An economic cluster is a concentration of companies and institutions that are grouped around a common activity and in a certain locality. In this way, they seek to achieve a high rate of profit and efficiency.
That is, a cluster is a set of organizations that are linked to the same business and decide to develop in a single geographical space.
Types of economic cluster
There are two types of economic cluster:
- The vertically integrated:Societies are linked through the supply chain. That is, in a cluster can be, for example, the companies that assemble vehicles and those firms that manufacture the auto parts.
- The horizontally integrated:Different organizations share a common knowledge base and a similar market for their products. Thus, they use similar technologies, human resources and natural assets. In other words, the cluster is made up of companies that compete with each other.
For relatively few years, economic clusters have been used as an instrument of industrial policy.
Traditionally, governments opted for development based on specific conglomerates. But lately it is considered that a strategy based on clusters can be more effective because it focuses on a system and not on a particular company.
It should be noted that clusters can be extended to reach complementary product manufacturers. They may also include companies that operate in industries related to their skills and technologies.
An additional relevant fact is that many clusters encompass government agencies and other institutions. These can be universities, study centers, training providers and trade associations. These entities provide training, education, information, research and technical support.
Advantages and disadvantages of clusters
Among the advantages of the clusters, it is worth highlighting that they encourage competitiveness since, being organized around customers, their needs are better focused.
Likewise, clusters create more efficient markets for all their participants, boosting productivity as a result.
Another point to highlight is that clusters are centers of innovation. This, either because of the rivalry that exists in some areas or because of the fluid cooperation that occurs in others.
However, clusters may also have problems. For example, we must bear in mind that if there is no trust and cooperation, only geographic concentrations of companies will be generated without greater benefits. At this point, social and cultural aspects influence.
Another disadvantage of clusters may be that they demand a minimum group of stakeholders and that they are willing to invest in the project.
Example of economic cluster
An example of an economic cluster can be the Gamarra commercial complex in the district of La Victoria in Lima, Peru. In that place more than 30,000 companies congregate between stores, manufacturers, contractors, outsourcing services and suppliers of the textile industry.
Gamarra has become one of the busiest shopping centers in Peru. Its great success in sales is indisputable, but it has attracted informal entrepreneurs who sell on an outpatient basis. This has meant a great challenge for the authorities to maintain order and security.
Another best-known example of an economic cluster is Wall Street where the New York Stock Exchange is located . This is one of the main financial centers in the world, bringing together companies, investors and intermediaries as brokers.