Re‐visiting Indonesian cases for cluster realism

Abstract

PurposeThe purpose of this paper is to use case study evidence to explain that enterprise agglomeration in itself may not advantage business development. Agglomeration has the potential to bring enterprise advantage but whether this occurs depends on additional supportive conditions.Design/methodology/approachThe paper re‐examines case studies of Indonesia clusters from a more critical perspective than adopted in their original presentation. This critical perspective follows a realist assessment of agglomeration in which advantages depend on specific business environments.FindingsFive processes are identified that limited the advantage obtained from agglomeration: internal segmentation; enterprise independence; technological pooling; excessive competition and linkage dependencies. Three attributes that influence whether agglomeration assists business and regional development: enterprise diversification, entry barriers and cluster scale.Research limitations/implicationsThe paper is limited by its reliance on previously completed case studies rather than a set of purpose‐designed case studies.Practical implicationsBusiness promotion agencies should be aware that not all enterprise clusters have an equal likelihood of sustaining economic growth.Originality/valueThe combined evidence from previously published case studies of Indonesian cluster experiences adds to the understanding of the conditions required for agglomeration advantages to be realised.