This chapter examines and demonstrates superior regional innovation policy making based on non-linear, lateral and interactive governance. The first section introduces basic concepts of resilience, modeled on its original application in understanding ecosystem behavior under stress, translated into a more suitable economic geography context. There follows a worked, theoretically derived application of resilience theory to qualitative case analyses of responses to resilience shock by regions in Portugal. Here, severe economic crisis was the test of resilience. Innovative adaptability, emphasizing transversality, not particularity, tended to predominate. In conclusion, it is shown how, by exploration of regional and inter-regional “transversality,” these regions avoided “global controller” (EU) advocacy of demonstrably reckless “specialization.” This was achieved in the face of imposed austerity policies from EU and national state in response to the global financial crash of 2008 as it affected the fate of their Regional Innovation Strategies (RIS3).

This chapter takes the bankruptcy in 2012 of the leading cluster-building consultancy firm Monitor, founded by academic business guru Michael Porter, as a significant inflection point in the trajectory of clusters as a panacea for local and regional economic development policy. The origins of the ‘cluster craze’ are shown to lie in the marketing of a kind of discourse or narrative by Monitor and numerous smaller outfits to the effect that cluster-building was easy because they actually existed and in studying them academics and consultants had found their secret ingredients. For sometimes astonishingly high fees, these secrets would in turn be divulged. Normally missing from such portfolios were social anthropologies of the actual mechanisms by which thriving clusters (or their predecessors, ‘industrial districts’) succeeded while others failed. Rather, economists relied on concentration indices, assuming that proximity in econometric space was the main ingredient. In the first main section, the ‘cluster idea’ is reviewed and attention drawn to flawed policy practices relying on the ‘discourse’ approach to cluster-building. This is contrasted with growth performance in clusters that exist materially. The performance of the latter is found to be superior. Next, the undermining of the cluster narrative by critique of the poor definitions, methodologies and actual performance of policy-induced clusters is narrated, illustrated with a particularly severe critique by The Economist. Attention is then re-focused away from the ‘discursive’ approach towards the material one, and an analysis is provided of processes of cluster evolution following divergent pathways in search of ‘platform’ variety. The argument for the demise of cluster-thinking and promotion, but clustering’s absorption, in reality, into path inter-dependent and diversifying evolution is reiterated in the conclusions. These caution against contemporary and pervasive policy advocacy of specialization-driven economic development of any kind.