Cluster Theory

The concept of clusters is an incredibly fascinating topic. How business clusters form and grow is an important for those interested in economic development.

In 1890, Alfred Marshall, one of the founders of neoclassical economics, first described clusters as a “concentration of specialized industries in particular localities”. He termed these industrial districts. That theory was extended in 1990, when a Harvard MBA by the name of Michael Porter presented the theory of the Business Cluster. The general theory is that a cluster is a group of industries in a particular geographic area. This cluster is made up of the components in that environment.

Links to content about Cluster Theory can be found below.

Brookings Institute
Harvard Business Review
New Zealand Example
Cluster Mapping

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