A Cluster Decline and Renewal Model
More details
Hide details
Publication date: 2010-03-31
GNPJE 2010;238(3):1-21
The paper proposes a model to describe the decline and renewal of business clusters based on the evolution of network ties. The proposed model relies on the idea of external network effects, and the author uses the results of research into the evolution of clusters with a varied level of technological advancement. In response to the challenges of globalization and computerization, companies operating in clusters adopt strategies oriented toward a system of internal or external ties, according to Gancarczyk. Strategies oriented toward regional networks fail to protect businesses from threats related to being isolated from the rest of the economy, which implies the negative external effects of networks and a threat of cluster decline, the author says. On the other hand, strategies based on developing foreign ties linked with the relocation of selected components of the value chain (so-called selective relocation) make it possible to avoid isolation and generate positive scale effects, both internationally and globally. Relocation processes underlie the development of modular production networks in which standard components of the value chain are subject to scattering toward locations with a cost advantage, while components with a higher value added and linked with the development of knowledge and innovation tend to be concentrated in regional clusters, according to Gancarczyk.
Journals System - logo
Scroll to top