Economic geography involves an inconsistency in global competition. Traditional roles of locations been reduced by the new technology and present competition. Resource, capital, technology, corporate networks weakened the necessity of where the firms should be located. Clusters are geographic essence of interrelated companies, service providers, suppliers, institutions which are not only competing but also cooperate in different business areas in advanced world. (The Competitive Advantage of Nations; Porter, 1990)
There are so many theories about cluster but still it is hard to understand the competitive strategy of present global economy. The popularity of cluster ...view middle of the document...
Cluster includes a range of linked industries and other individuals which is important for competition. Such as suppliers of specialized components which is important for a company. Cluster also provide training, education, information, research and technical support to government and various institutions (e.g. universities, colleges, schools).Foreign companies also can be a part of clusters if they invests in local companies.
Cluster can be developed in many industries, smaller fields, even in local restaurants. It can be in small economy, large economy, rural area, urban area, different geographic level (e.g. nation, state, metropolitan city). Cluster can be occur in both developed and developing economy, though it is known that is it more developed in advanced economy(Porter, 1998b). For example in Massachusetts, there are 400 companies which is connected by medical devices. The definition of cluster differ on location, on companies environment, their employment categories etc.
The bounding’s of cluster occurs because of changing in technologies, the declining of industries, emerging of companies, changes in regulatory etc. The new business innovation and formation are also fundamentals of its bounding.
LOCATION AND COMPETITION
In this present era the influence of location on competition has been taken very slightly. It depends on how the companies are competing in the market. Competitors, present market, product values, linking with buyers and suppliers are main source of competition. The competition is now dynamic which is not satisfied by only efficiency but also it should be more innovative and continuous improvement. Location only influence on productivity and productivity growth. But prosperity depends on which upgrade is used for that particular location.
For longtime sustainable standard living of a nation depends on economic development. Productivity of a nation’s measured by the value of goods, unit made for per unit of nation’s human, physical resources, capital etc. then the matter of competitiveness rises. Firms can be more productive in any location. It depends on which method they are using. Using of high technology, producing high value products, and competitive service can be key issues for a company or firm to be more productive and competitive.
National economy depends on its own company’s productivity. If the companies produce quality products by using high-tech to compete the nation’s economy should be also in competitive position. The firs and basic term for a company is production process, technology, management service (Porter, 1996). And the second term is what type of strategies the company is taking to compete with their products internationally. Though still the sophistication of a company depends on macroeconomics business environment. Some aspects of business environment are a barrier for developing economics. Whereas developed economics are overcoming these aspects for which they are competing very...