Entrepreneurship and Development: The Role of Clusters

Abstract

Defining entrepreneurship as the creation of new organisations, this paper explores, from a literature review standpoint, the moderating effect of clusters on the impact of entrepreneurship on development. To identify potential causes of this moderating effect, the paper focuses on three different impacts: entrepreneurship on development, clusters on development, and clusters on entrepreneurship. The findings of the paper are threefold. First, entrepreneurship is positively associated with economic growth. Given the importance of entrepreneurship in changing the economic and social structure of the economy, more research on the impact of entrepreneurship on development – i.e. focus on capabilities rather than on output – is needed. Second, it is difficult to reach empirical generalisations on the impact of clusters on development and entrepreneurship given conceptual and methodological constraints. Both positive results and caveats are found at different levels of analysis and at different stages of development of a cluster. Finally, given the previous finding, it is difficult to generalise on the impact of clusters on the association between entrepreneurship and development. Consensus on and validity between conceptual and operational definitions of clusters; consideration of context as well as process and, therefore, quantitative and qualitative methods; and differentiation between levels of analysis controlling for cluster stage and strength are the main criteria for future studies to consider to disentangle the impact of clusters on entrepreneurship, development and the association between entrepreneurship and development.