Enterprise clusters in developing countries: mechanisms of transition and stagnation

This paper analyses the dynamics of clustered enterprise development in developing countries. It is focused on the different types of clusters that can be identified in these contexts. After a brief introduction, the cluster concept is explained and the need to understand clusters as an expression of social connectivity rather than mere spatial agglomerations is established. Next, a typology of clusters is presented. This typology is discussed on the basis of recent research on small and medium-sized enterprise clusters in different countries and continents. The types of linkages prevailing in different types of clusters are analysed, as well as their implications for technological change. It is argued that the mechanisms of enterprise growth and innovative activity are different in each type of cluster and hence the opportunity structures that entrepreneurs face are variable across cluster types. Therefore, the mechanisms of transition from one type to another are different, and these are discussed next, as well as mechanisms of stagnation and continuity. In conclusion, the implications for development research and policy are outlined and it is emphasized that support must be tailored to the actual state of existing clusters and cannot be deduced from general theory.