Wednesday, March 29, 2017

Interaction is the Key to Economic Cluster Success

Clusters are an interconnected network of businesses that share ideas, work on collaborative projects and compete against the market. They are clusters of innovation that require constant engagement to achieve their mutual goals. According to a study in the International Review of Management and Marketing, a cluster is effectively formed when there is coordination of interaction with the environment, coordination of financial-economic policy, coordination of production-economic activity of members (Basyuk, et. al. 2016).

Coordination with the Environment: Companies within a cluster don't act on their own and are part of a larger network of co-creators. While they may engage in some competitive activities they ultimately work together to create synergy that benefits all members that are actively engaged. Helping them to actively engage in cluster management is helpful. 

Coordination of Financial-Economic Policies: The cluster survives because city, state, and national policies are designed to help it survive by creating a pro-business environment. When policies are reviewed and form an advantageous environment, businesses are more likely to flourish and grow in a way that contributes to national development. 

Coordination of Production-Economic Activity:  It is not enough to invent products but also to create them in physical form and to do so in a cost effective manner. Connecting inventors with builders is important for realizing something in tangible form so that it can be sold on the global market. The clusters advantages reside in the creation-production process. 

Economic clusters need to work together or otherwise they would be disjointed businesses in the same locality that don't have much tangible benefit. When ideas are shared, government policies in pro-business form, and inventors are connected with manufacturers businesses have the ability to achieve more than they can on their own. Successful customer management encourage interaction of all the cluster elements to create a collaborative environment.

Basyuk, A. et. al. (2016). Administration management in the innovation cluster. International Review of Management and Marketing, 6 (6s).

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