An examination of industry clusters

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VILNIUS GEDIMINAS TECHNICAL UNIVERSITY
ENTERPRISE ECONOMY AND MANAGEMENT DEPARTMENT

AN EXAMINATION OF INDUSTRY CLUSTERS

Made by: VVu-2 Aleksandra Baloban
Checked by: dr. R.Korsakienė


Vilnius, 2004
CONTENTS

INTRODUCTION 2
DEFINITION OF INDUSTRY CLUSTER 3
IDENTIFICATION OF INDUSTRY CLUSTERS 6
FACTORS DRIVING INDUSTRY CLUSTER GROWTH AND DEVELOPMENT 7
INDUSTRY CLUSTER POLICIES 8
EVALUATION AND CRITIQUE OF INDUSTRY CLUSTER POLICIES 10
ADVANTAGES AND DISADVANTAGES OF CLUSTERS 11
CLUSTERING IN LITHUANIA 13
Region clustering dimention and cluster types variety in Lithuania 13
Clastering level in different industry brabchesand sectors of Lithuania 14
LITERATURE 16

INTRODUCTION

Clusters are a nebulous concept. It covers a variety of business structures and is used for
different purposes. Industry cluster policies are a current trend in economic development planning. These policies represent a major shift from traditional economic development programs, which focused on individual firm oriented policies. Cluster policies, on the other hand, are based on the recognition that firms and industries are inter-related in both direct and indirect ways.
Given the interest in innovative economic development strategies by both the public and private sectors, industry cluster policies have received significant attention in current literature. However, there is considerable debate regarding the actual definition of an industry cluster, how to identify an industry cluster, or what factors drive the development of an industry cluster. The literature focuses on the different definitions of industry clusters, and much of the literature is case studies illustrating different types of clusters. A second focus in the literature is the identification of industry clusters. Given the many variations in the definitions of clusters, it is not surprising that there are several different approaches to identifying clusters. A third common theme in the literature is cluster policy, and how these policies can be incorporated into economic development programs.
This paper summarize the key literature on the issues mentioned above, focusing specifically on the definition and identification of industry clusters, the factors driving cluster development, and cluster policy in the United States. The last section describes attempts to evaluate industry clusters, as well as criticisms of clusters as an economic development tool. While there is ample literature on industry clusters in Europe, where cluster policy is more advanced, this literature review focuses primarily on the use of the concept in the United States.

DEFINITION OF INDUSTRY CLUSTER...