Cluster development
Encyclopedia
Cluster development is the economic development
of business cluster
s. The cluster concept has rapidly attracted attention from governments, consultants, and academics since it was first proposed in 1990 by Michael Porter
. Many governments and industry organizations across the globe have turned to this concept in recent years as a means to stimulate urban and regional 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
. 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 across the globe.
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 and the European Commission
and from industry associations comprising firms within one business sector, e.g., biotech, steel.
More specifically, cluster initiatives are organizations or projects 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, incubator
services, attraction of foreign direct investment
, 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.
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
of business cluster
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 globally. In urban studies, the term agglomeration is used...
s. The cluster concept has rapidly attracted attention from governments, consultants, and academics since it was first proposed in 1990 by Michael Porter
Michael Porter
Michael Eugene Porter is the Bishop William Lawrence University Professor at Harvard Business School. He is a leading authority on company strategy and the competitiveness of nations and regions. Michael Porter’s work is recognized in many governments, corporations and academic circles globally...
. Many governments and industry organizations across the globe have turned to this concept in recent years as a means to stimulate urban and regional 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 Porter
Michael Eugene Porter is the Bishop William Lawrence University Professor at Harvard Business School. He is a leading authority on company strategy and the competitiveness of nations and regions. Michael Porter’s work is recognized in many governments, corporations and academic circles globally...
. 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 across the globe.
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 and the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
and from industry associations comprising firms within one business sector, e.g., biotech, steel.
More specifically, cluster initiatives are organizations or projects 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, incubator
Business incubator
Business incubators are programs designed to accelerate the successful development of entrepreneurial companies through an array of business support resources and services, developed and orchestrated by incubator management and offered both in the incubator and through its network of contacts...
services, attraction of foreign direct investment
Foreign direct investment
Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...
, management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
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)
Directorate-General for Enterprise and Industry (European Commission)
The Directorate-General for Enterprise and Industry is a Directorate-General of the European Commission. The Enterprise Directorate-General works on creating an environment in which European firms can thrive...
, it provides information about clusters, cluster initiatives, and cluster policy throughout 32 European countries.
External links
- The European Cluster Observatory
- Development of Clusters and Networks of SMEs (pdf)
- Sector (and Business Cluster) Development, The World Bank
- Clusters and Cluster Development, The Institute for Strategy and Competitiveness at Harvard Business School
- The Center for Strategy and Competitiveness at the Stockholm School of Economics
- UNIDO Cluster Development in Pakistan
- Village Earth Cluster Development ApproachVillage EarthVillage Earth: The Consortium for Sustainable Village-Based Development DBA: Village Earth is a publicly supported 501 non-profit, non-governmental organization based in Fort Collins, Colorado...