Rethinking cluster initiatives

Industry clusters—groups of firms that gain a competitive advantage through local proximity and interdependence—offer a compelling framework for local and state leaders to analyze and support their economies. Both theory and academic research suggest that firms and regions benefit from clustering, evidence that has led to widespread adoption of clusters within the economic development field. But there are glaring gaps between the recognition that clusters play an important role in an economy that demands concentration and specialization and the practical ability to develop initiatives that help firms within clusters become more competitive and spur growth.

The purpose of this paper is to help regional leaders focused on economic development confidently and knowledgeably embrace cluster initiatives where they make sense, and, where they do not make sense, recognize that there are potentially equally powerful alternatives. This paper draws on a literature review, interviews with cluster experts, and five in-depth case studies that reflect successful, if not exceptional, cluster initiatives. 

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