Complementing clusters: a competitiveness rationale for infrastructure investments

Abstract

Purpose – The purpose of this paper is to present a novel application of cluster theory and cluster methodology to evaluate large infrastructure investments. The complementing clusters approach, which builds on the notion of infrastructure as connecting isolated “economic islands”, is able to assess the potential for value creation effects of new infrastructure investment. Design/methodology/approach – The author uses simulation analysis based on a unique data set encompassing all employees and employers, as well as cluster mapping, for every pair of “economic islands” being connected by the examined infrastructure investments. The empirical setting is of large fjord crossings in Western Norway, the so-called E39 project. Findings – The empirical findings show that productivity gains are higher when an integrated labor market hosting complementary clusters is formed. Limitations remain regarding the economic integration path. Research limitations/implications – The authors provide an ex-ante analysis using information over the past 10 years. Following the expected infrastructure investments, future research should examine the extent to which productivity gains materialized and the reasons underlying the achieved materialization levels. Practical implications – Current evaluation of large infrastructure investments focuses on transportation economics effects, technical feasibility and environmental consequences. The authors complement this current practice by advancing a theoretically grounded value creation perspective that can affect future evaluation practices. Originality/value – Cluster complementarity-based evaluation is a novel methodology that is applicable to investment decisions which are central for economic development. Cluster analysis of infrastructure investments provides new and valuable data for making such investments decisions.

The Impact of Industry Clusters on the Performance of High Technology Small and Middle Size Enterprises

“…So that enterprises can achieve the goal of improving performance through these advantages. In addition, the competition among enterprises in the cluster is gradually intensified, which forces the innovation ability of enterprises in the cluster to be enhanced, and the performance of enterprises will be improved to a certain extent [52]. Research on the relationship between entrepreneurship, enterprise cluster and performance concluded that the knowledge-based agglomeration of enterprises positively impacts enterprise performance [53].…”

Competitive industry clusters and transportation in Minnesota

“…The nature of the literature on industry clusters, with some notable exceptions (Delgado et al, 2010;Sasson and Reve, 2015) tends toward a more qualitative approach, emphasizing a more in-depth understanding of industry linkages (Titze et al, 2011), the behavior of individual firms within competitive industry clusters, and elements of industrial organization (Kubis et al, 2012). Thus, it seems reasonable to investigate the role of transportation networks and transportation policy in supporting the growth of clusters in the same fashion.…”

Early stage cluster development: a manufacturers-led approach in the aircraft industry

“…Clusters can be defined as "geographic concentrations of interconnected companies and institutions in a particular field" (Porter, 1998). Although, in particular, economic geographers had been studying clusters already for an extended period before that, Porter's (1990) contribution increased the popularity and attention of the concept of clusters in several fields, and remains a current topic (Keller et al, 2015;O'Dwyer et al, 2015;Sasson and Reve, 2015;Wilson et al, 2014). For example, clusters can be viewed as enhancing the competitiveness of an industry in a location (Davies, 2001;Delgado et al, 2014) and is linked to theories about networks (Bryson et al, 1993;Lundberg, 2010;Niu et al, 2008), as well as firm aspects (Niu, 2010;Niu et al, 2012), and clusters have also frequently been linked to the performance of a region (Blair, 2004;Feldman and Tavassoli, 2014;Porter, 2003).…”