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A Practical Guide to Cluster Development

 
A Report to the Department of Trade and Industry and the English RDAs by Ecotec Research & Consulting  
 
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Foreword
1. Introduction
Section A: A Cluster Strategy
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2. Developing cluster-based strategies
3. Measuring cluster development
Section B: ‘What Works’: Policy Action
to Support Clusters
4. Critical Success Factors
5. Contributory factors and policies for success
 
The presence of large firms
Profile 6: Cluster Origins in Japan
Profile 7: Origins of the Arizona Software Cluster
Managing the supply chain
Promoting inward investment
Physical infrastructure
Infrastructure policy interventions
Entrepreneurial spirit
Access to finance
Finance policies
6. Complimentary measures and the policy environment
Annexes
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  5. Contributory factors and policies for success

Profile 6: Cluster Origins in Japan
In Japan the Komatsu machinery cluster evolved from the Komatsu Construction Company. The machinery cluster evolved from a historical network of support and related companies in the textile (silk in particular). Nakajima Aircraft and Fuji Heavy industries sparked the development of the auto cluster in Ota. Original Equipment Manufacturers in Ota provided continuous demand for parts, services and products. The existence of a large assembler has provided a vertically structured sub-contracting system. Following the development of the aircraft and automobile industries in the first half of the 20th century, the area attracted a number of new entrants and spin off’s in the 1950’s and 1960’s. The cluster is presently structured hierarchically with more than 70 firms operating as first-tier, second tier and third tier suppliers for Fuji Heavy Industries. Whilst this remains the core assembler, many of Ota’s part manufacturers also trade with other auto assemblers within the region and beyond.

The proximity of suppliers and other supporting firms can assist innovation and reduce transaction costs. A virtuous circle can be established as new firms are attracted to an area by the existing cluster of firms, or are established by ex-employees of the original large companies.
     
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  A Practical Guide to Cluster Development