Edited by David Smallbone, Friederike Welter and Mirela Xheneti
Chapter 9: Cluster development and cluster policies in EU border regions
A regional cluster (see Enright, 2000; 1996) is an industrial cluster in which member firms are in close geographical proximity to each other. The most general definition of an industry cluster is ‘geographical concentrations of industries that gain performance advantages through co-location’ (Doeringer and Terkla, 1995). These advantages include, for example, access to specialized human resources and suppliers, knowledge spillovers, pressure for higher performance in head-to-head competition, and learning from the close interaction with specialized customers and suppliers. Beyond the basic definition, however, there is little consensus on how to define an industry cluster. Clusters may differ in many dimensions: the type of products and services they produce, the locational dynamics they are subjected to, their stage of development, and the business environment that surrounds them, to name a few. A cluster is represented by a local production system that is embedded in a local social system. Each affects the ability of a cluster to produce synergy. The most effective clusters, which are animated or ‘working’, are relatively complete systems with specialized support and considerable social capital. Latent clusters may have the production system elements but lack the social system necessary to diffuse information and innovation and facilitate business deals. Potential clusters have incomplete production and social systems but have the basic ingredients to be developed as systems (Rosenfeld, 1997). Lastly, proponents of industry clusters claim that the clusters that include industries across several sectors are more adaptable to change, and can better withstand downturns in the economic cycle (Doeringer and Terkla, 1995; Rosenfeld, 1997).
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