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Central Asian Problems of Modern Science and Education

Article Title

LOCAL CLUSTERS IN A GLOBAL ECONOMY

Abstract

Economic geography during an era of global competition involves a paradox. It is widely recognized that changes in technology and competition have diminished many of the traditional roles of location. Yet clusters, or geographic concentrations of interconnected companies, are a striking feature of virtually every national, regional, state, and even metropolitan economy, especially in more advanced nations. The prevalence of clusters reveals important insights about the microeconomics of competition and the role of location in competitive advantage. Even as old reasons for clustering have diminished in importance with globalization, new influences of clusters on competition have taken on growing importance in an increasingly complex, knowledge-based, and dynamic economy. Clusters represent a new way of thinking about national, state, and local economies, and they necessitate new roles for companies, government, and other institutions in enhancing competitiveness. Resources, capital, technology, and other inputs can be efficiently sourced in global markets.

First Page

241

Last Page

252

References

1.For a recent example, see Cairncross (1997). 2.For a more extensive treatment, see Porter (1998a), which also contains an extensive bibliography on clusters and cluster initiatives. 3. For company and institutional implications, see Porter (1998a). 4.Readers can find a full treatment of the intellectual roots of cluster thinking in Porter (1998a). 5. Enright (1993) illustrates the varying geographic scope of clusters. 6. Overly restrictive or overly extensive definitions of clusters can obscure the influence of clustering and lead to flawed statistical results. For example, Suarez-Villa and Walrod (1997) state, "An establishment located in a cluster was, at most, within one quarter of a mile of the nearest one" (p. 1349). A more appropriate boundary in the field investigated probably is location within the same metropolitanarea, so it is not surprising that the authors' statistical tests do not reveal the benefits of clustering. 7. The same issues apply to cities, states, or regions within nations. This discussion will be primarily set at the level of the nation, although internal specialization and trade among states within larger nations prove to he an important determinant of prosperity. 8.See Porter (1990), especially chapters 3 and 4. 9.A specific finding about the role of clusters in economic development is that the quantity of local suppliers and especially local supplier quality both matter. 10.Many cluster advantages also apply to subunits within firms such as research and development (R&D) and production.

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