Title: Globalisation and cluster-based economic strategy

Authors: Adolfo F. Chiri

Addresses: Microeconomics of Competitiveness Course, CENTRUM – PUCP, Lima, Peru

Abstract: Given changes in the global environment, businesses and countries are changing the way they compete. These changes are characterised by the ability of multi-national corporations to locate their investment – production plants, R&D facilities, service centres, etc., – in any location in the world where they find an adequate business environment. On the other hand, countries compete among each other to offer the multi-national corporations the most favourable business environment, generally putting in place a particular set of macro-economic policies. However, these conditions are not sufficient to attract multi-national corporations; nor are they sufficient to foster economic development in the host country. A way to accomplish both objectives, as is examined in this paper, is to design a cluster-based economic strategy. This strategy implies a new way of thinking about economic development, competition, and innovation. The world|s successful experience with clusters, as is discussed in this paper, permits an increase in productivity and efficiency, the stimulation and enabling of innovation, and enhanced competitiveness. Such clusters come to constitute the engine of economic development for the site of the cluster, including the particular city, country and/or region.

Keywords: competitiveness; cluster development; economic strategy; business environment; globalisation; sustainable development; microeconomics; multinational corporations; economic development; competition; innovation; productivity; efficiency.

DOI: 10.1504/WREMSD.2005.007976

World Review of Entrepreneurship, Management and Sustainable Development, 2005 Vol.1 No.2, pp.121 - 133

Published online: 17 Oct 2005 *

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