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Title: Advantages and disadvantages of targeting industry clusters- [World Wide Web]

Notes: Regional industrialization efforts include industrial recruitment, entrepreneurial and small business development, and business retention and expansion programs. Recently, many states and communities have targeted their industrialization programs at specific industries to promote the development of industry clusters (see Table 1 for examples). Broadly defined, an industry cluster is a loose, geographically bounded collection of similar and/or related firms that together create competitive advantages for member firms and the regional economy. The purpose of this paper is to summarize the debate concerning the advisability of industry cluster targeting as an employment generation strategy for states and sub-state regions. Proponents of an industry clusters strategy point to carpet manufacturing near Dalton, Georgia (230 firms, 25,000 jobs) and furniture near Tupelo, Mississippi (240 firms, 22,000 jobs) as examples of industry clusters that provide large numbers of jobs for area workers. And additional cluster `success stories` are predicted if industrialization programs are redirected to encourage the development of new industry groupings. Skeptics of this strategy acknowledge the benefits associated with developed industry clusters; however, they question whether this is a realistic industrialization strategy for many regions. The development of a cluster requires specific conditions that may be attainable only at significant costs. For areas deficient in these necessary conditions, the promotion of industry clusters will be unproductive. Our review of the appropriateness of a clusters strategy begins with a summary of industry cluster characteristics. Next we present the potential advantages developed clusters provide regional economies and the difficulties of establishing competitive clusters in new locations. We conclude with a summary of the implications of an industry clusters strategy for regional industrial development.

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