Value Chain Glossary: Cluster Approach
From microLINKS Wiki
| Please use the discussion tab to comment and suggest changes to this definition. |
|---|
Cluster Approach
Focuses on geographic concentrations of interconnected companies and other institutions and their interactions. In particular, it concentrates on the synergies between these enterprises, including those between firms in different segments of the value chain. As a result of this geographic focus, the cluster approach does not always focus on the entire value chain but on core and supporting companies and institutions in specific locations (e.g., software in Silicon Valley, tourism-related companies in the Punta Cana area of the Dominican Republic, etc.). It sees collaboration between cluster members as the source of resolutions of common problems. For example, wine industry firms regularly cooperate with universities (UC Davis, Wine Institute and others) on research initiatives and that stakeholder firms deem necessary to grow their businesses. In Italy’s footwear industry, cluster stakeholders meet jointly with leather supply companies to ensure quality standards. Technology firms in Ireland join forces in formal cluster initiatives to provide input into government high-tech policies, including infrastructure support. Both value chain and cluster projects supported by USAID have focused on specific segments (producers, buyer linkages) as well as a broader range of activities along the value chain. The major difference between the two may be in the cluster approach’s formal focus on developing associative relationships among stakeholders (compared to some more restrictive value chain approaches). However, the emphasis USAID’s more encompassing value chain approach places on the importance of value chain relations is akin to a cluster methodology.
Related Articles
- microREPORT: Value Chains and the Cluster Approach: Transforming Relationships to Increase Competitiveness and Focus on End Markets, Chemonics International. 2008
- EG Technical Briefing: The Cluster-Based Initiative Approach to Competitiveness and Economic Growth. USAID EG Office. April, 2004.
