What do German cars, Swiss chocolate, French champagne, and New Zealand dairy have in common? They're all examples of clusters.
While there are many definitions of what clusters are, we (the Institute) use Professor Michael E. Porter's (Harvard Business School) definition:
When talent (i.e., workers), firms (anchor firms, suppliers, etc.), research organizations, and other actors within a cluster ecosystem co-locate together in a geographical area, they create a competitive environment, which can spur:
- Labour market pooling - larger pool of specialized workers who come for jobs and opportunities
- Supplier specialization - to remain competitive, suppliers develop innovations and specializations to stay ahead
- Knowledge spillovers - e.g., when people move from firm to firm, or when friends meet up to "talk shop"
Combined, these interactions produce innovations, which help firms become more productive and competitive, especially on the global stage, generating economic prosperity for the region.
There is currently alignment across all three levels of government in Canada. The Federal government's superclusters initiative has produced some healthy competition, but more importantly, reasons for firms to work together to pool resources and reap shared benefits. The Ontario Government continues to support clusters from a regional economic perspective, and there is a plethora of sector development offices across the Toronto Region that help firms and organizations grow.
Listen to our Clusters & Competitiveness podcast
Want to read more about clusters?
The Institute for Competitiveness & Prosperity has released publications on clusters, cluster policy, and policy recommendations.
Latest Institute blog posts on clusters
Looking for Cluster Data?
Visit the Institute's Canadian Cluster Data Portal.