Today, no one doubts the spontaneous emergence of clusters. But when exactly does this grouping of companies begin? Although it may appear to be a new concept, we could say that the appearance of clusters dates back to Neolithic times, when human beings first began to produce surpluses and discovered the economic benefits of trading with them. Clusters and their synergies can also be observed in the economy of Mediaeval Europe and all the way up to the present day.
The concept of clusters appears formally (but not with this name) in Alfred Marshall’s classic treaty, in which he analyzes external economies and the advantages to be gained by geographically concentrating economic activity. It was in the decade of the 90s of the 20th Century that the “cluster” concept was accurately defined by Michael Porter and his team at Harvard Business School.
As defined in Prof. Porter’s works, a cluster is a concentration of companies and institutions within a relatively small area which carry out interrelated business activity and which generate synergies which make them all more effective. The competitive advantage that each company achieves through integration in the cluster depends on their particular strategy and the “quality" of their interactions within the cluster. Being part of a cluster generates competitive advantages, sometimes subtle ones, but real nonetheless. When this is no longer the case, companies move on and eventually the cluster disintegrates. In contrast, a dynamic cluster, with interactions that generate a high number of competitive synergies, grows and attracts new companies.
This explains the cluster as a real and essentially spontaneous phenomenon. However, after the publication of "The Competitive Advantage of Nations"1, we are provided with a theory that allows us to identify existing clusters and gain an insight into their internal mechanisms.
Moreover, a methodology begins to develop in order to gain further competitive advantages by improving the way they function. So we already have:
* A real and spontaneous phenomenon: “clusters”.
* A methodology based on the theory propounded by Michael Porter and his team.
This was the situation during the mid-90s. At that time, some governments began to realize that the ideas developed around this concept could significantly contribute to governmental efforts to improve the competitiveness of their respective economies.
Professor Eduardo Ballarín, who recently passed away, together with Prof. Josep Faus, both at IESE, were pioneers in Spain, and I would dare say in Europe, in the use of cluster methodology for improving government policies in the promotion of competitiveness. I was a first-hand witness of this because I had the privilege of working with these two exceptional people in my role as Minister for Industry of the Government of Catalonia.
Almost a decade and a half later, almost all European, local, regional and national governments have competitiveness development programs based more or less directly on the cluster concept. The government of the European Union itself has joined this trend and recently created a group of experts, "European Cluster Policy Group,” of which I am a part, with the objective of defining its approach in this area.
When we talk about clusters, we may be referring to three very different things:
1. The real phenomenon, which obviously precedes the name (cluster) and the theory.
2. The theory and methodology that today is dominated by Porter's ideas and contributions.
3. A variety of political uses of the cluster concept aimed at the promotion of competitiveness which have, in turn, generated a diversity of administrative definitions and approaches towards those realities.
Today’s European outlook on the subject of clusters could be considered complex, mainly due to the fact that the word is used to define the three evidently different things that I have just described. On the other hand, it is true that the concept of the cluster has permeated deeply through all governmental levels due to the fact that it concerns the development of competitiveness not only at a macro but also microeconomic level.
In Spain, the first governments to systematically use cluster methodology were those of Catalonia and the Basque Country. In the case of the former, thanks to the aforementioned collaboration of Professors Ballarín and Faus and myself, at that time Minister for Industry of the Catalonian government, and in the case of the latter, thanks to the concerted effort of the then Vice-President and Minister for Industry of the Basque government, Jon Azua.
The results were so convincing that today practically all the governments of the autonomous regions are using cluster methodology, as well as some cities such as Barcelona, whose most emblematic project in this sense is called 22@. The central government, through the Ministry of Industry, is now putting similar policies into practice.
Final thoughts
In my opinion, general acceptance of the cluster concept and its methodology is a positive thing because it allows, through the identification of functional structures in the economic reality, a more intelligent and constructive dialogue to take place between the pertinent public entities – governments – and the elements that make up the real economy – companies. Nevertheless, this trend is not without its pitfalls which arise mainly, in my opinion and in the first place, from the wrong use of the cluster concept.
If any type of grouping of companies is called a cluster, it is easy to forget that real clusters are those that represent a spontaneous and “natural” reality of creation and strengthening of synergies. This can lead to confusion with artificial constructions, created by administrative decisions and basically geared towards the channeling of public subsidies, in which case we would be distorting the real system of creation of synergies with unpredictable and potentially highly negative results.
Despite this, I am still optimistic about the benefits for the competitiveness of our productive systems which derive from the use of cluster methodology, a use which is mostly a sensible one.
1Porter, M. (1990, 1998) "The Competitive Advantage of Nations", Free Press
Antoni Subirà
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