ABSTRACT
This chapter presents the line of inquiry in seeking to analyse the processes and the dynamics of cluster growth and the informal and formal institutions that promote clustering in Africa. It focuses on the role of institutions in promoting cluster growth with emphasis on the functions and effectiveness of technical, finance, marketing and training organizations in selected African countries. The chapter focuses on three central issues. The first is that Small and Medium Enterprises clusters suffer far more from financial, skills and technology market failures than large firms; therefore, progress up to higher trajectories of production and competition may be slow or impossible without special policy support. Second, clustering policies should be considered separately from the general macroeconomic instruments with emphasis on fiscal and general macroeconomic stability. Third, clusters differ significantly in their levels of development and for this reason the nature of support will differ across countries and clusters.
