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The Pitfalls and Booby Traps of Cluster Policy

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  • Gunther Maier

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  • Michaela Trippl

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Abstract

Over the past two decades, cluster policies have become a standard instrument of public authorities and economic development practitioners in many parts of the world. This paper takes a critical stance on this phenomenon and provides theoretical arguments that challenge the widespread application of cluster initiatives to promote long-term regional development. We distinguish between and compare two main bodies of thought: the neoclassical view and the agglomeration view. We show that there are no rationales for cluster policy from the perspective of neoclassical theory. The agglomeration view, in contrast, provides a convincing conceptual basis for justifying economic policies implemented in form of cluster initiatives. At the same time, however, it points to major problems related with the cluster policy approach. We identify and elaborate on three essential difficulties, i.e. the proper (1) targeting, (2) dosing, and (3) timing of cluster policy actions. We highlight that the problems related with these fundamental issues of each public initiative constitute powerful pitfalls and booby traps of cluster policies.

Suggested Citation

  • Gunther Maier & Michaela Trippl, 2012. "The Pitfalls and Booby Traps of Cluster Policy," SRE-Disc sre-disc-2012_01, Institute for Multilevel Governance and Development, Department of Socioeconomics, Vienna University of Economics and Business.
  • Handle: RePEc:wiw:wiwsre:sre-disc-2012_01
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    References listed on IDEAS

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    1. Starrett, David, 1978. "Market allocations of location choice in a model with free mobility," Journal of Economic Theory, Elsevier, vol. 17(1), pages 21-37, February.
    2. Anne Ter Wal & Ron Boschma, 2011. "Co-evolution of Firms, Industries and Networks in Space," Regional Studies, Taylor & Francis Journals, vol. 45(7), pages 919-933.
    3. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
    4. Andaç T. Arıkan & Melissa A. Schilling, 2011. "Structure and Governance in Industrial Districts: Implications for Competitive Advantage," Journal of Management Studies, Wiley Blackwell, vol. 48(4), pages 772-803, June.
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    Cited by:

    1. Lutz Eigenhüller & Nicole Litzel & Stefan Fuchs, 2015. "Who with whom: Co-operation activities in a cluster region," Papers in Regional Science, Wiley Blackwell, vol. 94(3), pages 469-497, August.

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