| | Executive Summary
This research provides an overview of cluster development in Canada and other countries of the world.
It also encompasses the importance of the cluster approach, discusses what a cluster is, what makes a cluster successful, some of the concerns about the cluster approach and the effectiveness and benefits that clusters provide.
Cluster is a broad concept rather than a precise term. A cluster consists of firms and related economic actors and institutions that draw productive advantage from their mutual proximity and connections. Over the last 2-3 decades, clusters approach has drawn substantial interest from policy makers, legislatures, business leaders, academics, economic development practitioners and development agencies.
The cluster approach is not simply about strengthening or developing individual companies or organizations within a particular industry – it is about building that industry as a whole so that it is stronger, fitter and ready to take advantage of what the future brings. By developing an agreed strategy for development, the whole sector will be better placed to identify and take advantage of the opportunities that co-operation can bring. Clustering provides firms with access to more suppliers and specialized support services, experienced and skilled labour pools and the inevitable knowledge leakage that occurs where people meet and talk about business.
Common needs and interests, interdependent and overlapping, talent and creativity, and innovation are the necessary ingredients for developing a cluster. A variety of Cluster models have been adopted by various countries according to their requirements. In Canada, the National Research Council (NRC) has focused on building science and technology based innovation in areas of local and regional strength to foster economic growth and improve quality of life. Cluster formation has a significant impact on forestry, tourism, health, materials and metals industry and arts and culture activities in Canada.
Cluster development is also revolutionizing business, prompting economic development and increasing productivity across the globe. Cluster models have been implemented successfully in USA, Brazil, Italy, Japan, France and Finland.
Clusters are based on unique strengths, and unique products and services. In the past, the term “rural” was synonymous with agricultural clusters. Now, emerging rural clusters include tourism, information and communication technology, manufacturing, and renewable energy production. In rural areas, the economy based on cluster structures is becoming a meaningful development trend. Clusters are effectively working in the agriculture sectors of Poland, USA, The Netherlands, Sweden and Argentina.
Rural clusters are challenged with competition from less advanced regions, global supply chains, energy costs and environmental concerns, changes in population composition, expanding digital communications networks, new products and emerging markets.
There is no overriding cluster theory per se and clusters are generally viewed as an economic development process rather than a definite development theory. Approaches towards developing clusters vary significantly across different countries with some adopting a holistic cluster-specific approach while others adopt a less far-reaching cluster-informed approach. Cluster-based strategies have proven effective in improving the clusters’ ability to compete and, in many instances, have influenced regional and local growth patterns.
In short, the cluster model has become an important tool of many economic development initiatives across the globe. Clusters can play a significant role in creating rural prosperity and sustainability in Alberta.
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