By composition Following development of the concept of inter organizational networks in
Germany and practical development of clusters in the
United Kingdom; many perceive there to be four methods by which a cluster can be identified: •
Geographical cluster – as stated above e.g. the
California wine cluster or the flower cluster between Rotterdam and Amsterdam in the
Netherlands. •
Sectoral clusters (a cluster of businesses operating together from within the same commercial sector e.g. marine (
south east England;
Cowes and now
Solent) and photonics (
Aston Science Park,
Birmingham)) •
Horizontal cluster (interconnections between businesses at a sharing of resources level e.g. knowledge management, machinery, lab and test tools, material supply, professional employment) •
Vertical cluster (i.e. a
supply chain cluster). It is also expected – particularly in the German model of organizational networks – that interconnected businesses must interact and have firm actions within at least two separate levels of the organizations concerned.
By type of comparative advantage Several types of business clusters, based on different kinds of knowledge, are recognized: •
High-tech clusters – These clusters are
high technology-oriented, well adapted to the
knowledge economy, and typically have as a core renowned universities and research centers like
Silicon Valley, the
East London Tech City or
Paris-Saclay. An exceptional example of a prominent high-tech cluster that does not include a university is the
High Tech Campus Eindhoven, located in the
Dutch city of
Eindhoven. •
Historic know-how-based clusters – These are based on more traditional economic activities that maintain their advantage in
know-how over the years, and for some of them, over many centuries. They are often industry-specific. An example is
London as
financial center. •
Factor endowment clusters – They are created because a comparative advantage they might have linked to a geographical position. For example, wine production clusters because of sunny regions surrounded by mountains, where good grapes can grow. This is like certain areas in France such as
Burgundy and
Champagne, as well as
Lombardy, Spain, Chile and California. •
Low-cost manufacturing clusters – These clusters have typically emerged in developing countries within particular industries, such as automotive production, electronics, or textiles. Examples include electronics clusters in Mexico (e.g.
Guadalajara) and Argentina (e.g.
Córdoba). Cluster firms typically serve
clients in developed countries. Drivers of cluster emergence include availability of low-cost labor, geographical proximity to clients (e.g. in the case of Mexico for U.S. clients; Eastern Europe for Western European clients). •
Knowledge services clusters – Like low-cost manufacturing clusters, these clusters have emerged typically in developing countries. They have been characterized by the availability of lower-cost skills and expertise serving a growing global demand for increasingly commoditized (i.e. standardized, less firm-specific) knowledge services, e.g. software development, engineering support, analytical services. Examples include
Bangalore, India;
Recife, Brazil;
Shanghai, China. Multinational corporations have played an important role in "customizing" business conditions in these clusters. One example for this is the establishment of collaborative linkages with local universities to secure the supply of qualified, yet lower-cost engineers. == Process ==