Clusters, Convergence, and Economic Performance - NBER.
Industrial clusters are regarded as an interesting laboratory for economic research and a useful concept to guide industrial and labour-market policies. The indefiniteness of cluster boundaries generates interesting opportunities for empirical exploration, both from a geographical and an industry perspective, but the formulation of policy objectives may require constraining cluster definitions.
Clusters can create economic benefits (Porter, 2008), The benefits of a cluster can be classified into three dimensions. First, clusters increase productivity and efficiency. Companies gain efficient access to specialized inputs, services, employees, information, institutions, training programs, and other 'public goods' (local outsourcing) the coordination and transactions across firms are.
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Some clusters are located where they are for historical reasons. The case studies on the financial services sector in Leeds and on the North East of England Process Industry Cluster (NEPIC) organisation in the Tees Valley emphasised the important role of historical legacy and central organisation in the establishment of these clusters. These two case studies shed light on the benefits arising.
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Local clusters of high technology small businesses are of increasing interest to politician and academics. This papers draws on a study of 237 high tech small businesses located throughout the UK. Combining information on activity and location, firms were grouped according to their potential degree of embeddedness in local industrial clusters.
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