chapter  3
12 Pages

Development and Cluster Theory

WithEwen J. Michael

The intuitive value that stems from the clustering approach is that it suggests a policy tool or mechanism as an option for accelerating growth. The Porterian model relies on the conventional notion that a co-location of like industries in a geographic concentration can

tproduce multiplier effects (economic) and consequent social impacts (externalities), bu adds to the argument by noting that the rate of regional growth may be accelerated by the co-location of symbiotic industries. The additional step identified in Porter’s argument is important, for those policies that foster mere competition through location concentration (if effective at all) lead only to marginal economic gains based on economies-of-scale, while those cluster formations that actually generate an interactive synthesis between firms can lead to a cumulative gain in benefits — most obviously in the form of both increased output and lower cost structures. In this approach, the rate of regional growth can accelerate as new symbiotic industries are drawn in to share those benefits.