Industrial cluster’s role in region’s economy: System and agglomeration approach and interinfluence mechanism

Abstract

Over the last three decades, a cluster approach, unlike other theories and models of competitive territories’ industry development, has become quite popular in regional management practices. Many scientific publications examine the phenomenon of industrial cluster and its importance for boosting the social and economic development in the territories, although the interinfluence mechanism of the industrial cluster and regional social and economic system is still underdeveloped. As a result, managers responsible for the cluster policy at the level of a political unit are not equipped with sufficient theoretical and methodological knowledge which could enable them to accept the advantages of territories’ cluster development, as well as to see the detrimental effects of clusterization at their initial stage and to eliminate them. One of the key reasons for poor understanding of the two-directional impact of the industrial cluster and region’s social and economic environment lies in the authenticity of the theoretical approaches to cluster exploration which focus either on the social and economic (system, institutional, and network approaches) or geographical (agglomeration, classic, and administrative approaches) sides of this phenomenon. The purpose of the research is to simulate the interinfluence mechanism of the region’s social and economic environment and industrial cluster with regard to the synthesis of the social and economic and geographic aspects of clusterization based on the uniquely designed system and agglomeration approach. To systematize and to structurize the theoretical provisions of the cluster theory, the article describes an algorithm designed to implement the system criteria-based approach to analyze theories concerning the mutual impact of a region and industrial cluster. This algorithm includes three stages: 1) a preliminary stage which applies scoping study methodology to define form and content criteria to the analysis of the cluster theories and works out the selection principles and mechanisms for the scientific publications; 2) a static stage with the identification of the scientific approaches and schools in the structure of cluster theory; 3) a stage of dynamic analysis which examines the development of cluster theory over time, as well as the weak and strong points of the approach in question under the relevant trends in cluster scientific discourse. The application of the systematic criteria-based approach reveals six approaches typical for the development of cluster theory: classic, network, agglomeration, institutional, administrative, systematic. These approaches are characterized in terms of Russian and English economic discourses due to the differences in academic communities and institutional prerequisites for the development of cluster theory. The analysis shows that the approaches could be conceptually categorized into two groups. The first group of approaches includes classic, agglomeration, and administrative approaches and focuses on the territorial geographical dimension of the industrial cluster, is characterized with the detailed examination of its financial grounds and methodological tools for recording the cluster boundaries, sees the cluster as a whole unit. At the same time, the first group of the approaches does not pay sufficient attention to the social and economic ties within the industrial cluster and mechanisms of its impact on the region’s social and economic environment, which actually becomes the key point of the second group of approaches – network, system, and institutional. Closer inspection of the evolution of the scientific approaches reveals that neither of them gives any comprehensive analysis of the mutual impact of the regional social and economic environment and industrial cluster. To close the gap, the article offers a systemic and agglomeration approach which covers both social, economic, and geographic aspects of interinfluence of the systems in question. The uniquely designed approach helps the scholars develop a theoretical model of a mechanism, which reveals the true nature of the genesis of adverse and positive clusterization effects and provides a wide range of opportunities to timely management impact. What is more, when the authors define cluster as a geographical site in terms of system and agglomeration approach, they could apply a number of generalizing indicators (for example, gross cluster product) characterizing the impact of regional environment on both the organizations within the cluster and on the cluster as it is with regard to its cultural environment, infrastructure, and social economic wellbeing of the region’s population. The system and agglomeration approach described and the interinfluence mechanism of the regional social economic environment and industrial cluster can be applied by the experts in regional management, as well as by the scholars to develop and to study the basics of the regional cluster policy. Further studies are seen to lie in proposing evaluation and forecasting tools for the industrial cluster development in the industrially developed regions to choose the efficient measures of cluster policy at the regional level.