Abstract
The geographical concentration of related manufacturing and service firms is as old as economic development, but it has drawn renewed attention in the last two decades in the wake of the spectacular growth of a number of regional economies ranging from Silicon Valley (South San Francisco Bay) to Italian rural manufacturing districts. While numerous policy prescriptions for regional growth that built on this phenomenon have been devised, none has enjoyed more popularity among policy makers than the “cluster” based economic development strategy put forward by Harvard Business School's Michael Porter. In Porter's views, clusters are made up of firms that are linked in some ways and that are geographically proximate. Upon closer examination, however, this concept turns out to be so fuzzy that it is now commonly used in a variety of ways by a wide array of academics, consultants and policy makers. It is further argued that the regional specialization strategy commonly associated with clusters makes regions more likely to experience economic downturns, prevents the spontaneous creation of inter-industry linkages and hampers the creation of new ideas and businesses.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Bergman, E. M. and Feser, E. J. (1999) “Industrial and Regional Clusters: Concepts and Comparative Applications.” In: Jackson, R. W. (Ed.) The Web Book of Regional Science, Regional Research Institute, West Virginia University, (http://www.rri.wvu.edu/WebBook/Bergman-Feser/contents.htm).
Buss, T. F. (1999) “The Case Against Targeted Industry Strategies.” Economic Development Quarterly, 13(4): 339-356.
Capello, R. (2002) “Entrepreneurship and Spatial Externalities: Theory and Measurement.” The Annals of Regional Science, 36(3): 387-402.
Chiu, A. S. (2002) “Ecology, Systems, and Networking.Walking the Talk in Asia.” Journal of Industrial Ecology, 5(2): 6-8.
Desrochers, P. (1998) “A Geographical Perspective on Austrian Economic.” Quarterly Journal of Austrian Economics, 1(2): 63-83.
Desrochers, P. (2000) “Geographical Proximity and the Transmission of Tacit Knowledge.” Review of Austrian Economics, 14(1): 25-46.
Desrochers, P. (2001a) “Local Diversity, Human Creativity and Technological Innovation.” Growth and Change, 32(3): 369-394.
Desrochers, P. (2001b) “Cities and Industrial Symbiosis: Some Historical Perspective and Policy Implications.” Journal of Industrial Ecology, 5(4): 29-44.
Desrochers, P. (2002) “Regional Development and Inter-Industry Recycling Linkages: Some Historical Perspective.” Entrepreneurship and Regional Development, 14(1): 49-65.
Duranton, G. and Puga, D. (2000) “Diversity and Specialisation in Cities: Why, Where and When Does it Matter?” Urban Studies, 37(3): 533-555.
Feldman, M. (2000) “Location and Innovation: The New Economic Geography of Innovation, Spillovers and Agglomeration.” In: Clark, G. L., Feldman, M. P., and Gertler, M. S. (Eds.) Oxford Handbook of Economic Geography, pp. 373-394. Oxford: Oxford University Press.
Ferguson, R. (1995) Panacea or Let-Down? Science Parks in the Literature. The Small Business Research Group, Swedish University of Agricultural Sciences, August (http://www.ekon.slu.se/~richardf/scipklit/scipklit.html).
Griliches, Z. (1990) “Patent Statistics as Economic Indicator: A Survey.” Journal of Economic Literature, 28(12): 1661-1707.
Harrison, B. (1992) “Industrial Districts: Old Wine in New Bottles?” Regional Studies, 26(5): 469-483.
Hayek, F. (1948) Individualism and Economic Order. Chicago: University of Chicago Press.
Hoffman, W. (2001) “Professor Porter Goes to Washington.” The Doric Column, Dec. 31 (http://mbbnet.umn.edu/doric/michaelporter.html).
Jacobs, J. (1961) The Death and Life of Great American Cities. New York: Random House.
Jacobs, J. (1969) The Economy of Cities. New York: Random House.
Kealey, T. (1997) The Economic Laws of Scientific Research. New York: St Martin's Press.
Kirzner, I. M. (1979) “The Perils of Regulation: A Market-Process Approach.” Reprinted in Kirzner, I. M. (1985) Discovery and the Capitalist Process. Chicago: University of Chicago Press.
Lagendijk, A. and Cornford, J. (2000). “Regional Institutions and Knowledge—Tracking New Forms of Regional Development Policy.” Geoforum, 31: 209-218.
Macdonald, S. (1992) “Formal Collaboration and Informal Information Flow.” International Journal of Technology Management, 7(1/2/3): 49-60.
Marshall, A. (1920) Principles of Economics, 8th edition. London: MacMillan.
Martin, R. and P. Sunley (2003) “Deconstructing Clusters: Chaotic Concept or Policy Panacea?” Journal of Economic Geography, 3(1): 5-35.
Maskell, P. and Malmberg, A. (1999) “Localised Learning and Industrial Competitiveness.” Cambridge Journal of Economics, 23: 167-185.
Massey, D., Quintas, P. and Wield D. (1992) High Tech Fantasies, Science Parks in Society, Science and Space. London: Routledge.
Miller, R. and Côté, M. (1985) “Growing the Next Silicon Valley.” Harvard Business Review, July/August: 114-123.
Norton, R. D. (1999) “Cluster Theories(1): Spatial Externalities.” In: Jackson, R. W. (Ed.) The Web Book of Regional Science, Regional Research Institute, West Virginia University (http://www.rri.wvu.edu/WebBook/Norton/nortonupdate/neoflows1.htm).
Porter, M. (1990) The Competitive Advantage of Nations. London: Macmillan.
Porter, M. (1998) “Location, Clusters and the “New” Microeconomics of Competition.” Business Economics, 33(1): 7-17.
Porter, M. (2000a) “Location, Competition, and Economic Development: Local Clusters in a Global Economy.” Economic Development Quarterly, 14(1): 15-34.
Porter, M. (2000b) “Location, Clusters and Company Strategy.” In: Clark, G. L., Gertler, M. S., and Feldman, M. P. (Eds.) The Oxford Handbook of Economic Geography, pp. 253-274. New York: Oxford University Press.
Porter, M., Takeuchi, H., and Sakakibara, M. (2000c) Can Japan Compete? Cambridge, MA: Perseus Publishing.
Rosenberg, N. (1982). Inside the Black Box: Technology and Economics. Cambridge: Cambridge University Press.
Rosenfeld, S. (2001) “Backing into Clusters: Retrofitting Public Policies.” Paper presented at the Integration Pressures: Lessons from Around the World, John F. Kennedy School Symposium, Harvard University, March 29–30 (http://www.rtsinc.org/publications/Harvard4%20doc%20copy.pdf).
Sautet, F. (2002a) Economic Transformation, The Pretence of Knowledge and the Process of Entrepreneurial Competition. New Zealand Treasury Discussion Paper (http://www.treasury.govt.nz/et/#9).
Sautet, F. (2002b) “Kirznerian Economics: Some Policy Implications and Issues.” Journal des Economistes et des Etudes Humaines, 1(12): 131-51.
Schmookler, J. (1966). Invention and Growth. Cambridge: Harvard University Press.
Shearmur, R and Doloreux, D. (2000) “Science Parks: Actors or Reactors? Canadian Science Parks in their Urban Context.” Environment and Planning A, 32: 1065-1082.
Siegel, P. B., Johnson, T. G., and Alwang, J. (1995) “Regional Economic Diversity and Diversification: Seeking a Framework for Analysis.” Growth and Change, 26(2): 261-284.
Smith, A. (1776 [1976]). An Inquiry into the Nature and Causes of the Wealth of Nations. Oxford: Clarendon Press (General editors Campbell R. H. and Skinner A. S. Textual editor W. B. Todd).
Waits, M. J. (2000) “The Added Value of the Industry Cluster Approach to Economic Analysis, Strategy Development, and Service Delivery.” Economic Development Quarterly, 14(1):35-50.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Desrochers, P., Sautet, F. Cluster-Based Economic Strategy, Facilitation Policy and the Market Process. The Review of Austrian Economics 17, 233–245 (2004). https://doi.org/10.1023/B:RAEC.0000026833.26220.2d
Issue Date:
DOI: https://doi.org/10.1023/B:RAEC.0000026833.26220.2d