Competitive Challenges and Cluster Responses. Orchids, Cars and Electronics in East and Southeast Asia

The cluster approach continues to gain ground as a key strategy for industrial development in today’s globalised era. Nevertheless, not every country and cluster achieves the desired competitiveness goal of cluster development. While many cluster studies have examined factors and conditions that influence the success or failure of cluster development, most focus on only one or two aspects. But cluster development is a complex process that involves numerous interdependent actors and institutions. To develop clusters successfully, policymakers must view cluster development as a ‘process’ and understand their intertwining elements and mechanisms. This study, hence, develops a holistic framework for cluster policy analysis. This framework provides a better understanding of cluster development processes and mechanisms so as to bring about more effective formulation and implementation of cluster policy. The analytical framework takes account of the interplay and interrelationships of five key elements: (1) context and external factors, (2) cluster characteristics, (3) cluster governance, (4) the institutional modality of cluster intervention and (5) the effectiveness of the institutional modality. A case study approach and a multi-dimensional comparison of clusters across national contexts and sectors were applied as the main study methodology. Seven clusters in three sectors and in three country settings were purposively selected for comparative analysis. These include the Thai hard disk drive (HDD) cluster, the Taiwanese semiconductor cluster, the Malaysian electronics cluster, the Thai and Malaysian automotive and auto-parts clusters, and the Thai and Taiwanese orchid clusters.