chapter  10
12 Pages

The Contribution of the Micro-Cluster Approach

WithC. Michael Hall, Paul Lynch, Ewen J. Michael, Richard Mitchell

The proposition that has been explored here is that small-scale, complementary business activities enhance their own capacity to form a successful tourism destination, particularly in a domestic market, when they operate in a cluster formation (Michael, 2003). While the micro-clustering approach seems to have a particular relevance for the tourism industry, because its activities are generally location based and the level of commerce is derived from travel and visitation, it is an approach that may also have applications for many other communities seeking to specialise at a micro scale in other forms of industrial output. While there are many approaches that can be considered to support and sponsor local economic development in rural areas, the micro-cluster model implies that business firms and communities can work co-operatively to exploit the dynamics of complementary activity to capture economies-of-scope to add value to both the cluster members’ activities and to the local community’s economic welfare. Needless to say, successful clustering is possible only where the basket of activities that makes up the local product has been improved and the efficiency gains are captured by the operators and shared within the community. If those benefits are forthcoming, then an understanding of the forces that promote this clustering effect will also serve to enhance the capacity of economic and social policy to contribute to improving living standards in the appropriate local circumstances.