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Cluster Initiatives in Developing and Transition Economies

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Cluster-based competitiveness projects, or cluster inititives (CI), have become an increasingly widespread tool for economic development. At first, clusterinitiatives were primarily associated with advanced economies. However, CIs were not adopted in developing and transition economies on a large scale until after the year 2000, but since then several hundreds CIs have been implemented in these economies as well. Also, international donor organizations have become involved in CIs, resulting in numerous donor-initiated CIs.

This report is based on a survey of 1400 cluster initiatives, incloding comprehensive data from 450 CIs that completed the Global Cluster Initiative Survey (GCIS 2005). This survey was undertaken with the support of USAID.

 The report stresses the need for CIs to be individually adapted to the local context. Since clusters struggle with different barriers to competitiveness, no singel model can fit all CIs. In developing and transition economies there are particular challenges facing CIs, including low levels of trust and economic policy less oriented towards clusters and competitiveness.

Donor-initiatied CIs operate in the most challenging environment, sometimes failing to get government sufficiently involved in the process. They are also often faced with the problematic requirement to produce measurable impact in a comparatively short timeframe.

Updated: 2006-07-27