The Main Idea of a Cluster: Definitions and Main Attributes
The concept of a cluster, included in the group of the contemporary theories on regional development perceiving the region as a knowledge and innovation hub (Martin, 2003), originated in the works by Porter on international competitiveness (Porter, 1998; 2000; 2003; 2008), in which Porter often emphasized the importance of the location of a business (and of broadly understood “quality of the business environment”) with regard to the success of domestic enterprises (Porter, 1985; 1990).2 The impact of the location on competition was presented by Porter in the form of the diamond of national advantage, which, in the original application, served to analyze the competitiveness of the national economy, yet later became the basis for the development of the cluster concept. The factors highlighted in the diamond of national advantage and the relationships among them are, according to Porter’s intention, important determinants of the formation and development of clusters.
Porter defines clusters as “[...] geographic concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions (for example, universities, standards agencies, and trade associations) in particular fields that compete but also cooperate” (Porter, 2008, pp. 213-214) and, additionally, are “[...] linked by commonalities and complementarities” (Porter, 2008, p. 215). Despite the rich discourse on “sectoral relationship” of enterprises operating in clusters, the cluster concept goes beyond cooperation within individual sectors. Porter indicates it more clearly, stating that “[...] cluster boundaries rarely conform to standard industrial classification systems, which fail to capture many important actors in competition as well as linkages across industries. Clusters normally consist of a combination of end-product, machinery, materials, and service industries, usually classified in separate categories” (Porter, 2008, p. 220). Porter also indicates the components of clusters, including various entities, both enterprises and ancillary institutions supporting the cluster’s development, as well as government agencies (provided that they exert a significant influence on a given cluster). What constitutes the core of a cluster is enterprises producing end-products (or providing final services), creating the cluster brand and determining its competitiveness. Along with them, there are suppliers of specialized production materials, parts, machinery and services, enterprises in related sectors, producers of complementary products, and enterprises belonging to further sectors of the value chain. Cluster enterprises are supported by R&D institutions (universities and scientific institutions) as well as specialized infrastructure consisting of financial institutions, business-related institutions, standardization agencies, industry associations and other private institutions supporting the members of the cluster. The definition presented by Porter includes the most important cluster determinants: geographical concentration and sectoral concentration. Both the similarity of the cluster entities as well as the development of relations among them (based on coopetition, and hence simultaneous cooperation and competition) are the derivatives of the two most important attributes of clusters mentioned above. The similarity of cluster enterprises results from the common location and sectoral affiliation - enterprises in a cluster operate in the same political, legal, economic and socio-cultural realities created by specific regional and sectoral conditions. They share a common culture, experiences and the same vision of regional and industrial development. Facing similar problems and threats, they follow a common development trajectory. Geographical proximity is also the basis for the development of cooperation in clusters - a small distance separating the enterprises (as well as other factors of common location, such as a cultural community, a common language and a common system of values) favors establishing informal contacts with other enterprises. Numerous and repetitive interactions among partners can translate into lasting, trust-based business relationships. In turn, the second crucial attribute of the cluster, i.e. sectoral concentration, facilitates the creation of various relationships based on similarities or diversity of the enterprises operating in a cluster. The heterogeneity of the partners allows to develop vertical relationships along the value chain, while their homogeneity is the basis for the development of horizontal relationships often based on coopetition. What appears characteristic of clusters is the universality of their occurrence. As Porter claims, “[...] clusters occur in many types of industries, in both larger and smaller fields, ... in large and small economies, in rural and urban areas, and at several geographic levels ... in both advanced and developing economies” (Porter, 2008, p. 218-220). With regard to this, another feature can be noticed, namely their vast variety. Considering Porter’s reasoning, there is no single universal cluster model - “[...] clusters vary in size, breadth, and state of development” (Porter, 2008, p. 220), they “[...] take varying forms depending on their depth and sophistication” (Porter, 2008, p. 215), and the differences are reflected in “the content” of the cluster. For this reason, it is difficult to indicate the permanent elements in the structure of a cluster and set its boundaries (both in geographical and sectoral aspects, as well as in relation to the number and type of entities included in the cluster). They are blurred and additionally variable, which is noticed by Porter, claiming that “[...] the boundaries of clusters continually evolve as new firms and industries emerge, established industries shrink or decline, and local institutions develop and change” (Porter, 2008, p. 220). Therefore, apart from the geographical and sectoral concentration, the strength of connections among its constituent elements proves to be the third main determinant of a cluster since “[...] drawing cluster boundaries is often a matter of degree, and involves a creative process informed by understanding the most important linkages and complementarities across industries and institutions to competition. The strength of these ‘spillovers’ and their importance to productivity and innovation determine the ultimate boundaries” (Porter, 2008, p. 218). The relationships developed in a cluster trigger the synergy effect because it acts as “[...] a system of interconnected firm and institutions whose value as a whole is greater than the sum of its parts” (Porter, 2008, p. 229).
In his concept, Porter also indicates the competitive aspect of clusters, claiming that they are an “important multi-organizational form, a central influence on competition” (Porter, 2008, p. 224). At the same time, he lists three areas in which the competitive advantage of a cluster is most pronounced: productivity, innovation and entrepreneurship. An access to specialized inputs (thanks to cooperation with the local suppliers), a development of a specialized labor market, an access to knowledge and information (including the effect of spreading knowledge), complementarity and a flexible specialization as well as the possibility of using specialized business support infrastructure (tailored for the needs of cluster enterprises) have the greatest impact on increasing the efficiency of cluster enterprises. The development of cluster enterprises’ innovation is partly determined by the same factors that were listed in the first area, i.e. an access to the input, especially the one used in the innovation process (e.g. production machinery and equipment, manufacturing technology), an access to highly qualified employees
(which is an indisputable advantage of the cluster because human resources are the most important kind of resources for an organization in the knowledge-based economy) and an access to knowledge (obtained as a result of interactions with the other entities in the cluster, especially with the R&D institutions). Porter extends this list with additional benefits such as the speed of response to the emerging market trends (an access to information helps cluster enterprises to perceive and take advantage of the market opportunities), demanding customers (stimulating innovation and the quality of products and services), knowledge flows and demonstration effects (observing and imitating the other entities in the cluster), cooperation in the innovation process (joint implementation of the innovation process with the involvement of various partners) and an increased competition (making the enterprises need a continuous improvement and seek competitive advantages). In turn, the third mentioned area of a cluster’s competitive advantage, namely entrepreneur- ship development, is based on low entry barriers, easiness of obtaining information about the market (which is a derivative of the benefits obtained in the two previously discussed areas) and an easy opportunity of creating spin-offs.
The concept created by Porter evoked criticism from the academic community.3 The basic allegation concerns the lack of a coherent cluster theory that would be supported by the literature studies or research results. It is strongly emphasized by Feser, who states that “[...] there is no theory of industry clusters, per se” (Feser, 1998, p. 19). Porter limited his analysis only to presenting a general idea of the cluster, ignoring all the scientific achievements (including the other neo- Marshallian theories of regional development), which Porter briefly describes as “historical and intellectual antecedents of cluster theory” (Porter, 2008, p. 222). The very cluster definition also raises doubts - it is very contextual, which is admitted by Porter himself: “the appropriate definition of a cluster can differ in different locations, depending on the segments in which the member companies compete and the strategies they employ” (Porter, 2008, p. 221). Martin and Sunley commented the statement saying that “[...] the existence of clusters, appears then, in part at least, to be in the eye of the beholder or should we say, creator” (Martin & Sunley, 2003, p. 11). The concept created by Porter is blurred and unclear, which, as Diimmler and Thierstein (2003) emphasize, creates a wide field for various interpretations. Martin and Sunley define the cluster concept as “[...] something of a chaotic one” (Martin & Sunley, 2003, p. 13), whereas Bergman (1998) admits that it is difficult to indicate another, an equally vague concept that refers to such a wide spectrum of academic disciplines and professions. Researchers accuse Porter of creating a fashionable keyword (Nauwelaers, 2001; Martin Sc Sunley, 2003), which was adapted by subsequent researchers scrutinizing the phenomenon of industrial clusters. In Maskell and Kebir’s opinions “[...] the sudden surging interest is no unquestioned blessing” particularly that “[...] few would, even at the outset, feel tempted to accuse the cluster literature at large for being overly concerned with precise definitions of important constructs or burdened with excessive specifications of the exact nature of the processes involved” (Maskell Sc Kebir, 2005, p. 1).
The cluster concept has become so influential that despite the weaknesses discussed above it has dominated other concepts of regional development (with a much better theoretical and empirical underpinning) provided in the literature. Due to the difficult-to-measure variables that Porter used to describe his concept (such as trust, creative environment, social capital), the term “cluster” began to be applied to refer to various industrial clusters as well as business contracts4 (Altenburg & Meyer- Stamer, 1999). The lack of an explicit cluster definition framework has encouraged scientists to create their own definitions (more or less similar to Porter’s ones). In order to establish the differences in cluster definitions in the literature, selected definitions were listed and decomposed into basic elements (Lis & Lis, 2014a). In the end, the main attributes of a cluster were identified and arranged in four successive levels (Lis & Lis, 2014a, pp. 48-49). The underpinning of the cluster concept (Level I: “Concentrations”) comprises two elements: geographical and sectoral concentration. The second level includes elements that concern various connections within a cluster (cluster definitions emphasize cooperation and mutual interactions as well as relationships based on coopetition and networking). The third level is the most elaborate one - it refers to “Proximity” among the cluster members, which is shaped by the factors located at the lower levels (“Concentrations” and “Cooperative relationships”). This level embraces the elements of the development trajectory (common goals, facing the same opportunities and threats of the environment), complementarity (e.g. an exchange of resources and competences), social capital (non-market relationships) and cultural capital (cooperation to create specific tangible and intangible resources as well as raising employees’ competences). The last level reflects the “Benefits” resulting from functioning in a cluster: synergy effect (as a result of cooperation), external benefits and institutional infrastructure supporting the cluster. The analysis of the collected cluster definitions, carried out by means of the four-level list of cluster attributes presented above, has shown significant differences in identifying basic cluster determinants (Lis & Lis, 2014a, p. 50). It can be noticed that the factors placed at the first level, i.e. geographical and sectoral concentration, are the most frequently mentioned attributes of cluster definitions developed so far - these two features are considered to be the necessary conditions for recognizing a given structure as a cluster. Although described very generally, relationships (cooperation and interactions) also proved to be equally important.
The effectiveness of cooperation in a cluster depends not only on the business efficiency of the cluster members but, primarily, on the nature and quality of the relationships that arose among them. Surprising as it may seem, coopetition (although it is strongly emphasized in Porter’s definition) and networking (despite the fact that the cluster has the characteristics of a network)5 were immensely rarely referred to in the analyzed theoretical approaches. Many of the definitions also omit (completely or to a large extent) the set of attributes assigned to the “proximity” level. Relatively most references are made to social capital, which results directly from the choices made at the earlier level (the “social capital” factor is closely related to “cooperation and mutual interactions” factor appearing in the vast majority of the analyzed definitions). Moving on to the highest level (“Benefits”), it is easy to notice that in the analyzed cluster definitions the most attention was devoted to institutional infrastructure, which became the basis for distinguishing between a narrow and a broad approach while defining a cluster. According to the broad approach, clusters include both enterprises and the institutional infrastructure supporting them (e.g. R&D institutions or business-related institutions) (Feser, 1998; Porter, 2000; 2008; Van Dijk &c Sverrisson, 2003; European Commission - Enterprise Directorate General, 2003; OECD, 2004; Gorynia & Jankowska, 2008). The enthusiasts of the narrow approach (Enright, 1992; 1996; Rabellotti, 1995; DeBresson, 1996; Rosenfeld, 1997; Swann & Prevezer, 1996Swann Swann 1998; Padmore & Gibson, 1998a; 1998b; Roelandt & den Hertog, 1999; van den Berg, Braun, & van Winden, 2001; Cooke, 2002; Steinle & Schiele, 2002; Simmie & Sennett, 1999Simmie 2003; Maskell & Kebir, 2005, Lis &c Lis, 2014a) include only enterprises, and to describe the infrastructure supporting the basic area of the cluster activity, they use other concepts of regional development based on knowledge and innovation (e.g. the concept of the regional innovation system and the innovative milieu). Much less emphasis is placed on the synergy effect, although it is the specificity of the relationships developed among the components of a cluster that determines this type of structure to act as a creator of the synergy effect.