Clusters and Competitiveness: Porter's Contribution

While clusters have been known to exist at least since the days of Marshall, Michael Porter's work, first in The Competitive Advantage of Nations (Porter, 1990) and then in On Competition (originally published in 1998; updated edition in Porter, 2008), has undoubtedly had a singular role in raising the profile of these ideas to a wider audience. The chapter looks at the origins of Porter's interest in clusters, which turns out to be a natural extension of his earlier work on companies. It identifies the key characteristics of Porter's conceptual thinking on clusters. The discussion explores the particular perspective that Porter has taken, often as a result of his specific background and prior research interests. The chapter then turns to extensions of these core concepts in Porter's more recent work. A central focus of this work has been the creation of broad-based empirical datasets that allow the testing and further development of the original cluster framework. The fourth part then explores the policy implications to be drawn from Porter's work on clusters. Porter develops recommendations on how to leverage clusters as a tool in economic development. While many current cluster programs are broadly consistent with these ideas, some policy practice and much of the academic criticism of policies inspired by Porter's cluster work have taken a different direction, looking instead into ways of creating clusters. The fifth section discusses why Porter's work in this field has had such a profound impact, especially on practitioners. A central reason is that Porter addresses very specific needs of different practitioner constituencies, providing a framework and actionable ideas they could easily relate to. The final section turns to a number of open issues that will determine whether Porter's long-term impact on the practice and thinking in this field will reach its full potential.