Since the concept was first popularized in the early 1990’s, much has been written about the case for using business cluster development as a tool for government or public-private partnerships to help overcome the “innovation-adoption paradox.”  The existing models for economic cluster development vary widely across the nation.  Many areas have created mechanisms for convening existing and aspiring business leaders.  Some have structures for collective policy advocacy.  A few have nascent programs to create business incubators or match specific existing businesses to potential demand opportunities.   None appear to have yet developed a comprehensive long-term model that also accelerates technology innovation and business growth by increasing the actual “demand” for these innovations and reducing the barriers to accessing “supply.”

Rather than supporting individual enterprises or specific technologies, this concept of “demand-driven innovation” looks at the market in an economic region as a system. It then identifies opportunities to better connect “market supply and demand” and remove policy barriers to innovation.   Crafting and implementing such holistic strategies requires the coordinated activity of stakeholders in the clean energy and related innovations sectors, large corporations and institutions, government and regulatory agencies, and civil society.  To date there have been few economic clusters where all of the necessary constituencies have a major presence, an institutionalized framework for their interaction and collaboration, and an alignment of their immediate interests necessary to work together for common purpose.  Until now.

This paper will explore potentially replicable models for utilizing “demand-driven innovation” strategies to scale cluster growth and overcome the innovation-adoption paradox.   It will

• Analyze and refine the “demand-driven innovation” hypothesis for cluster development
• Construct a proposed organizational model for CalCEF Catalyst, a 501(c)(6) trade association, which will serve as a flexible platform for the sustained engagement and collective action of clean energy business leaders and other stakeholders.
• Define the structure, scope, and priority initiatives of its initial application, “CleanTech SF”, an innovative public private partnership with the City of San Francisco designed to accelerate innovation, the adoption of new technologies, and business growth in the economic cluster.