Evolution of Business Clusters
 What is behind the greater interest these days in 'business clusters'?
If you can understand that, you will better understand the importance of creating business clusters.
As mankind has evolved, we know that the way in which society produces goods and services has also evolved. We are now firmly entrenched in the Information Era which followed the Industrial Era, which followed the Agricultural Era, and so on.
There are other ways of describing this evolution. One simple way is to understand that we are in the process of moving from ‘Competition’ to ‘Collaboration’.
Another way of considering it is through what we sometimes call the Evolution of Management which demonstrates that the emerging most effective management approach is getting ‘Everybody Improving Whole Systems’. Although we have previously posted about this concept in the context of individual organisations, the same principle holds true for regional business sectors (ie 'business clusters').
In short, the health of regional businesses is a function of their ability to collaborate.
Chambers of Commerce have understood this for quite some time in relation to non-competitive businesses but exactly the same principle applies whether the businesses are competitive or not.
Wikipedia states:
“The cluster concept has rapidly attracted attention from governments, consultants and academics since it was first proposed in 1990 by Michael Porter in The Competitive Advantage of Nations (1990). Many governments and industry organizations across the globe have turned to this concept in recent years as a means to stimulate urban and regional economic growth.”
Instead of the traditional approach of these businesses being focused solely on their own wellbeing, the emerging approach essentially says “If you focus on the wellbeing of the entire industry or sector, you can grow the ‘whole pie’ while continuing to compete for your own share of the pie.”
Clustering for any regional business sector (even with as little as 2 businesses) can result in a range of outcomes (including new business , innovative ideas. shared administration, shared marketing, shared ordering, shared R&D and so on) – while the individual businesses continue to compete against one another.
It may not be easy for some competing business owners and managers to see but exactly the same principle applies to individual members of an organisation or sporting team (or any other team for that matter). The members of the team collaborate for the good of the whole while competing against one another for their own individual success and reward.
Allied Information on Business Clusters:
Business Cluster & Economic Development Examples and Case Studies
Our Process for Business Cluster Development
Definitions & Benefits of Business Clusters
The First Step in Cluster Development
More Thoughts on the Definition of Clusters
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