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How can authorities play a conclusive role in promoting business clusters, critically discuss.

With the upturn of the 21st century, trends in technology, globalization and emerging competition in every sector/industry irrespective of geographical boundaries, which has not only made the average consumer more tech savvy, aware and knowledgeable but at the same time, inadvertently, set the bar higher by raising the expectation levels of product/service standards. This is the right time for the governments to capitalize on the growing momentum and harness the long term benefits that it carries by providing business friendly policies and the right framework to support this explosive growth that is to provide economic prosperity to all its citizens. It has also been evident, lately, through common observation, that the conventional and aging principles of economic development would just not fit the bill.

In this context a more proactive and strategic role for government in support of the cluster-based economic development model has emerged. There is a growing consensus that if done right, this model can provide a foundation for sustainable economic growth and the way forward to greater benefits for the citizens.

Over the last decade, clusters have drawn substantial attention from policy makers, business leaders, academics, economic development practitioners and development agencies. Cluster development strategies have been implemented in many parts of the world. Clusters are present in the economies of developed and developing nations, large and small, urban and rural, and across jurisdictions (e.g., nations, states, metropolitan areas, regions and cities).

Governments with widely differing ideologies and philosophies have instituted cluster promotion policies. In the United States and Canada, liberal and conservative governments have adopted cluster-based strategies for the sole reasons of economic benefits and returns that it provides.1

While...
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