Is Nanjing's Concentration of it Companies an Innovative Cluster?

This analysis considers whether theconcentration of information technology (IT) companies in Nanjing (China) canbe considered an "innovative cluster." Notes complications informulating a theory concerning the role of clusters for technologicaldevelopment and innovation diffusion and small enterprise development. Casestudies cannot be easily compared, mainly because no uniform definition is usedin cluster studies; other issues include the external economies generated byclustering, and competitiveness of small enterprises and of the cluster. Discusses reasons (including networking, flexible specialization, externaleconomies, and clustering) why small enterprises working in clusters andentrepreneurs operating in networks generally do better than those operatingindividually, and considers how clusters develop. This research sought to compare a cluster of IT firms in Nanjing withclusters in Beijing, Shanghai, and Shenzhen, and to consider whether theNanjing area represents acluster that can be competitive. The studyis based on a sample of 925 IT companies in the Zhujiang "electronicroad" (a place where computer-related shops are concentrated) in Nanjing.Found that most IT commerce is concentrated in the city, and most are privatefirms. Summarizes the advantages and problems for IT entrepreneurs inNanjing. Concludes that, comparatively, the cluster in Nanjing is not verycompetitive: this isa smaller city, located inland, and its businesssection is less developed; it is difficult to hire good people; many companieslack marketing strategies; and support from local institutions is lacking.Offers recommendations for stimulating development of clusters; more efforts bylocal government will be needed to develop an innovative milieu in Nanjing.(TNM)