chapter  5
26 Pages

Enterprise clusters and regional specialization

Investigation of enterprise clusters opens a potentially large area of investigation. The term cluster has been applied to geographical scales ranging from part of a single urban economy to a group of neighbouring economies. The ‘new economic geography’, for example, relates clustering to the tendency for economic activity to concentrate in extensive metropolitan regions rather than to diffuse evenly across national economies (see Brakman et al. 2001). ‘Old’ economic geographers, on the other hand, are most likely to reserve the term for pockets of economic specialization within a city or shared among neighbouring settlements. At the extreme, they may even set uniform boundaries to distinguish clusters from other forms of concentration (May et al. 2001). In the context of a book that is concerned with local economic policy, this chapter is most aligned with the old geography interpretation of a business cluster. While new economic geography has played a signifi cant role in convincing policy makers that enterprise policy should include a spatial dimension, leading proponents recognize that their methods are still too abstract to yield policy guidance. As one prominent economic geographer has put it, this branch of economics is still in the Wright Brothers’ phase of learning to fl y (Fujita cited in Stelder 2002). In contrast, the old economic geography conception of clusters has been extensively promoted and highly infl uential within the fi eld of local economic policy. Indeed, encouraging business clusters in the sense of localized concentrations of enterprise specialization was one of the biggest ideas in local economic development to emerge in the fi nal decades prior to 2000 (Martin and Sunley 2003). This resulted in efforts by public agencies to increase awareness of the existence of business clusters (Department of Trade and Industry 2001) and in many industry-based projects to promote membership-based cluster groups (Sölvell et al. 2003).