Clusters

The concept of "clusters" is used rather loosely in most regional research/planning reports, and lacks a unified definition. Most definitions look something like this:

A cluster is a set of firms that complement one another (in buyer-supplier relationships, for example) but also compete with one another. Cluster firms also share a reliance on regional knowledge and innovation institutions, and on a regional labor market. As a group, they may use similar technologies and/or serve similar industrial markets. In advanced form, they may collaborate through a regional trade association to lobby for or market the cluster as a whole.

Different models are used to construct industry "clusters." Cluster analysis is typically carried out by a consulting organization (for-profit or local university). Key regional clusters can be determined through both qualitative and quantitative measures, though a quantitative analysis of the comparative advantage of key industry groups is critical. Three principal methods for measuring and evaluating clusters are location quotient analysis, shift-share analysis, and input-ouput analysis. This is a complex process and there are advantages and disadvantages in different choices.

Sources

	A Regional Economic Strategy for the Central Puget Sound Region (PDF: 3.8M) Puget Sound Regional Council, 2005
	Unlocking Rural Competitiveness: The Role of Regional Clusters (PDF: 16.7M) Center for Regional Development, Purdue University, 2007

Other Resources

Industry Clusters - New York State