Effects of Clusters
Benefits for employers
- Clusters strengthen companies, which can benefit from cooperation.
- Logistical costs can be reduced due to the close proximity of suppliers, service providers, research centres and training institutions.
- Geographical proximity allows new, innovative forms of cooperation both among companies and between companies and research centres. Even commercial rivals can find common ground for collaboration, enabling them to become more specialized.
Benefits for research and science institutions
- Since all research institutions work together in a coordinated fashion, they can meet the needs of regional companies more closely and collaborate with them in new R&D projects.
Benefits for regional government
- Owing to the organized flow of information within clusters, an economic environment can be engineered for the cluster industries which is conducive to growth and innovation.
- Successful clusters can accelerate economic growth and the region’s attractiveness as well as raise inhabitants’ standard of living.
- Strengthening existing clusters can encourage the emergence of new clusters.
- Rural regions also benefit from cluster-based economic policies.
Cluster Development Processes
Business clusters are flexible networks of interconnected businesses of all sizes as well as R&D and training institutions which, owing to their dense supply networks and collaborative relationships, become highly competitive.
Central Germany is home to both micro-clusters and macro-clusters. Whereas micro-clusters such as optoelectronics in Jena and microelectronics in Dresden are concentrated within a single city, in a macro-cluster the critical mass is only reached by including companies based in different federal states. The geographical size of a cluster is not determined by administrative boundaries, but is tied to value chains and collaborative relationships.
Business clusters have always emerged spontaneously all over the world. Companies are interconnected because they work for each other as suppliers or service providers. They also collaborate with research institutions, and enter into training and purchasing associations with their competitors.
Like many other regions in the world, Central Germany is characterized by a very mixed economy. Moreover, the structures of the individual sectors vary in terms of company size, the proximity of research institutions, and the presence of suppliers. Consequently, a framework for the development of clusters can only outline a general process which takes place differently from one cluster to the next and is subject to a large number of factors which can only be influenced to a limited extent.
The cluster model was developed on the basis of international comparative studies by the Industrial Initiative for Central Germany (Klaus Wurpts), HHL Graduate School of Management School (Prof. Manfred Kirchgeorg) and the Harvard Business School (Dr Christian Ketels).