Michael E. Porter is the Bishop William Lawrence University Professor at The Institute for Strategy and Competitiveness, based at the Harvard Business School.
What are clusters
Clusters are geographic
concentrations of firms and organisations working in related activities. They
have been defined by Porter (1998) as geographic concentrations of
interconnected companies, specialized suppliers, service providers, firms in
related industries and associated institutions in particular fields that compete but
also co-operate. They are often rooted in a single locality, but their
boundaries will not always correspond to local administrative areas. They
exists across the full array of tradable sectors although they often do not
correspond to a single manufacturing or service sector as recorded by standard
industrial classification.
Clusters Dynamics | Click on the image to watch the video
Cluster Policy | Click on the image to watch the video
Cluster Management 1 | Click on the image to watch the video
Cluster Management 2 | Click on the image to watch the video
Clusters
versus Networks Characteristics
Networks
|
Clusters
|
Networks
allow firms access to specialised services at lower costs
|
Clusters
attract needed specialised services to a region
|
Networks
have restricted membership
|
Clusters
have open membership
|
Networks
are based on contractual agreement
|
Clusters
are based on social values that foster trust and encourage reciprocity
|
Networks
make it easier for firms to make complex products
|
Clusters
generate demand for other firms with a variety of similar and related
capacities
|
Networks
are based on cooperation
|
Clusters
take both cooperation and competition
|
Networks
have common business goals
|
Clusters
have collective visions
|
Source: Small Business Clustering: Accessing Knowledge through Local Networks / Dr Patrice Braun / Pam McRae-Williams / Professor Julian Lowe / Centre for Regional Innovation and Competitiveness / University of Ballarat, Australia
Michael Porter:
"Reshaping Regional Economic Development: Clusters and Regional
Strategy" (form 2: 50)
Cluster benefits
Encouraging entrepreneurship
- Supporting spin-outs
- Leading a transition to the entrepreneurial university
- Supporting the launch and growth of start-ups
Stimulating innovation and collaboration
- Fostering SME-research collaboration
- Encouraging collaboration: within the cluster and between clusters
- Encouraging enterprise networks
- Better marketing of products
Coordinating public human capital
- Strengthening public-public and public-private partnerships
- Encouraging evolution in cluster activities
Ensuring quality human capital
- Updating education and training to meet the requirements of the cluster
- Ensuring availability of talent locally
- Ensuring the appeal of the area and a good quality of life
Facilitating access to financing
- Encouraging private investment
- Facilitating access to public funding
- Creating forums to seek financing
Reducing congestion and social division
- Addressing congestion and inequalities resulting from the emergence of the cluster
- Creating mechanisms to inform the community about the activities of the cluster
Source: Clusters, Innovation & Entrepreneurship, edited by Jonathan Potter & Gabriela Miranda
Clusters: Powerful engines of economic development in Europe - business planet
The clusters concept | India example
The cluster in Lerida
helping to boost international sales - business planet
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