Over the last twenty years, for industrialists, policymakers and members of the public alike, Silicon Valley has come to epitomize the powerful, beneficial effects of industrial clustering. The success of Silicon Valley, even as globalization has continued to advance, has led to many attempts to generate or encourage clustering in many different sectors and countries. Using a single industry/sector case-study across multiple locations answer all of the following questions (maximum marks out of 100 for each question indicated)
1. Outline and evaluate both the forces that promote clustering and the economic effects that flow from it? Conduct this analysis with specific reference to your chosen industry sector.
2. How can we explain the co-existence of increasing globalization and increasing clustering?
3. What evidence is there for significant clustering in your chosen industry sector? How can we explain the specific locations of any identified clusters?
4. What evidence is there that governments have been able to deliberately foster clustering in your chosen industry sector? What policies have they employed and how successful have they been?
“Clustering and Competition”- the two key words have become an integral part of almost every multinational firm’s vocabulary today. Largely both these are interrelated and to some extent, the success of one depends upon the other. Competitive success in today’s world is determined by a balanced blend of knowledge, skill and innovation. Clustering happens to be a vital aspect of these firms, which are looking to leverage these three aspects in order to increase effectiveness.
Michael Porter (1998, pp.197-8) defines clustering as “Geographic concentrations of interconnected companies, specialised suppliers, services providers, firms in related industries, training institutions and support organisations linked around as technology or end product within a local area or region”. Clusters, therefore may be...