[ 19th December 2005 by Kumar Gaurav 0 Comments ]

Globalisation and cluster-based economic strategy

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Globalisation and cluster-based economic strategy


Abstract: Given changes in the global environment, businesses and countries are changing the way they compete. These changes are characterized by the ability of multinational corporations to locate their investment – production plants, R&D facilities, service centers, etc. – in any location in the world that they find to be an adequate business environment. On the other hand, countries compete among each other to offer the multinational corporations the most favorable business environment, generally putting in place a particular set of macroeconomic policies. However, these are not sufficient conditions to attract multinational corporations; nor are they sufficient to foster economic development in the host country. A way to accomplish both objectives, as is examined in this paper, is to design a cluster-based economic strategy. This strategy implies a new way of thinking about economic development, competition, and innovation. The world’s successful experience with clusters, as is discussed in this paper, permits an increase in productivity and efficiency, the stimulation and enabling of innovation, and enhanced competitiveness. Such clusters come to constitute the engine of economic development for the site of the cluster, including the particular city, country, and/or region.
Keywords: Competitiveness; Cluster Development; Economic Strategy; Business Environment; Globalisation; Sustainable Development; Microeconomics.

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