter and Klaus Schwab, 43–63. Geneva: World Economic Forum, 2008. View Details
  8. Clusterentwicklung als Element lokaler und regionaler Wirtschaftsentwicklung - internationale Erfahrungen

    Christian H.M. Ketels

    Keywords: Development Economics; Developing Countries and Economies; Local Range;

    Citation:

    Ketels, Christian H.M. "Clusterentwicklung als Element lokaler und regionaler Wirtschaftsentwicklung - internationale Erfahrungen." In Cluster in der kommunalen und regionalen Wirtschaftspolitik. 5th ed. Edited by Holger Floeting, 41–54. Edition Difu--Stadt, Forschung, Praxis. Berlin: Deutsches Institut für Urbanistik, 2008, German ed. View Details
  9. Microeconomic Determinants of Location Competitiveness for MNEs

    Christian H.M. Ketels

    The concept of microeconomic competitiveness based on the frameworks developed by Michael Porter since 1990 are popular with policy makers interested in improving the attractiveness and economic performance of their countries and regions. This concept also has many important implications for multinational businesses, a notion that has been initially discussed at the end of the 1990s. This chapter revisits the linkages between the two areas, focusing on the more recent learnings about microeconomic competitiveness and their implications for multinational companies. It lays out different dimensions of locational competitiveness and discusses their structural differences in terms of how they affect companies and how they can be affected by government. It finds that locational competitiveness is becoming an increasingly strategic question for both locations and companies: Locations need to choose their role in the global economy in terms of activities and value provided, and excel in the specific set of microeconomic dimensions that support this particular positioning. Companies need to choose locations that provide the specific assets and capabilities that are best placed to strengthen their own strategic positioning on the market place. The chapter also points out that the locational agenda for companies has broadened: they need to focus not just on choosing the right location, but on developing their strategies to leverage the locations in which they are present and on investing in those aspects of the microeconomic environment in their locations that are most critical to their own strategic position.

    Keywords: Microeconomics; Geographic Location; Multinational Firms and Management; Growth and Development Strategy; Competition;

    Citation:

    Ketels, Christian H.M. "Microeconomic Determinants of Location Competitiveness for MNEs." In Foreign Direct Investments, Location and Competitiveness. Vol. 2, edited by John Dunning and Philippe Gugler. Progress in International Business Research. Oxford: Elsevier, 2007. View Details
  10. The Microeconomic Foundations of Prosperity: Findings from the Business Competitiveness Index

    Michael E. Porter, Christian H.M. Ketels and Mercedes Delgado-Garcia

    Keywords: Microeconomics; Welfare or Wellbeing; Competitive Advantage; Globalized Economies and Regions;

    Citation:

    Porter, Michael E., Christian H.M. Ketels, and Mercedes Delgado-Garcia. "The Microeconomic Foundations of Prosperity: Findings from the Business Competitiveness Index." In Global Competitiveness Report 2006-2007, edited by Augusto Lopez-Claros, Michael E. Porter, Xavier Sala-i-Martin, and Klaus Schwab. Palgrave Macmillan: Palgrave Macmillan, 2006. View Details
  11. Competitiveness in Developing Economies: The Role of Clusters and Cross-Cutting Policies

    Christian H.M. Ketels

    Competitiveness is high up on the policy agenda for countries around the world and at all stages of development. But while there is little disagreement that countries need to "upgrade their competitiveness"—even more so as the level of globalization is increasing—there are many different views on what competitiveness actually is and which policies should be employed to improve it. In addition, there is a serious argument of whether the competitiveness framework applies equally to advanced as to developing economies and how these differences in terms of economic development affect appropriate policy choices. In particular, questions arise as to the role of cluster initiatives, an instrument that has become more widely used in many countries in recent years, in a developing economy context.

    Keywords: Developing Countries and Economies; Framework; Globalization; Policy; Growth and Development; Industry Clusters; Competitive Strategy;

    Citation:

    Ketels, Christian H.M. "Competitiveness in Developing Economies: The Role of Clusters and Cross-Cutting Policies." In Nurturing the Sources of Growth in Tanzania -- Workshop Proceedings. Dar-es-Salam: Tanzania Ministry of Planning, Economy, and Empowerment, 2006. View Details
  12. UK Competitiveness-Old Labour Market Institutions, New Collaborative Roles

    Christian H.M. Ketels

    Keywords: Labor and Management Relations; Working Conditions; Cooperation; Competitive Advantage; United Kingdom;

    Citation:

    Ketels, Christian H.M. "UK Competitiveness-Old Labour Market Institutions, New Collaborative Roles." In Productive Partnerships: The Role of Employment Relations in Growing the UK Economy, edited by Tony Pilch, 12–23. London: Smith Institute, 2006. View Details
  13. Export-Led Development in Regional Economies

    Christian H.M. Ketels

    Keywords: Trade; Developing Countries and Economies;

    Citation:

    Ketels, Christian H.M. "Export-Led Development in Regional Economies." In Encyclopedia of Community: From the Village to the Virtual World. 4 vols. Edited by Karen Christensen, Robin Jarrett, Dennis Judd, David Levinson, William Metcalf, Roberta Moudry, Ray Oldenburg, Sonya Salamon, Thomas Sander, Michael Shuman, Barry Wellman, and Michael Zuckerman. Great Barrington, MA: Berkshire Publishing, 2003. View Details
  14. The Impact of Globalisation

    Christian H.M. Ketels

    Keywords: Globalization;

    Citation:

    Ketels, Christian H.M. "The Impact of Globalisation." In Future Directions of Innovation Policy in Europe: Proceedings of the Innovation Policy Workshop. Vol. 31. Innovation Papers. Brussels: European Commission, Enterprise and Industry Directorate-General, 2002. View Details
  15. Cooperative Customer Management: Is There Strategic Potential for a New Relationship between Retail and Industry?

    Christian H.M. Ketels, Dirk Seifert and Alexander Kracklauer

    Keywords: Customer Relationship Management; Cooperation; Supply Chain Management; Retail Industry; Manufacturing Industry;

    Citation:

    Ketels, Christian H.M., Dirk Seifert, and Alexander Kracklauer. "Cooperative Customer Management: Is There Strategic Potential for a New Relationship between Retail and Industry?" In Consulting 2002, edited by Felix Breichenstein. Frankfurt, Germany: FAZ-Verlag, 2002. View Details

Working Papers

  1. Competitiveness and Clusters: Implications for a New European Growth Strategy

    Christian H.M. Ketels

    This paper develops policy recommendations on the use of cluster-based economic policies and the adoption of a new concept of competitiveness in the context of the new growth path that WWWforEurope aims to outline.
    A first section discusses and derives an initial set of policy implications from the existing literature. For clusters, these implications address both general practices of cluster-based economic development and specific issues related to the use of cluster-based concepts in a transition to a New Growth path. For competitiveness, it specifically discusses the notion of trade-offs among different dimensions of performance in the concept of beyond-GDP driven competitiveness.
    The second section of the paper explores the ways in which beyond-GDP objectives have been integrated into the current practice of cluster-based economic development efforts across Europe. It is based on interviews with policy makers and cluster initiatives as well as the review of relevant policy documents. For cluster programs, i.e. the policy actions implemented by government, the paper organizes the existing efforts into three categories, differentiated by the extent to which beyond-GDP categories drive the activities supported. For cluster initiatives, i.e. the collaborative efforts by private-public groups focused on enhancing the competitiveness of a specific regional cluster, the existence of a market and the need for systemic changes are identified as key factors that drive the adoptation of beyond-GDP objectives. There is also a discussion of the relevant scope of the activities in beyond-GDP related efforts relative to existing cluster categories.
    The third section analyzes the Europe 2020 Strategy, including its objectives, quantiative performance indicators, and the European Semester as a policy review process, from the perspective of the new definition of competitiveness proposed in M46. After exploring whether the objectives of the strategy and the new definition of competitiveness are compatible it looks at their ability to drive an effective and transparent policy process towards policies consistent with a New Growth Path.
    The final section then develops five policy conclusions from the prior analysis. Three are focused on the use of cluster-based economic development tools as instruments to achieve beyond-GDP objectives. The recommendations deal both with the way cluster-based tools can be used and with how they should be structured. Two of the conclusions are focused on the Europe 2020 strategy process. They deal with the need for a shared, explicit definition of competitiveness, proposing the definition developed in M46 as a candidate. And they deal with creating a more transparent policy process that more clearly separates political decisions from analytical evaluations.

    Keywords: competitiveness; clusters; economic growth; economic policy; European Union; Competition; Industry Clusters; Policy; Economic Growth; European Union;

    Citation:

    Ketels, Christian H.M. "Competitiveness and Clusters: Implications for a New European Growth Strategy." WWW for Europe Working Paper Series, No. 84, February 2015. View Details
  2. Clusters and the New Growth Path for Europe

    Christian Ketels and Sergiy Protsiv

    This paper outlines elements of a conceptual framework that clarifies the role that clusters play relative to government policies and actions of individual companies in supporting the emergence of "High Road" strategies that lead to better New Growth Path–related outcomes. It then focuses on creating a new set of data that can start shedding light on the empirical relevance of this framework. The first main section of the paper draws on a new set of employment and wage data across European clusters. The data is used to analyze whether cluster presence is significantly correlated with higher wages, which, as an indicator of higher productivity, are likely to signal the presence of "High Road" strategies. We then take a closer look at the scale of the relationship relative to location-specific and other effects. We find cluster presence to be significantly related to higher wages, with the effect being moderate but meaningful. This suggests that cluster presence enhances the ability of economic activities to deliver high performance but is unlikely to be able to substitute weak business environment conditions. The second section then deploys a wide range of regional performance data collected for the European Competitiveness Index and the European Cluster Observatory. We create indicators for New Growth Path performance and its main dimensions and classify European regions by their performance patterns. This provides critical insights into the compatibility of the different economic, social, and ecological objectives pursued. We then relate these outcomes to the presence of strong cluster portfolios and strong business environment conditions. Both are most strongly associated with stronger economic outcomes, with lower impact on other dimensions of the New Growth Path. The third section creates a new dataset of cluster initiative intensity at the regional and cluster category level. It also classifies close to 1,000 cluster initiatives in Europe by their engagement in New Growth Path–related activities. We then deploy this data to test the impact of cluster initiatives on regional New Growth Path performance. Overall, we find evidence consistent with clusters playing a role in making "High Road" strategies more likely to emerge. We also find evidence that European regions differ in their strategies towards these goals, with some being able to pursue all three dimensions in parallel. Cluster initiatives widely engage in New Growth Path–related activities, indicating their potential as a tool in mobilizing joint action in these areas.

    Keywords: Technological Innovation; Competition; Industry Clusters; Globalization; Economic Growth; Europe;

    Citation:

    Ketels, Christian, and Sergiy Protsiv. "Clusters and the New Growth Path for Europe." WWW for Europe Working Paper Series, No. 14, July 2013. (WIFO, Vienna.) View Details
  3. The Determinants of National Competitiveness

    Mercedes Delgado, Christian Ketels, Michael E. Porter and Scott Stern

    We define foundational competitiveness as the expected level of output per working-age individual that is supported by the overall quality of a country as a place to do business. The focus on output per potential worker, a broader measure of national productivity than output per current worker, reflects the dual role of workforce participation and output per worker in determining a nation's standard of living. Our framework highlights three broad and interrelated drivers of foundational competitiveness: social infrastructure and political institutions, monetary and fiscal policy, and the microeconomic environment. We estimate this framework using multiple data sets covering more than 130 countries over the 2001–2008 period. We find a positive and separate influence of each driver on output per potential worker. The microeconomic environment has a positive effect on output per potential worker even after controlling for historical legacies. Using our framework we define a new concept, global investment attractiveness, which is the cost of factor inputs relative to a country's competitiveness. This analysis reveals important insight into the economic trajectory of individual countries. Our framework also offers a novel methodology for the estimation of a theoretically grounded and empirically validated measure of national competitiveness.

    Keywords: Country; Competition; Microeconomics; Macroeconomics;

    Citation:

    Delgado, Mercedes, Christian Ketels, Michael E. Porter, and Scott Stern. "The Determinants of National Competitiveness." NBER Working Paper Series, No. 18249, July 2012. View Details

Cases and Teaching Materials

  1. European Integration: Meeting the Competitiveness Challenge

    Michael E. Porter and Christian Ketels

    The case discusses the origins and development of the European Integration process from the post-war period up to 2007, focusing particularly on the efforts of the Lisbon-agenda under way since 2000 to enhance Europe's competitiveness. It discusses the different policy areas that have been approached at the European level over time, and provides background on the architecture of European institutions. The case enables students to understand how European integration has affected competitiveness across the continent. It provides a platform to discuss the impact of collaboration across countries in large geographies on competitiveness, and the lessons that the European integration experience might hold for other world regions.

    Keywords: Integration; Globalized Economies and Regions; Competition; Development Economics; Global Range; Policy; Failure; European Union; Europe;

    Citation:

    Porter, Michael E., and Christian Ketels. "European Integration: Meeting the Competitiveness Challenge." Harvard Business School Case 714-405, July 2013. (Revised November 2013.) View Details
  2. New York City: Bloomberg's Strategy for Economic Development

    Michael E. Porter, Christian H.M. Ketels and Jorge Ramirez-Vallejo

    Traces the economic development of New York City from its founding in the 17th century through 2012. Focuses on the decisions made by New York City officials, past and present, highlighting the challenges of economic development at the city level. Enables deep examination of the interdependence and interrelation of economic policies at the city, state, and federal level and explores the role of economic and cluster performance. Detailed historical economic and social data allow for an evaluation of policy results. The case finishes highlighting the main economic challenges the city was facing in 2012.

    Keywords: History; Development Economics; Industry Clusters; Policy; Government Administration; Financial Crisis; Growth and Development Strategy;

    Citation:

    Porter, Michael E., Christian H.M. Ketels, and Jorge Ramirez-Vallejo. "New York City: Bloomberg's Strategy for Economic Development." Harvard Business School Case 714-404, July 2013. (Revised September 2013.) View Details
  3. Estonia: Transition, EU Membership, and the Euro

    Michael E. Porter, Christian Ketels and Örjan Sölvell

    The case discusses the economic development of Estonia, covering specifically the period from regaining independence from the Soviet Union in 1991 until 2015. It tracks the process from the initial transition towards a market economy to becoming an EU member country, including the 2007 crisis and the government’s response to it. The overall performance of the economy, the profile of its key clusters, and the quality of its business environment in 2015 are discussed. The case provides the background for an analysis of policy reforms in a transition economy, the role of legacy and geographical neighborhood for economic development, the implications of EU membership for a EU member country, and the relationship between microeconomic reforms and macroeconomic crisis.

    Keywords: Economy; Macroeconomics; Microeconomics; Policy; Government and Politics; Organizational Change and Adaptation; Strategy; Estonia;

    Citation:

    Porter, Michael E., Christian Ketels, and Örjan Sölvell. "Estonia: Transition, EU Membership, and the Euro." Harvard Business School Case 713-479, June 2013. (Revised March 2016.) View Details
  4. Vietnam: Sustaining the Growth of an Asian Tiger

    Michael E. Porter and Christian H.M. Ketels

    The case tracks Vietnam's economic policy choices and performance from the end of the Vietnam war to the Doi Moi economic reforms and the economic transformation that followed. Throughout this period, the country had become a darling of the international aid community. As the country was preparing for the 2011 Party Congress, however, signs of growing economic frictions were becoming increasingly visible. The case closes by setting the scene for the challenges the new leadership was going to face.

    Keywords: Conflict Management; Leadership; Policy; Transformation; Economic Growth; Developing Countries and Economies; Macroeconomics; Viet Nam;

    Citation:

    Porter, Michael E., and Christian H.M. Ketels. "Vietnam: Sustaining the Growth of an Asian Tiger." Harvard Business School Case 713-480, January 2013. (Revised August 2013.) View Details
  5. The Basque Country: Strategy for Economic Development

    Michael E. Porter, Christian H.M. Ketels and Jesus M. Valdaliso

    The Basque country, with a population of 2.1 million and covering 7,233 square kilometers, is an autonomous region located in the north of Spain, physically separated from it by the Pyrenees Mountains. Presents the history of the region—highly prosperous at the turn of the 20th century, but nearing bankruptcy by the 1950s. By 2001, the Basque GDP per capita had risen to a level well ahead of Spain and most European countries. At the same time that the region was enjoying the spoils of admirably executed cluster initiatives, it was being threatened by the destabilizing violence of the Basque separatist extreme, a slowing global economy, and an always precarious balance of power between the Basque's own government and the government of Spain.

    Keywords: History; Crime and Corruption; Industry Clusters; Competitive Strategy; Microeconomics; Developing Countries and Economies; Government and Politics; Basque Provinces; Spain;

    Citation:

    Porter, Michael E., Christian H.M. Ketels, and Jesus M. Valdaliso. "The Basque Country: Strategy for Economic Development." Harvard Business School Case 713-474, January 2013. (Revised March 2016.) View Details
  6. Remaking Singapore

    Michael E. Porter, Boon Siong Neo and Christian H.M. Ketels

    Looking through the lenses of both macro and micro economic policy, this case examines how Singapore has achieved such stellar success throughout its history, from independence through 2008. The case discusses the different policy choices the Singaporean government has made as well as how the government's structure has aided development.

    Keywords: History; Development Economics; Industry Clusters; Competitive Advantage; Policy; Economic Growth; Microeconomics; Government and Politics; Macroeconomics; Singapore;

    Citation:

    Porter, Michael E., Boon Siong Neo, and Christian H.M. Ketels. "Remaking Singapore." Harvard Business School Case 710-483, June 2010. (Revised August 2013.) View Details
  7. Iceland: Small fish in a global pond

    Michael E. Porter and Christian H.M. Ketels

    Describes the economic development of Iceland since 1945, focusing in particular on the years since 2000, when Iceland experienced strong growth and Icelandic companies aggressively internationalized.

    Keywords: Globalized Firms and Management; Competition; Macroeconomics; Iceland;

    Citation:

    Porter, Michael E., and Christian H.M. Ketels. "Iceland: Small fish in a global pond." Harvard Business School Case 708-472, November 2007. (Revised August 2009.) View Details
  8. Indonesia: Attracting Foreign Investment

    Michael E. Porter and Christian H.M. Ketels

    Describes the economic development of Indonesia from independence after World War II to 2006 and the post-Suharto period. The coverage of the post-Suharto period provides evidence of how political and economic conditions are intertwined after a change in the political regime. Profiles the business environment in 2006, including a documentation of past and present policies that shaped the current situation. A particular focus is Indonesia's stance towards attracting foreign direct investment (FDI). The country has a checkered history of oscillating between seeking and fighting foreign investors. Provides a perspective on the relative importance of FDI policies, general economic policies and business environment conditions, and the nature of competition from other locations on FDI flows.

    Keywords: History; Situation or Environment; Competitive Strategy; Emerging Markets; Policy; Foreign Direct Investment; Business and Government Relations; Public Administration Industry; Indonesia;

    Citation:

    Porter, Michael E., and Christian H.M. Ketels. "Indonesia: Attracting Foreign Investment." Harvard Business School Case 708-420, November 2007. (Revised January 2013.) View Details
  9. Latvia: Economic Strategy after EU Accession

    Michael E. Porter and Christian H.M. Ketels

    Describes the economic development of Latvia, a small eastern European country on the shores of the Baltic Sea, from regaining independence in 1991 to European Union (EU) accession in 2004 and is set on May 1st, 2004, the day Latvia became an EU member. Latvia had achieved strong growth since regaining independence from the Soviet Union in 1990. Describes Latvia's economic development over this period, discussing the economic policy efforts that have taken place and includes general information on the country, its history and politics, and the business environment that companies faced in 2004. A special focus is the influence that the EU accession process has on the Latvian economy and on economic policy choices in the country. Challenges students to discuss how the environment changes as EU membership is achieved, and which new priorities the country might need to define for its economic policy.

    Keywords: Developing Countries and Economies; Economic Growth; Policy; Business and Government Relations; European Union; Latvia;

    Citation:

    Porter, Michael E., and Christian H.M. Ketels. "Latvia: Economic Strategy after EU Accession." Harvard Business School Case 707-515, February 2007. (Revised November 2007.) View Details
  10. Cluster Mobilization in Mitteldeutschland

    Jeffrey Fear, Christian H.M. Ketels and Claudia Linsenmeier

    As part of the privatization in Eastern Germany after the fall of the Berlin Wall, Dow Chemical made a major investment in the Halle-Leipzig region, one of the largest chemical industry sites in Europe. The executive in charge of Dow's operations in the region, Bart Groot, increasingly felt that the long-term success of Dow's investment depended on a more dynamic development of the entire regional economy. On his own initiative, in 1997, Groot launched a private sector-driven effort to enhance the economic development in central Germany, the region located around Halle-Leipzig. Bundling together 50 other firms and four cities, he founded a regional marketing effort to brand or market the area, but then shifted focus to building clusters. Examines the motivations of companies and company executives to get involved in regional competitiveness efforts and provides a platform to discuss the factors that drive the success of cluster-building efforts through cooperation across firms in a disadvantaged area.

    Keywords: Industry Clusters; Development Economics; Privatization; Chemicals; Foreign Direct Investment; Management Teams; Private Sector; Competitive Strategy; Brands and Branding; Market Participation; Chemical Industry; Germany;

    Citation:

    Fear, Jeffrey, Christian H.M. Ketels, and Claudia Linsenmeier. "Cluster Mobilization in Mitteldeutschland." Harvard Business School Case 707-004, August 2006. (Revised May 2016.) View Details
  11. Latvia: Economic Strategy after EU Accession (TN)

    Michael E. Porter and Christian H.M. Ketels

    Teaching note to 707515.

    Keywords: Multinational Firms and Management; Emerging Markets; Market Entry and Exit; Perspective; Opportunities; Retail Industry; Latvia; Russia; China; Germany; India;

    Citation:

    Porter, Michael E., and Christian H.M. Ketels. "Latvia: Economic Strategy after EU Accession (TN)." Harvard Business School Teaching Note 707-524, March 2007. View Details

Presentations

  1. UK Competitiveness: Entering a New Stage

    Christian H.M. Ketels

    This presentation draws on ideas from Professor Porter's articles and books, in particular, The Competitive Advantage of Nations (The Free Press, 1990), "The Microeconomic Foundations of Economic Development," in The Global Competitiveness Report 2003, (World Economic Forum, 2003), "Clusters and the New Competitive Agenda for Companies and Governments" in On Competition (Harvard Business School Press, 1998), and our joint ESRC/DTI report "UK Competitiveness: Entering a New Stage," 2003.

    Keywords: Economics; Growth and Development; United Kingdom;

    Citation:

    Ketels, Christian H.M. "UK Competitiveness: Entering a New Stage." Smith Institute, London, United Kingdom, March 16, 2004. View Details
  2. Cluster-Based Economic Development: What Have We Learned?

    Christian H.M. Ketels

    This presentation draws on ideas from Professor Porter's articles and books, in particular, The Competitive Advantage of Nations (The Free Press, 1990), "The Microeconomic Foundations of Economic Development," in The Global Competitiveness Report 2003 (World Economic Forum, 2003), "Clusters and the New Competitive Agenda for Companies and Governments" in On Competition (Harvard Business School Press, 1998), and the "Cluster Initiative Greenbook" by C Ketels, O Solvell, and G Lindqvist.

    Keywords: Economics; Growth and Development; United Kingdom;

    Citation:

    Ketels, Christian H.M. "Cluster-Based Economic Development: What Have We Learned?" United Kingdom, Department of Trade and Industry, London, March 17, 2004. View Details
  3. Asia Competitiveness Institute Lee Kuan Yew School of Public Policy

    Christian H.M. Ketels

    2003This presentation draws on ideas from Professor Porter's articles and books, in particular, The Competitive Advantage of Nations(The Free Press, 1990), "Building the Microeconomic Foundations of Competitiveness," in The Global Competitiveness Report 2002, (World Economic Forum, 2002), "Clusters and the New Competitive Agenda for Companies and Governments" in On Competition(Harvard Business School Press, 1998), and joint work with the SasinGraduate School of Business on Thai competitiveness financed by the NESDB.

    Keywords: Economics; Growth and Development; Thailand;

    Citation:

    Ketels, Christian H.M. "Asia Competitiveness Institute Lee Kuan Yew School of Public Policy." Institute for Strategy and Competitiveness, Bangkok, Thailand, May 2003. View Details
  4. Global Competitiveness Report 2004-05: Sweden’s Business Competitiveness

    Christian H.M. Ketels

    This presentation draws on ideas from Professor Porte'’s books and articles, in articular, "Building the Microeconomic Foundations of Prosperity," in The Global Competitiveness Report 2004-05 (World Economic Forum, 2004); "Clusters and the New Competitive Agenda for Companies and Governments," in On Competition (Harvard Business School Press, 1998); Clusters of Innovation Initiative (www.compete.org), a joint effort of the Council on Competitiveness, Monitor Group, and ongoing research.

    Keywords: Economics; Growth and Development; Sweden;

    Citation:

    Ketels, Christian H.M. "Global Competitiveness Report 2004-05: Sweden’s Business Competitiveness." Global Competitiveness Report Launch, Stockholm, October 13, 2004. View Details
  5. The Cluster Observatory Classroom

    Christian H.M. Ketels, Örjan Sölvell and Göran Lindqvist

    The European Cluster Observatory offers a free educational video series: ON CLUSTERS. The series covers three programs: 1.Cluster Dynamics, 2.Cluster Policy, 3.Cluster Management

    Keywords: Economics; Growth and Development;

    Citation:

    Ketels, Christian H.M., Örjan Sölvell, and Göran Lindqvist. "The Cluster Observatory Classroom." European Cluster Observatory, March 2010. View Details
  6. European Competitiveness in 2004

    Christian H.M. Ketels

    This presentation draws on ideas from Professor Porter's articles and books, in particular, The Competitive Advantage of Nations (The Free Press, 1990), "Building the Microeconomic Foundations of Competitiveness," in The Global Competitiveness Report 2003-2004, (Oxford University Press, 2004), "Clusters and the New Competitive Agenda for Companies and Governments" in On Competition (Harvard Business School Press, 1998), and ongoing research on clusters and competitiveness.

    Keywords: Economics; Growth and Development; Croatia;

    Citation:

    Ketels, Christian H.M. "European Competitiveness in 2004." MBA Lecture, Sveučilište u Zagrebu, Ekonomski fakultet, June 16, 2004. View Details
  7. Microeconomic Aspects of Competitiveness:Lessons for Post-Crisis Growth Policies

    Christian H.M. Ketels

    Prof. Christian Ketels - Institute for Strategy and Competitiveness, Harvard Business School and Center for Strategy and Competitiveness, Stockholm School of Economics

    Keywords: Economics; Growth and Development; Society; Latvia;

    Citation:

    Ketels, Christian H.M. "Microeconomic Aspects of Competitiveness:Lessons for Post-Crisis Growth Policies." Institute for Strategy and Competitiveness, Riga, Latvia, September 15, 2010. View Details

Reports

  1. Review of Competitiveness Frameworks: An Analysis Conducted for the Irish National Competitiveness Council

    Christian H.M. Ketels

    The report reviews recent research on competitiveness as well as the use of competitiveness frameworks applied in leading international competitiveness rankings and in national competitiveness assessments. The report includes four main parts: The initial chapter focuses on the definition of competitiveness, looking at both the academic debate about the term and the role such definitions have played in guiding applied work. The following chapter turns towards the fundamental drivers of competitiveness. The third part of the review turns towards the measurement of competitiveness, looking at the current practice of competitiveness rankings and reports, and highlighting the key conceptual issues in translating data on different aspects of competitiveness into policy-relevant analysis and advice. A final chapter contrasts the competitiveness framework currently applied by the Irish NCC with this research and develops a set of concrete suggestions for further developing it.

    Keywords: competitiveness; Competition; Analysis;