Clusters - Innovation: Management, Policy & Practice

Clusters: A Review of their basis and development in Australia

Ron Johnston
Executive Director, Australian Centre for Innovation & International Competitiveness Ltd (ACIIC), Faculty of Engineering, University of Sydney, NSW

PP: 380

Abstract

Clusters have become recognised as a potentially effective mechanism for enhancing competitive advantage, and governments around the world have sought to develop mechanisms to identify actual and potential clusters and to promote their formation and operation. Clusters enhance economic performance through increases in the productivity of member organisations, driving the pace and direction of innovation, stimulation of the formation of new businesses, and access to new knowledge and learning.

There are a variety of types of cluster; the most fundamental distinction is between trade-driven clusters, where the emphasis is on trade between the members of the cluster and on collaborating in pre-competitive activities, and knowledge-driven clusters, where the benefits are based on access to new knowledge emerging from research organisations, and knowledge held by other firms. On this basis, a typology of clusters has been developed.

It is evident from the many studies that clusters cannot be artificially 'manufactured'. However conditions can be established which facilitate the formation of clusters and their contribution to economic value.

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