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Target Industries FAQ

What is a cluster?

  • A geographic concentration of interconnected economic and innovative activities in a particular field 
  • An agglomeration of interconnected companies and institutions that collaborate and compete at the same time 
  • It occurs naturally, but can be stimulated and developed strategically 
  • The presence of strong clusters within one industry will often indirectly spur cluster creation in other, non-related industries in the same geographical region 
  • A cluster consists of members from industry, academia and government institutions (the triple helix) - often coordinated by an organizational unit in the cluster 
What is the value of being part of a cluster?

  • Clusters support economic development through the specialization of regions in activities within which companies can achieve higher productivity through accessing external economies of scale or other comparative advantages 
  • Industries participating in a strong cluster register higher employment growth as well as greater expansion rates and higher numbers and patents 
  • Clusters reduce the cost of production and the cost of exchange by strengthening trading relationships and the transparency of local input and output markets
  • Local knowledge spillovers: related local discoveries can simultaneously enhance the knowledge base of multiple local firms 
  • Qualitative studies of clusters emphasize the central role of specialized local R&D institutions, test facilities etc. 
  • Cluster activities promote enterprise investments in innovations such as single R&D projects, business-research collaboration and business-to-business collaboration. 
Why have a cluster organization?

  • A cluster organization strengthens collaboration within the cluster and facilitates e.g. information exchange, training and seminars, joint corporation projects, marketing and public relations, as well as internationalization
  • The cluster organization facilitates access to demand, skills or suppliers within the cluster or neighboring clusters and thereby enhances the natural, positive spillover effects in the cluster 
  • Cluster programs are an integral part of an effective innovation policy at regional as well as national level, and cluster organizations are essential for the execution of cluster policies 
  • A key role of the cluster facilitator is to determine what action is necessary for increasing the prosperity of the cluster