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Industrial Clusters, Knowledge Integration and Performance
WHAT ARE INDUSTRIAL CLUSTERS?
During the 1990s the explosion of specialized and popular literature on industrial clusters gave them an unprecedented relevance across a range of areas, including business management and economic, political, public and social policy. There was also a degree of confusion over what the various authors mean––and do not mean––by industrial clusters. Our ?rst consideration therefore is terminology.
It is important to point out from the outset that we are not concerned here with the kinds of economic agglomerations found in large cities and urban developments of a certain size. As various authors have noted, large urban realities of necessity and almost inevitably provide opportunities for agglomerations of sorts to emerge, human ?rst, social and economic next (Gordon McCann, 2000). Indeed, it is obvious to those familiar with large cities and urban realities that economic interactions within these kinds of agglomerations are typically governed by the logic of large numbers and random events. But, two basic kinds of economic bene?ts that are important to our understanding of industrial clusters can also usually be found here.
On the one hand, large cities and similar agglomerations nurture urbanization economies––in other words, economic advantages that stem from factors or conditions that bene?t all economic entities and agents that are part of the agglomeration. For example, the impressive air transportation facilities and infrastructure of a city such as London, the strategic geographic location of Athens for west–east logistical links and the multiplicity of linguistic skills present in Singapore can lead to economic advantages that can be enjoyed by all entities located in––or near––these large cities.
On the other hand, urban agglomerations lead to localization economies of scale. These are specialized economic advantages stemming from close geographic proximity that bene?t spe
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