Cluster Theory and Industry Policy in Australia

Cluster Theory and Industry Policy: An Overview Author: Stanislav Bucifal Australian National University September 2008 Executive Summary This paper examines the strength of bundle up conjecture to inform assiduity policy. In the stinting sense, clods are production networks of strongly interdependent planetary houses linked to each separate in a value-adding production chain (Roelandt et al 1999). A defining characteristic of clusters is the presence of positive externalities which enhance firm competitiveness and stimulate innovation. High geographical concentrations of caper body process not only intensify competition but similarly promote collaboration. Theoretical explanations of clustering focusing on dissimilar aspects such as economies of scale, proximity to markets and supplier networks, and access to highly skilled human capital. From a policy perspective, cluster theory has a number of strengths and weaknesses. The strengths include a greater focus on interdependencies; better alignment of policies with the true nature of business; reduced trade-distortion; and greater transparency. Among the weaknesses perhaps the most serious is the potential for clusters to retard innovation, under certain circumstances, rather than promote it.

charm many of the concepts have been around for a while, new economic geography has brought to awareness of some important phenomena in groundbreaking business that had been largely neglected in the past (Schmutzler 1999). Cluster-based industry policies are common in many developed nations across the OECD. The three types of policy instruments used by governments in the slaying of cluster programs include the engagement of actors; provision of collective function; and promotion of larger-scale collaborative research and development projects (OECD 2007). Australia, however, has very a couple of(prenominal) clusters by international standards, and even fewer active cluster development policies (Marceau 1999). There are several legitimate rationales for government... If you hope to get a full essay, order it on our website: Orderessay

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