CAVIRC.net - Relationships and cooperation in Industrial Clusters

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Relationships and cooperation in Industrial Clusters In spite of all the innovations in Information Technology that have created global networks, opened up and developed emerging markets, encouraged wave after wave of international mergers and globalized consumer culture, what still matters - and will matter even more in the future - are genuine and tangible relationships. These relationships include, but go well beyond, the usual notions of supply and value chains. &lt;img hspace="5" src="/files/02706200517.54.47-industria.7dvd" align="left" vspace="5" border="1" />Industrial clusters, as these networks of relationships are known, link competing businesses and competing suppliers with collaborative research institutions, public and private sources of financing, government regulatory and development agencies, and new institutions built only for organizing and enpowering these relationships. Clusters could rely on Information Technologies to operate across countries or continents, but the essence of the cluster concept is business and personal relationships that need proximity, continuity and both informal and formal channels of contact in order to flourish.  Community is a word often used by executives involved in cluster strategy. They're not talking about good citizenship or social action. Instead, cluster strategists see companies as part of an extended business family that pools the resources and benefits of their shared location.Just as important is cooperation among competitors who probably wouldn't develop close relationships if they weren't part of the cluster. &quot;I got a call yesterday from a fierce competitor in the cluster and he's setting me up next Monday morning for a contract that doesn't fit his bill but fits mine, and we'll do it together. He'll do something for the client, and so will I&quot;.  In the most competitive of the developed and emerging market nations, companies that belong to clusters are changing their approaches to product development, manufacturing, marketing, research, recruitment and training.  Government Support Technology Innovation and Transfer The first clusters, such as leather tanning and textile clusters in Europe, predate the Industrial Revolution by centuries. Academics, such as Michael E. Porter of Harvard University, began studying cluster strategy a decade ago. But it has only been more recently, at a time when governments from Washington to Paris to Tokyo are looking for ways to give their economies an edge, that clusters have begun drawing substantial attention and money from policymakers and legislators. But greater cooperation among all the institutions involved in the strategy is necessary. The theory is good, but there's a disjuncture between theory and practice. If it is such a good idea for firms within a cluster to realize economies of scale and improve innovation, then why don't those firms seek to optimize these cluster relationships and invest more aggressively in institutions that allow them to explore the underlying technologies that propel all their businesses?  The Future: Clusters of Clusters? Despite the success of the cluster strategy, there will likely be a shakeout sometime soon among clusters from different countries that compete in the same industry. So the latest and most difficult twist in cluster strategy will be to link and preserve the best companies in several clusters and get them to work together.Because clusters rely on lots of personal contact, that means frequent travel for cluster participants from different countries. The end result will be pocket-size multinationals. </PRE>