Answers
Building linkages
Clusters in developing countries face threats and opportunities. Some are able to take advantage of opportunities and grow others get trapped into poverty. UNIDO reckons that external assistance can help clusters unlock their development potential. Research on clusters in developed and developing countries has shown that differences in cluster performance correspond to differences in their internal organization. In competitive clusters, firms reap the gains of collective efficiency, which derive from external economies and the organization of joint actions
External economies emerge spontaneously within agglomerations. To the contrary, joint actions require deliberate efforts, which are uncommon in stagnating clusters. Therefore, UNIDO’s assistance focuses on the promotion of joint actions within clusters.
Joint actions can be forged:
- Between firms, which refers to the establishment of horizontal and vertical networks, among which export consortia. Networking lowers transaction and production costs and improves the capacity of firms to produce efficiently and access markets.
- Between firms and their support institutions, which improves institutional response to the needs of the private sector.
By engaging in joint actions, cluster firms can attain achievements that are out of reach for individual enterprises. It is the case, for instance, of bulk input purchase, the establishment of a joint warehouse of retail shop, or the purchase of new machinery for shared use. Policy changes can be advocated and investments deployed or sought for new infrastructure and services. As a result, clusters are able to overcome bottlenecks and accomplish the transition from stagnation to growth.
Joint actions, however, do not emerge overnight. Their development is a lengthy and challenging process. To facilitate the transition, UNIDO has formulated a six-step approach.
To go back to UNIDO's Clusters and Networks Development Programme, click here.
