What Determines Success and Failure of Cluster-Based Industrial Development?

Industrial clusters are ubiquitous in history and the contemporary developing world. While many of them grow dynamically, others stagnate. This study explores factors affecting the success and failure of cluster-based industrial development based primarily on own case studies conducted in East Asia, South Asia, and sub-Saharan Africa as well as historical studies in Japan and Europe. It is found that the key to the successful development is multi-faceted innovations, encompassing technical and managerial innovations or improvements. Since innovative ideas spill over, collective actions which attempt to internalize externalities often play a role in sustainable development of industrial clusters. An implication is that stagnant clusters can be vitalized if multi-faceted innovations can be stimulated by policy means.   

 

Keijiro Otsuka is a Professor of Development Economics at the Graduate School of Economics at the Kobe University and a Chief Senior Researcher at the Institute of Developing Economies in Tokyo. He was a professor at the National Graduate Institute for Policy Studies (GRIPS) from April 2001 to March 2016. He received a Ph.D. in economics from the University of Chicago in 1979.

He was a core member of World Development Report 2013: Jobs. He was also President of International Association of Agricultural Economists (IAAE) from 2009 to 2012. He received Purple-Ribbon Medal from the Japanese Government in 2010.

He has been conducting comparative analyses on cluster-based industrial development, poverty and income distribution, land reform and land tenure, and Green Revolution between Asia and Africa. He published 123 articles in refereed international journals and 23 coauthored and coedited books. He is Fellows of International, American, and African Association of Agricultural Economists.