August 28, 2014

All you need to know about clusters!

The term cluster appeared early in the 90-ies in the programs of economic development. By the mid 90-ies 57 % of the workforce was employed by the 380 leading clusters in the United States of America.

The first cluster in Hungary was created is 2000. It is the Pannon Automotive Cluster (PANAC). In the European Union every fourth company works in cluster environment. According to a study prepared by Innobrometer, there are great deiffernces among the former and new member countries regarding the clusters. United Kingdom has an outstanding role, where 8 out of 10 companies (employing at least 20 people) are qualified as “cluster companies”. Practically, clusters work on the principle of “cooperation and jointing forces for moving forward“, and are built on the key companies of the given industrial sector. There are many different definitions in the professional literature for the term cluster.

According to the Contracting Division of the European Committee: “Group of interdependent companies and associated institutions, which cooperate and compete; concentrate in one or more region in geographical terms; focus on determined area/sector, are connected by common technologies and abilities; are scientifically based or traditional.” Consequently, cluster means a network, the members of which jointly benefit from working together, and gain a competitive edge.

What is the rational to create clusters?

Clusters are different country by country, but many benefits are the same in any case from creating a cluster.

Major benefits of establishing clusters:

  • Improving productivity.
  • Reinforcing the competitive power of companies.
  • Efficiency of operation.
  • Improving the exporting ability.
  • Possibility for submitting applications.
  • Innovation.
  • Cooperation with other clusters.
  • Contribution to development of regional and local economy.

There are many ways to establish clusters, but they have certain common characteristics, that differentiate them from other kind of cooperating systems.

Major characteristics of clusters:

  • Cooperation among the companies.
  • Association by region.
  • Specialization, focusing on given field.
  • Traditions, relationships among institutions.
  • Players.
  • Development, innovation.

Essentially, clusters are local leading sectors at the forefront of the industry of the region, and are the durable branch of the local economy, which would never move over to other country or region. Member companies of the clusters do not abandon their own objectives, but they join forces to act together, which means an advantage in the global competition by utilizing the local conditions.

Many different clusters exist, but two basic types are distinguished:

1. Cluster of industrial sector: it is the sum of value-chain systems of a given industrial sector. The essential requirement for such clusters is to pursue objectives of the national economy, and they are not characterised by concentration in regions.

2. Regional cluster: it is the sectoral and geographical concentration of business players who have close and durable cooperation. Such clusters could be successful if developed in a decentralized manner and with “bottom-up” strategies.

It is essentially important for the operation of the clusters that the founding members jointly determine the objectives to be met, as well as the necessary means, condition, etc. Clusters are usually characterised by high level adaptability, they can continuously and knowledgeable adapt themselves to the changes and challenges in the environment. For the success of the cluster it is necessary for the members to recognise and use the full potentials in the cooperation. Only an economic policy supporting clusters, and which is based on clusters can ensure that the clusters become strong.

Cluster evolve through a number of development stages, which are distinguished in this respect as:

  • Pro-cluster.
  • Emerging cluster.
  • Developing cluster.
  • Converging cluster.

The following text could be read at the web page of Cluster Development Office: “The most important goal of cluster accreditation is to select those network cooperation, which are capable of implementing significant development project as a result of their high standard innovation and export performances and their efficiency caused by the cooperation, and are capable of outstanding performance even in regional level. The aim of granting the title Accredited Innovation Cluster is to accredit clusters that are innovative KKV and export oriented, employing many people in the domestic market in line with the strategic goals of the New Széchenyi Project.” 

The accredited title was awarded by the Accreditation Committee for 21 clusters.

Clusters proved to contribute to the economic and social growth and development of the region at a higher level. Clusters vary even at regional level, therefore, there is not unified “recipe” for their development, that is why the supports are to be tailor made to the given cluster planned to be developed. The economic policy makers should encourage the process of cluster formation and not just support the clusters themselves. The result of the cluster forming is the strengthening the competitiveness of the companies.