Clustering Small Enterprise: Lessons from Policy Experience in New Zealand

Abstract

Doubts have been raised about the value of cluster-promotion policy given the lack of agreement over how clusters are identified. Such criticism overlooks how clusters are sometimes a mode of inquiry rather than a specific pattern of industrial location. The desire to promote business clusters is connected to a real phenomenon, but policy needs to acknowledge that exemplar clusters do not provide a role model for how other local economies may develop and that industry and market characteristics affect the significance of clustering. Efforts to promote business clusters in New Zealand show how the perceptions of cluster opportunities by business managers differ from those expected by policymakers. A review of twenty-five cluster initiatives identifies six ways that the projects question widespread opportunity to benefit from encouraging localised business collaboration: (1) value-chain division, (2) conditions on cooperation, (3) the need to go national, (4) facilitator dependence, (5) need for a leader, and (6) missing clusters. Policy intervention should be based on determining how best to work with groups of variable significance and character rather than being driven by idealised interpretations of cluster development.