Cluster-Based Economic Strategy, Facilitation Policy and the Market Process

Posted: 4 Sep 2008

See all articles by Pierre Desrochers

Pierre Desrochers

University of Toronto - Department of Geography; PERC - Property and Environment Research Center

Frederic Sautet

The Catholic University of America (CUA) - Busch School of Business

Date Written: September 3, 2008

Abstract

The geographical concentration of related manufacturing and service firms is as old as economic development, but it has drawn renewed attention in the last two decades in the wake of the spectacular growth of a number of regional economies ranging from SiliconValley (South San Francisco Bay) to Italian rural manufacturing districts. While numerous policy prescriptions for regional growth that built on this phenomenon have been devised, none has enjoyed more popularity among policy makers than the "cluster" based economic development strategy put forward by Harvard Business School's Michael Porter. In Porter's views, clusters are made up of firms that are linked in some ways and that are geographically proximate. Upon closer examination, however, this concept turns out to be so fuzzy that it is now commonly used in a variety of ways by a wide array of academics, consultants and policy makers. It is further argued that the regional specialization strategy commonly associated with clusters makes regions more likely to experience economic downturns, prevents the spontaneous creation of inter-industry linkages and hampers the creation of new ideas and businesses.

Keywords: Michael Porter, cluster, industrial policy, industrial districts, regional development

JEL Classification: L52, O21, R58

Suggested Citation

Desrochers, Pierre and Sautet, Frederic E., Cluster-Based Economic Strategy, Facilitation Policy and the Market Process (September 3, 2008). Review of Austrian Economics, Vol. 17, Nos. 2-3, 2004, Available at SSRN: https://ssrn.com/abstract=1262944

Pierre Desrochers

University of Toronto - Department of Geography ( email )

Mississauga, Ontario
Canada
(905) 828-5206 (Phone)
(905) 828-5273 (Fax)

HOME PAGE: http://eratos.erin.utoronto.ca/desrochers/

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

Frederic E. Sautet (Contact Author)

The Catholic University of America (CUA) - Busch School of Business ( email )

Maloney Hall
620 Michigan Ave, NE
Washington, DC 20064
United States

HOME PAGE: http://business.cua.edu/faculty/sautet.cfm

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