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HBS→ISC→
Competitiveness & Economic DevelopmentCED
  • Competitiveness & Economic Development
  • Frameworks & Key Concepts
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Frameworks & Key Concepts
  • Frameworks & Key Concepts
  • Drivers of Competitiveness
  • The Diamond Model
  • Clusters
  • Stages of Development
  • Levels of Government
  • Economic Strategy
→Clusters
Competitiveness & Econom... → Frameworks & Key Concepts →
Clusters
×Frameworks & Key Concepts
  • Drivers of Competitiveness
  • The Diamond Model
  • Clusters
  • Stages of Development
  • Levels of Government
  • Economic Strategy

What Are Clusters?

Today’s economic map of the world is characterized by “clusters.” A cluster is a geographic concentration of related companies, organizations, and institutions in a particular field that can be present in a region, state, or nation. Clusters arise because they raise a company's productivity, which is influenced by local assets and the presence of like firms, institutions, and infrastructure that surround it.

Key Concepts

Clusters increase productivity and operational efficiency.

 
 

Clusters stimulate and enable innovation.

 

Clusters facilitate commercialization and new business formation.

 

Building & Upgrading Clusters

Tourism Cluster in Cairns, Australia

 

In Cairn, this cluster (a group of interrelated businesses and institutions) was built around the Great Barrier Reef. Other examples of clusters include the Italian Footwear and Fashion Cluster, the California Wine Cluster, and the Silicon Valley Technology Cluster.

 

Cluster Initiatives

Cluster development initiatives are an important new direction in economic policy. Building on past efforts in macroeconomic stabilization, privatization, market opening, and reducing the costs of doing business, clusters can enhance competitiveness in today’s increasingly complex, knowledge-based, and dynamic economy.

As part of its long-running Cluster Mapping Project, the Institute is building a registry of U.S. cluster initiatives.  A similar effort is housed at the European Cluster Observatory.

The U.S. Cluster Mapping Project

The U.S. Cluster Mapping Project provides policy makers, economic development practitioners, and researchers with powerful data and tools to understand clusters and locate cluster initiatives and potential partners throughout the U.S.

Explore U.S. Cluster Data

The EUROPEAN CLUSTER OBSERVATORY

The European Cluster Observatory provides data and analysis of clusters, cluster organizations and regional microeconomic framework conditions in Europe. Furthermore it provides a cluster library, and a classroom for cluster education.

Visit the EU Cluster Observatory

 

Related Resources

 
  • 01 June 2006
  • HBS Case Collection

MassMEDIC: The Massachusetts Medical Device Industry Council

by Willis M. Emmons III, Michael E. Porter and Spencer Wallace
 
  • 04 May 2012
  • HBS student project

Tennessee Music Cluster

by Megan Bernard, Ravi Shankar Chaturvedi, Andrea Hill, Clara Maddox and Matt Schrimpf
 
  • 14 Feb 2012

New Jersey Life Science Super-Cluster Initiative

by Michael Porter & Monitor Group
 
 

View All Related Resources

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