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Reading 2-1: Clusters and New Economics of Competition by Mind Map: Reading 2-1: Clusters and New Economics of Competition
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Reading 2-1: Clusters and New Economics of Competition

"Clusters are geography concentrations of interconnected companies and institutions in a particular field."May cross national borders

Paradox: Secret to success in global economy lies increasingly in local stuff that distant rivals can't match

Knowledge, Relationships, motivation...

Advantages of cheaper inputs can be mitigated through global sourcing, advantage of better use of these inputs can not

Promote both competition and cooperation

Cooperation mostly vertical

Competition is mostly horizontal

Competition and cooperation can coexist because they happen in different dimensions

Promote competition

Increase productivity of companies in the area

Drives direction and speed of innovation

Stimulates the formation of new businesses

Alternative way of organizing the value chain

More flexible than vertical integration

Close proximity of companies fosters coordination and trust

Trust and coordination of vertical integration but at the same time flexible!

Development

Birth

Evolution

Decline

New issues for strategic agenda

1. Choosing Locations

2. Engaging Locally

3. Upgrading the Cluster

4. Working Collectively

New Roles of Governments

Must ensure high-quality inputs like educated people and infrastructure

Must set rules of competition through antitrust laws etc

Should promote cluster formation and upgrading