Research Institute for High-Life

2. Regional innovation and the formation of industrial clusters

Industrial clusters became the focus throughout the world in the 1990s as a means of regional economic development. In Japan, a plan for industrial clusters to create regional innovation and entrepreneurial ventures and an intellectual cluster plan to make use of regional scientific technology were started in 2001. Moreover, various programs to support industrial development in cooperation within the regions, such as Japan Brand, the Regional New Consortium Project, and the Regional Innovation Project, have been provided (refer to Chapter 1).
A cluster is generally defined as a system in which producers, service providers, educational and research institutions, and other public and private institutions establish a variety of relationships and are located close to one another.
Industrial development with the cluster policy is also possible in regions lacking industrial structures or intellectual resources. It is necessary to restore clusters through innovations such as new designs or products, to create new products (soft and hard) using core compefences that provide advantages, and to locate the necessary elements of the entire value chain to ensure sustainability. Since a cluster has a limited cycle, the region must conduct continuous research on markets and technological trends. Once a cluster is fully organized, it can provide mechanisms to collect information, predict changes in demand, and find new opportunities. Supportive measures taken by regional governments for the operation of clusters generally include the following:

○ Understanding and benchmarking regional economies
○ Create cluster associations
○ Organizing service structures that allow businesses to use services easily
○ Building a specialized work force
○ Stimulating innovation and entrepreneurship
○ Providing incentives and funding for inter-firm collaboration

In this study, we conducted literature research and field surveys on regions in Austria and Northern Italy in order to understand how regional innovations are being promoted through cluster policies in regions with industrial structures based on small to medium-sized businesses. The following is a summary of our findings.

3. Cluster policies in the Alps regions

○ Upper Austria (Austria)
One of the regions where cluster policies are highly valued in Europe is the state of Upper Austria. The population of this state is 1.4 million and the population of the state capital, Linz, is 190, 000. Although the proportion of laborers in the agricultural sector is high at 13%, the per-capita GDP is higher than the average for the entire European Union.

Table 1: Industrial cluster and operational institutions in various regions

Before the cluster boom, this state formulated the “Strategic Program 2000+” (1998-2003) and pursued a cluster-oriented economy and technologies. The program includes three strategic fields: technology and research development, education, and industrial location. The aims of the program are to promote business innovation and to systematically expand fields in which the state has economical and technological advantages through network-based cooperation using the “State Future Fund”. In 2005, a new strategic program called “Innovative Upper Austria 2010” (2005-2010) was started. This strategic program aims to enhance competitiveness and promote internationalization through clusters, with a particular focus on small to medium-sized businesses. The total amount expenditure of the 5-year program is 500 million euros. This is the biggest program for small to medium-sized businesses in Austria, and it aims to create 20,000 new jobs.
Currently, seven clusters—automobile/drive TECH, plastics, furniture/wood construction, eco-energy, food, health, and mechatoronics—as well as four networks—human resources, logistics, design/media, and environmental technology—have been created since 1998. While this is promoted through clusters based on cooperative projects and collective promotional activities for existing industrial fields, operations for human resources, design, environmental technologies, etc. are performed through networks based on referrals, consultations, and education. There are about 1,600 member companies. These include not only companies from within the state but also some from neighboring countries and other states in Austria.
The executive institution of the cluster policy is the Technology Marketing Association (TMG), which is funded by the state government, the Chamber of Commerce, and the local government. This organization, with its 30 staff members, has a promotional structure that enables it to continuously implement the region’s unique strategy, including not only the strategic programs and research, planning, and investment for innovation but also coordination with various industrial developmental programs in the EU.
Although affiliate organizations of TMG are mainly in charge of operational support for the clusters, the Chamber of Commerce is in charge of the food cluster while the Energy Agency (established in 1991; 25 staff members) established by the state government is in charge of eco-energy.

○ Tyrol (Austria)
The population of Tyrol State is 700,000. The population of the state capital, Innsbruck, is 130,000, and it is a university city with 23,000 students. The clusters of Tyrol were established starting with a cooperative project of the EU and the state government called “Regional Innovation and Technology Transfer Strategy (RITTS, 1998-2000)”. Since 2003, Tiroler Zukunftsstifutung(24 staff members) established by the state government in 1997 has been providing support for cluster operations. There are clusters for renewable energy, ICT, life science, wellness, and mechatronics. Although this foundation plays a similar role to TMG, it also carries out independent activities, such as hosting lectures related to energy-efficient architecture at Innsbruck University.

○ South Tyrol (Italy)
South Tyrol is the popular name for the province of Bolzano, which has a population of 480,000. The population of the state capital, Bolzano, is 100,000. The industrial sector is small in South Tyrol, where traditional industries such as food, wood, construction, and mining are the main industries. More than 90 percent of the regional businesses are small businesses with fewer than 10 employees. Moreover, this region is environmentally disadvantaged for pursuing innovation in that it is geographically difficult to build concentrations of businesses and the local technicians are not provided a wide range of training despite having the Free University of Bozen-Bolzano.
The state government is now developing a strategy based on considerations of the region’s characteristics and the idea that it is possible to have an impact on the functioning of the regional economy with intangible forces, such as human resources, knowledge and technology transfers, and business management, without changing the traditional industrial structure. The pillars of the strategy are to provide tools for close partnerships between the public and private sectors, the cooperation of labor for businesses, innovation, and quality improvement and to create clusters to promote these changes. With funding from the EU’s regional development fund, a program introducing “Cooperation and Technological Innovation to Very Small Family-Run Traditional Businesses” was introduced in 2002-2004, and four clusters, including the wood sector, have been created in this process. The cluster for the wood sector, which includes 175 member companies, has been promoting cooperative projects requiring specific investments in areas such as innovation for wooden architecture, indoor lighting, interiors, and marketing.
Based on these experiences, “TIS Innovation Park”, an institution providing functions for technology transfers, incubation, cluster operations, and technological development, was established in Bolzano in 2006. This institution utilizes the existing facilities purchased by the regional government. The present clusters include five fields: food, construction & facility management, wood/technology, sports & winter technology, and ICT. The operations of each cluster are supported by a system of subsidies from the EU, Italy, and the state government.
Innovation Park has 40 staff members with a mean age of 30 years old. Similar to other cases, only one manager is hired for each cluster, and the managers are recruited from other regions of Italy and other countries if a suitable person cannot be found in the region.
Activities to promote international networks are also conducted. A conference of managers from various countries and various regions was held in Vienna in 2007, contributing to the training of managers and the expansion of networks among clusters through the exchanging of experiences among the various clusters.

4. Implementation status of renewable energy industries
This table shows the implementation status of industries related to renewable energy in the three regions described above. In Upper Austria, the “Energy Action Plan” has been in place since 1993. In 1991, the Energy Agency was established to promote energy efficiency, the use of renewable energy resources, innovations in energy technology, the development of regional energy research, the provision of information regarding energy, and the provision of advice to households, the local government, and companies. In addition, the agency supports the operations of the eco-energy cluster established in 2000.

Table 2: Executive institutions of renewable energy policy in each region

In Tyrol, traditional clusters associated with energy-saving housing have been integrated, and Tiroler Zukunftsstifutung has been managing the renewable energy cluster since 2007. At the same time, the Renewable Energy Center was established as a part of the Foundation to provide business support in areas such as technology transfers, applications for subsidies, cooperative projects, correspondence with EU programs, participation in trade shows, and marketing for promising companies in the field (51 companies in the region). The Renewable Energy Center conducted a preliminary survey for a Solar City in 2007 in cooperation with businesses and organizations in both the region and other regions. This survey studied the optimal relationship between the use of renewable energy and the architectural materials/construction for the development projects in the central district (5.4 ha) of the tourist area (population of 10,000). In addition, the Renewable Energy Center is located within this tourist area.
In South Tyrol, the Technology Center was established in 1998 to support relatively young industrial fields, such as renewable energy, but it was integrated into the newly established TIS Innovation Park. The Renewable Energy and Technology Center was established in 2007. The activities of this institution are similar to those of the two previously discussed cases, including feasibility investigations, consultations in the field of technology and law, leadership for research and development project, and the hosting of cooperative conferences for businesses. The institution also conducts energy tours that show people around facilities related to renewable energy and energy saving in the region and also provides training for skilled specialists and conducts marketing for technologies in the region.
As shown in the table, the measures and policies for renewable energy in Tyrol and South Tyrol mainly focus on energy efficiency, the development of human resources for energy management, and industrial development.
Regional revitalization based on renewable energy relies on expanding industry and employment opportunities by producing renewable energy and promoting energy efficiency. However, research, development, and manufacturing of solar panels, biomass-associated equipment, wind-power generators, etc. in South Tyrol are mainly conducted by companies in other regions. Therefore, the main roles of the regional companies are providing technological services related to the efficient use of energy and energy-efficient architecture that responds to the regional climate, manufacturing related equipment, and producing energy-saving architecture.
A new masters program, “CasaClima”, was opened at the Free University of Bolzano in 2008 in order to develop human resources capable of “planning and coordinating projects at the municipal and industrial levels based on energy saving”, and there is a strong need for such human resources in the regional industrial arena.

5. Innovations in tourism: new trends in tourism
Both domestically and overseas, efforts for tourism related to health and wellness have been made in each region. There are two major challenges in this type of new tourism. The first challenge is how to certify the effects or quality of service when using health and wellness to attract tourists (quality certification and quality management). The second challenge is how to provide health and wellness services as a region while working together with tourism businesses, related businesses, and research and education institutions. It is necessary to work together with various fields such as environmental science, health science, sports science, and medical and pharmaceutical science in order to meet the region’s challenges. This also involves securing high-quality service staff and maintaining quality in education, the environment, and landscapes (through the creation of clusters, for example).

○ Activities of the wellness cluster
In the Alps regions, wellness clusters have been playing an active role as shown in the table.
The wellness cluster in Tyrol is operated and supported by the Tiroler Zukunftsstifutung and involves 47 businesses and institutions including tourism businesses, academic research institutions, and related companies. The themes cover a wide range of fields, from wellness-related facilities, the development of various products including cosmetics, and improvements of service quality. Looking at the annual schedule of the cluster, we can see skill practice, seminars, studies of advanced cases ,participation in trade shows,and participation in energy tours conducted by other clusters have been planned. A seminar with the theme of “contributions of the medical field in the wellness field” was organized by medical and rehabilitation experts and held in the year 2008. Although the tourism business has joined Wellness Tirol, this is a cluster that aims to provide policy support, knowledge transfers, and the development and provision of related products for the tourism businesses (such as hotels and resorts).
Welltain is a stay-over program for individuals with metabolic syndrome that is provided by both the tourism association of local ski resorts (head office) along with affiliated hotels, and it provides health checkups and provides instructions to people on how to exercise and relax based on their individual health conditions. This program was developed after the efficacy of one- to three-week stay-over programs was recognized by the Austria medium altitude study (1998 to 2000) conducted in the region.

Table 3: Wellness clusters and their activities

○ Standards for wellness quality and certification systems
The extra-regional cluster (or network, rather) includes organizations that set quality criteria for wellness services in hotels and facility environments and conduct cooperative marketing.
Best Health Austria is a certification organization for hotels, bath facilities, rehabilitation clinics, etc. in Austria. Alpen Wellness certifies hotel resorts in the Alps regions. There are other similar wellness-related certification systems in other countries, including eight in Germany, and this may cause confusion for consumers. For this reason, a project that aims to review and introduce a quality certification system with European standards is underway.
Alpine Pearl, which was originally an EU-supported project (2003 to 2006), is a federation of tourism sites that has created entry criteria related to specific environmental protection policies and conducts cooperative marketing. This organization aims to defy the conventional wisdom that automobile accessibility is necessary for tourism sites. Participating tourism sites include 21 local governments, ranging from fully developed traditional hot spring resorts with good access via public transportation to small-scale local governments in mountain areas far from public transportation. It is an interesting challenge in terms of global warming policy. Incidentally, the EU’s eco label for tourism accommodation services was introduced in 2003. As of 2008, Italy holds the largest number of 82 eco-labeled tourism accommodation facilities.

○ Projects for cooperation among regions
In general, these projects are divided into two types of clusters. Technological clusters are closely linked with research&development and science. One of the keys to competitiveness is innovation based on research& development. On the other hand, knowledge clusters gain competitiveness (innovative force) through the value of experience in the fields of actual production and service. In this regard, the field of tourism has the characteristics of a knowledge cluster. Efforts being made by one business are easy to mimic and efforts and experiences of tourism sites are easily transferred to other regions. That is, the rate of learning is high. Many EU-supported projects in the Alps regions are trying to exchange experiences and promote knowledge transfers among regions to the fullest extent possible.
The Alpshealthcomp Project (2004-2007), which aims toward the “competitiveness and sustainability of the Alps regions as destinations for health and wellness”, has been conducted in regions in Italy, Germany, and Austria. The local governments (or tourism associations) and universities/research institutions of each region participate in pairs to establish a structure for promoting exchanges of experience and knowledge and knowledge transfers among regions, among universities, and between the fields of tourism and research. The achievements of this project have led directly to the activities of “Alpen Wellness”, one of the project members.
“Development of Sustainable Tourism focusing on Wellness (DOSTWELL)” (2005 to 2007) is a project that is more strongly characterized by knowledge transfers and involves local governments and persons affiliated with universities in countries with developed tourism industries, such as Germany, Switzerland, and Austria, as well as tourism associations in the former Balkan states currently undergoing economic recovery, and it also provides advice on specific areas of tourism development through mutual on-site inspections. Even after the project was completed, this organization continues its own activities.

○ Staff training: efforts of OJT
Acquiring the knowledge necessary for health and wellness services is essential for securing quality service. Interesting efforts being made for OJT include an educational program proposed by a research group of the Munich University of Applied Sciences(refer to Chapter 4: Alpshealthcomp). This educational program is an 8-day (60-hour) program based on two pillars: understanding the regional environment (nature, history and culture, sustainable development) and learning about Alpene health (local remedies and therapy, nature sports).
Although unique training programs and regional qualifications are implemented throughout Japan, it is hoped that a more comprehensive and convenient training system for OJT will be constructed based on these efforts in cooperation with local universities.

○ Scientific studies on the healing effects of natural resources
The development of services and products based on scientific evidence and the training of human resources result in increased competitiveness and marketing for a region aiming to become a destination for health and wellness. In the Alps regions, natural healing effects have been studied through research on the region’s water and herbs as well as the Austria medium altitude study, leading to the development of cosmetics, health foods, and therapies (refer to Chapter 4).
In Japan, there have been no surveys like the Austria medium altitude study that have scientifically studied the effects of stay-over programs. It is believed that guidelines based on scientific surveys and literature research at the national or prefectural level may contribute to regional revitalization and health promotion for the people of Japan by promoting destinations for health and wellness.

6. Conclusions

(1) Regional innovation strategies and the establishment of regional cluster policies
As in the EU, there are also various policies and systems for promoting regional innovation in Japan, including industrial cluster plans. How to shape, organize, and direct regional clusters that make active use of these policies and systems, take advantage of regional characteristics, and target specific markets are the challenges facing the communities. In order to face these challenges, there is a need to construct independent regional innovation strategies and cluster policies to promote these strategies.
From the perspective of regions in Japan, Upper Austria, which has a much smaller economy, has a clear direction and clear budget for innovation strategy programs and cluster policies, contributing to leadership for the cooperative development of companies and to marketing. As for regions with weak industrial structures, the efforts of South Tyrol, where clusters corresponding to the regional characteristics have been established, will be helpful.
These regional clusters promote collaboration and networks not only through clusters in the region but also with both domestic and overseas clusters. Industries expand beyond administrative districts. If there are no organizations for managing these clusters, they will end up providing only fragmented networks and fragmented information exchange. Organizations that limit their territories to regional industrial groups, as well as the departments and agencies of local governments that limit themselves to their own administrative districts, cannot take on this managerial role. The establishment of both operational organizations for new clusters corresponding to the conditions of each region as well as mechanisms to create cooperative projects will be required in Japan as well.

(2) Toward the development of renewable-energy industries utilizing regional characteristics
In every new field, there are aspects that are not understood by regional companies, universities, and government-related research institutions. The promotional policies of Upper Austria, the best model in Europe, are as follows:
- Set goals for reducing oil consumption in a region and create an “Energy Action Plan” and an “Energy Efficiency Strategy”
- Establish a “ Energy Agency” as an executive institution for energy policy
- Utilize construction projects of the local government for “research and development”, “technical development”, “accumulation of know-how”, and “training of regional industry”
- Promote the clusterization of renewable-energy industries in regions in order to achieve goals

Only some regions can create value chains that cover the entire renewable-energy industry. Except the regions, there are policies similar to those implemented in Tyrol and South Tyrol that promote the development of renewable-energy industries based on energy-saving architecture and energy-efficient technologies accessible to consumers.
We hope that construction/renovation projects of local governments will be utilized as R&D opportunities for related industries with considerations for the development of renewable-energy-related industries in the regions of Japan. If Japan promotes a global warming policy and the green-energy industries, we believe it is necessary to make efforts to establish Renewable Energy Centers that support regional clusters in each prefecture within a limited time frame to promote R&D in the field of renewable energy industries, which will be useful in the future, and to expand employment opportunities (refer to Chapter 3).

(3) Toward the promotion of health and wellness tourism
Tourism is a field in which it is possible to transfer various types of knowledge by exchanging experiences. Similarly, various products and services have been developed in the field of health and wellness tourism. However, such efforts will be limited to product development if not based on an understanding of the attractions of entire tourist sites, the conservation of environments, and town development based on such understanding. The natural environment and scenery, as well as the quality of townscapes, are essential conditions for establishing destinations for wellness and health tourism. That is, comprehension of the natural environment, the regional culture, sustainability, and health services will contribute to the potential competitiveness of the region. Clusters and networks for promoting cooperation with research and educational institutions, scientific research on local remedies, local production for local consumption, etc. provide the means for shaping and utilizing this competitiveness effectively to connect it the provision of wellness and health services.

The following is a summary of the challenges for promoting wellness tourism based on the above points (refer to Chapter 6):
1. True decentralization and independence of each region are important
2. Promoting interaction and cooperation among primary, secondary, and tertiary industries
3. Combining environment protection with tourism leads to regional development
4. The need to develop comprehensive products focused on town development
5. The need to establish educational institutions to improve the quality of wellness services and develop human resources
6. Maintaining support systems and networks for the development of wellness tourism clusters

Along with the “health business federation” concept of Niigata prefecture, various specific projects related to “health and wellness tourism” have been established through Japan. In terms of promoting health and wellness tourism as well as international tourism in Japan, the creation of collaborative projects between such leading regions and regions both in Japan and other countries is believed to be important for enhancing regional innovation and promoting international tourism.
In this study, we were provided invaluable advice and support from many people for the surveys conducted both in Japan and in other countries. We would like to express our thanks and our appreciation to the Research Institute for Hi-Life Foundation, who offered us an opportunity to conduct our research, as well as everyone at the head office.

Research team
Hirohisa Nakada, Yamanashi Research Institute Foundation (Chapters 2, 4, and 5)
Teruo Oda, Research Institute for Hi-Life (guest member) (Chapter 1)
Ryoichi Takeuchi, NPO Sustinable Society Promotion Center(Chapter 3)
Shinichi Sentouda, Research Institute for Hi-Life (Chapter 6)

Summary of surveys conducted and contributors
1. Lectures and seminars
･ Dr. Michihiko Ueda (Promotional organizations for private infrastructure ;Trends of wellness tourism: April 25, 2008)
･ Mr. Takeshi Magota (Iijima Research Institute, Ltd.; Trends of regional tourism industries: June 27)
･ Mr. Akihiro Furukawa (Health Tourism Institute: Current situation and subject of health tourism: July 11)

2. Investigations and hearing surveys in Japan
○ Kusatsu (May 22 & 23, 2008)
･ Mr. Yasuji Nakazawa (activities for Nakazawa Village and Hotel Village)
･ Mr. Eiji Nagai (Tourism and Commerce Section of Kusatsu; Use of the energy of hot springs)
○ Iwaki city (July 28)
･ Mr. Toshinobu Ooba (Iwaki-Yumoto Onsen Ryokan Association; Efforts of the Iwaki-Yumoto hot springs)
･ Mr. Yukio Sakamoto (Joban Kosan Co., Ltd.; Efforts of Spa Resort Hawaiian)
･ Mr. Hiroaki Kobayashi (Iwaki Chamber of Commerce and Industry; Industrial trends in Iwaki city)
･ Mr. Yoshitaka Ishibashi (Clean Coal Power R&D Co. Ltd.; Summary of demonstration experiments)
○ “Uonuma Conference” Health Business Summit in Niigata (November 14)

3. Overseas hearing surveys (September 1 to 16, 2008)
○ Austria
･ Mag. Ferdinand Thaler, Amt der Tiroler Landesregierung: Technology transfer policies
･ Mag. Robert Ranzi, Tiroler Zukunftsstiftung, Cluster Manager: Operation of clusters
･ Dr. Mag. Georg Goebel, Medizinische Universitat Innsbruck: Quality management for DOSTWELL
･ Mr. Josef Turtsher, Biosphareparkmanegement ,Grosses Walsertal
○ Italy (South Tyrol)
･ Mr. Guido Sandforth, TIS innovation park, Cluster Manager: Operation of clusters
○ Italy (Valle d’A osta)
･ Mr. Ducly Remo, Mayor, Comone di Chamois: Situation of Alpine Pearl
･ Mr. Cassiano Pascal, Mayor, Comune di La Salle, Legal representative of DOSTWELL
･ Prof. Corrado Oreiller, Fondazione per la Formazione Professionale Turistica
･ Ms. Federica Bieller, Terme Pre-Saint-Didier
･ Mr. Mauro Alliod,Region Autonome Vallee d’Aoste
･ Committee on Commerce and Industry of Valle d'Aosta, Saint Vincent town hall, Hotel Mont Blanc, Morgex Biomass boiler facility, etc.

4. Overseas research cooperation
･ Mr. Masaki Morass,Japan Tyrol Coordination(arrangements for research sites)
･ Ms.Versell Sera Miharu (interpreter)
･ Mr. Takeshi Sugiyama, Valle d’Aosta Tourism Bureau, Japan desk (arrangements for research sites)
･ Ms. Ikuko Sugiyama (interpreter)

Many Thanks

Mag.Ferdinand Thaler/Amt der Tiroler Landesregierung

Mag.Robert Ranzi/Tiroler Zukunftsstiftung

Dr.Mag.Georg Gobel/Medizinische Universitat Innsbruck

Mr.Guido Sandforth/TIS innovation park

Mr. Josef Turtsher/Biosphareparkmanegement

Mr.Ducly Remo/Mayor,Comone di Chamois

Mr.Cassiano Pascal/Mayor,Comune di La Salle

Mr.Mauro Alliod/Region Autonome Vallee d’Aoste