Detecting and Measuring Economic Clusters on a Regional Level

Detecting and measuring economic clusters on a national scale is possible with a little statistical analysis. Researchers in Germany were able to evaluate macro-data and determine which industries and geographic locations experienced vertical and horizontal linkages (Titze, Brachert & Kubis, 2011).  Understanding where these clusters are formed can impact public policy in ways that improve production and export. 

The researchers used input-out analysis and then further pinpointed locations of industries with concentration measures. The end result was that they were able to determine concentrations of linkages in specific regions within German. 

Governments can use information like this to determine where clusters are forming and what industries are thriving. Based on economic need, they can further promote policies for the national good will. 

To understand specifically how these firms are connected and how they interact means we would have to move from a macro analysis to something more intimate. This intimacy could be in the form of specific transactions and inter-company exchanges that highlight how they are acting. 

Governments should consider supporting and enhancing research in economic clusters because of their large potential on the economy. Recent decades have sparked more interest but not enough to truly push for active engagement on a national level. The development of economic policy could be based on data, such as found in this study, and followed up with supportive detail grabbing research. 

Titze, M., Brachert, M. & Kubis, A. (2011). The identification of regional industrial clusters using qualitative input–output analysis (QIOA). Regional Studies 45 (1).