Cluster development
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Cluster development (or cluster initiative or economic clustering) is the
economic development In economics, economic development (or economic and social development) is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and object ...
of
business cluster A business cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field. Clusters are considered to increase the productivity with which companies can compete, nationally and gl ...
s. The cluster concept has rapidly attracted attention from governments,
consultants A consultant (from "to deliberate") is a professional (also known as ''expert'', ''specialist'', see variations of meaning below) who provides advice or services in an area of specialization (generally to medium or large-size corporations). Cons ...
, and
academics Academic means of or related to an academy, an institution learning. Academic or academics may also refer to: * Academic staff, or faculty, teachers or research staff * school of philosophers associated with the Platonic Academy in ancient Greece ...
since it was first proposed in 1990 by
Michael Porter Michael Eugene Porter (born May 23, 1947) is an American businessman and professor at Harvard Business School. He was one of the founders of the consulting firm The Monitor Group (now part of Deloitte) and FSG, a social impact consultancy. ...
.


Clusters

One of the most well-known clusters is the California Wine Cluster. It is a mass of interrelated businesses including, but not limited to commercial wineries, independent wine grape growers, suppliers of grape stock, irrigation, and harvesting equipment, barrels and labels, public relations and advertising agencies, and publication firms involved with consumer and trade audiences. Another example is the Italian Leather Fashion Cluster. Like the California Wine Cluster, this also includes an array of interrelated businesses including world-famous brands Ferragamo and Gucci. Several chain industries make up this cluster including leather goods producers (clothing, belts, footwear, handbags), specialized services for machineries, design service, tanneries, plastic working equipment, and specialized machine tools. Clusters, developed around a core city, factor in significant spillover and multiplier effects of urban development such as spatial distribution, connectivity, productivity, industrial linkages, and competitiveness. Many governments and industry organizations around the globe have turned to this concept in recent years as a means to stimulate urban and rural economic growth. As a result, a large number of cluster initiative organizations were started during the 1990s, and the trend continues. The first comprehensive study of cluster initiatives around the world was reported in the " Cluster Initiative Greenbook" published by Örjan Sölvell, Christian Ketels and Göran Lindqvist, with a foreword by
Michael Porter Michael Eugene Porter (born May 23, 1947) is an American businessman and professor at Harvard Business School. He was one of the founders of the consulting firm The Monitor Group (now part of Deloitte) and FSG, a social impact consultancy. ...
. The report was presented at the annual meeting of The Competitiveness Institute, TCI, in Gothenburg in 2003. A follow-up study in 2005 covered more than 1400 cluster initiative organizations around the globe. In 2013, a decade after the first Greenbook, The Greenbook 2.0 was launched at the TCI global conference in Kolding, Denmark. While the purpose of cluster initiative organizations is to promote economic development within the cluster by improving the competitiveness of one or several specific business sectors, it is important to differentiate these public-private organizations from policy-making organizations at different levels, e.g., national government units such as the UK Department of Trade and Industry (DTI), and supranational bodies such as the
OECD The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an international organization, intergovernmental organization with 38 member countries, founded in 1961 to stimulate economic progress and international trade, wor ...
and the
European Commission The European Commission (EC) is the primary Executive (government), executive arm of the European Union (EU). It operates as a cabinet government, with a number of European Commissioner, members of the Commission (directorial system, informall ...
and from industry associations comprising firms within one business sector, e.g., biotech, steel. More specifically, cluster initiatives are organizations or
projects A project is a type of assignment, typically involving research or design, that is carefully planned to achieve a specific objective. An alternative view sees a project managerially as a sequence of events: a "set of interrelated tasks to be ...
that are organized as collaborations between a diverse number of public and private sector actors, such as firms, government agencies, and academic institutions. Whereas lobbying policymakers may be one of the cluster initiative's activities, cluster initiatives generally are involved in a broad range of activities, e.g., supply-chain development,
market intelligence Market intelligence (MI) is gathering and analyzing information relevant to a company's market - trends, competitor and customer (existing, lost and targeted) monitoring. It is a subtype of competitive intelligence (CI), which is data and inf ...
, incubator services, attraction of
foreign direct investment A foreign direct investment (FDI) is an ownership stake in a company, made by a foreign investor, company, or government from another country. More specifically, it describes a controlling ownership an asset in one country by an entity based i ...
, management training, joint R&D projects, marketing of the region, and setting technical standards. In June 2007, the European Cluster Observatory was launched. Financed by the European Commission DG Enterprise and Industry, it provides information about clusters, cluster initiatives, and cluster policy throughout 32 European countries. An example of a business cluster from the United Kingdom is the
Northeast of England Process Industry Cluster The North East of England Process Industry Cluster (NEPIC) is an economic cluster developed in accordance with Michael Porter's theories and strategies regarding industrial clusters. The chemistry-using sectors in North East England, where mor ...
(NEPIC). Information on this cluster and other European Clusters can be found on the European Cluster Observatory. In 2009, under the Competitiveness and Innovation programme, the European Commission launched the European Cluster Excellence Programme from which the European Secretariat for Cluster Analysis (ESCA) was established. ESCA has since worked to spread best practice and improve the professionalism of Cluster managers across Europe by benchmarking, advising on best practice, analysing and accrediting Cluster organisations across the EU. ESCA's work has now extended beyond the borders of the EU including North America and Asia. By October 2014 ESCA had analysed 610 cluster organisations in 35 countries leading to Bronze level labelling. By October 45 Clusters have been awarded the Gold Label. An example of an ESCA Gold label Cluster is the
North East of England Process Industry Cluster The North East of England Process Industry Cluster (NEPIC) is an economic cluster developed in accordance with Michael Porter's theories and strategies regarding industrial clusters. The chemistry-using sectors in North East England, where mor ...
(NEPIC). The concept of cluster has reached and gained the attention of other parts of the globe following its success in Europe. For South Asia to become a leading economic power, development of its cities as prospective centers of growth and dynamism holds great promise. By being centers of economic activity, urban clusters both define and influence the economic geography of countries and regions.


See also

*
Innovation system The concept of the innovation system stresses that the flow of technology and information among people, enterprises, and institutions is key to an innovative process. It contains the interactions between the actors needed in order to turn an idea in ...
*
Northeast of England Process Industry Cluster The North East of England Process Industry Cluster (NEPIC) is an economic cluster developed in accordance with Michael Porter's theories and strategies regarding industrial clusters. The chemistry-using sectors in North East England, where mor ...
* Village Earth Cluster Development Approach


References

* * {{cite book , date=2009 , title=Clusters for Competitiveness: A Practical Guide & Policy Implications for Developing Cluster Initiatives, publisher=The World Bank *Silvestre, B. S. (2006) Aglomeracao Industrial de Petroleo e Gas da Regiao Produtora da Bacia de Campos: Conexoes de Conhecimento e Posturas Tecnologicas das Firmas. Ph.D. Thesis, Department of Industrial Engineering — DEI, PUC-Rio. * Silvestre, B. S., Dalcol, P. R. T. (2009) Geographical proximity and innovation: Evidences from the Campos Basin oil & gas industrial agglomeration — Brazil. Technovation, Vol. 29 (8), pp. 546–561. * Solvell, O
Clusters - Balancing Evolutionary and Constructive Forces
2009. * Solvell, O, Lindqvist, G, & Ketels, C

2003. * Lindqvist, G, & Ketels, C, Sölvell Ö (2013) The Cluster Initiative Greenbook 2.

* Teigland, R, & Lindqvist, G
Seeing Eye-to-Eye: How Do Public and Private Sector Views Differ of a Biotech Cluster and its Cluster Initiative?
''European Planning Studies'', Forthcoming. * Teigland, R, Hallencreutz, D, & Lundequist, P
Uppsala BIO–the Life Science Initiative: Experiences of and Reflections on Starting a Regional Competitiveness Initiative
2005.


External links


The European Cluster Observatory

Development of Clusters and Networks of SMEs (pdf)




* ttps://insights.youthforindia.org/a-cluster-development-programme Cluster development programme
The Center for Strategy and Competitiveness at the Stockholm School of Economics


Economic geography Strategic management Michael Porter