Clusters, industrial policy and firm strategy

Increasingly, govemments and firms take clusters of related business as a starting point to formulate policies and strategies, which aim at enhancing innovation. There appear, however, to be quite some different conceptions of what clusters are, In the first part of this paper and attempt is made to clarify the cluster concept by defining the relevant dimensions of clusters. In the second part, each of these dimensions is related to possible industrial policies and firm strategies. Practical illustrations will be given from different European countries and firms. The dimensions and related policies and strategies form a menu of possibilities from which actors can choose those elements that are most relevant for their specific situation. Thus, tailor-made policies and strategies can be devised and implemented.