What Is a Cluster?

A cluster is a group of companies sharing local resources, using similar technologies, and forming linkages and alliances. These linkages can take the form of buyer-supplier relationships, turnover and "pirating" of employees, joint marketing, training, or research initiatives, associations, and lobbying. One of the unique features of cluster analysis is the focus on linkages between firms, and on implications for shared strategies – often called "Co-opetition" – in which companies selectively compete in some respects (say, in output markets) yet cooperate in other respects (say joint training programs).

Regional Goals

The most successful clusters are not only characterized by strong linkages between firms, but also between the private sector firms and the mainly public-sector providers of important local sources of competitive advantage - schools, universities, research centers, venture capitalists and regulators. Thus regions that have mastered the art of public/private collaboration are more likely to be attracting and growing dynamic, competitive clusters.

A key strength of ECG is its experience in bringing together private and public stakeholders in a proven "working group" process to develop cluster strategies. Collaborative problem-solving, we have found, is the only way to develop and effectively implement regional competitiveness strategies. ECG does not stop at analysis and recommendation. ECG examines the vital inter-industry linkages that characterize successful economies, and pioneers new methods for strengthening those linkages.

The Emergence of Clusters
In advanced economies today, clusters of related industries, are the most sustainable source of jobs, income and export growth.

Stages in the Evolution of Competitive Clusters
A competitiveness analysis examines a region's industry clusters, economic infrastructure, market dynamics and policy climate. Strategies to grow and transform clusters evolve through a process of evolving cluster linkages, focused business development, economic infrastructure improvements, and helping firms in clusters to improve penetration of export markets.

"Seeing a group of companies and institutions as a cluster also highlights opportunities for coordination and mutual improvement in areas of common concern with less of a risk of distorting competition or limiting the intensity of rivalry."

Professor Michael Porter, Harvard Business School
Location, Competition, and Economic Development; Local Clusters in a Global Economy; "Economic Development Quarterly"; February 2000

Click Here to See How We Utilize Collaborative Strategy >>