Industrial Clusters: a New Idea or an Old One?

Abstract

The notion that industrial development is most likely to succeed if it takes place in a cluster and that such clusters should somehow be promoted by those who have responsibility for regional economic development has become very fashionable in recent years. The idea stems from the seminal work of Porter, but is well explained in the two articles by Botham and Downes in this journa l 1 . It is put forward as a much more promising approach for regional development than indiscriminate promotion of economic activity, which is said to typify past policies. Two questions seem to arise: first, is this really a new idea, and, second and more importantly, does it offer a greater chance of success than past policies? The two questions are related. In regional policy, as in other areas of economic policy, what is sometimes presented as a new and promising approach is sometimes, for those with longer memories, no more than the rediscovery of an idea that has been tried before. If so, it is important to ask what happened last time round and why it went out of fashion if it really promises so much.