Cluster-Based Economic Development: Life Cycle Stages and Policy Implications

Abstract

Economic development has always been a dynamic and evolving goal, with both national and local governments continuously grappling with the challenge of designing and implementing policies and programs that maximize the efficient use of their limited resources. In their efforts to stimulate growth and optimize resource allocation, governments must balance competing priorities and adapt to ever-changing economic landscapes. One of the more recent approaches gaining traction in this field is the cluster-based economic analysis and strategy development model. This approach focuses on identifying and fostering clusters of interconnected businesses, industries, and institutions within a specific geographic region. By promoting collaboration and innovation within these clusters, governments can drive economic growth, improve competitiveness, and enhance productivity. The cluster-based strategy encourages the concentration of resources in key areas where regions or nations have a competitive advantage, allowing for more targeted investment and policy-making. This method has shown promise as a tool for enhancing regional economic development, encouraging specialization, and boosting overall economic resilience. This study reviews key literature and examines various cluster-based economic policies implemented by different governments. Building on this review, it introduces the concept of "the cluster life cycle" as a critical factor in determining the support requirements for clusters at different stages of development. To investigate this concept, a survey was conducted with 30 participants from three distinct clusters, each at a different maturity stage. The survey was designed based on a comprehensive review of international cluster support programs, ensuring it captured a broad perspective on the types of assistance needed for cluster growth. This paper presents and analyzes the findings from the study, which was conducted among cluster members in the Eskişehir-Bilecik-Kütahya Region of Turkey. The focus of the research was to identify the specific types of support necessary to foster the development and advancement of these clusters. By exploring the unique needs of clusters at various life cycle stages, this study provides valuable insights into how tailored support strategies can enhance cluster growth, competitiveness, and sustainability in regional economies. The results offer practical implications for policymakers and stakeholders involved in promoting cluster-based economic development in Turkey and beyond.