Strategic development of network clusters

Purpose The purpose of this study is to use current literature in conjunction with the insights from a detailed analysis of current practice to clarify and extend the knowledge of networks of clusters. Design/methodology/approach This research is an exploratory study of cluster formation and global competitiveness. By applying cluster and network theory, this study examines critical elements of high‐technology networks and clusters. A case study of two clusters in Taiwan and two in China reveals both intra‐ and inter‐cluster network relationships. Findings This research concludes that networks of clusters do exist and they carry potential advantages for both firms' and clusters' competitive advantage and innovation. Close network relationships and interdependences of industrial clusters have contributed significantly to the competitiveness of high‐technology clusters in the Asia‐Pacific region. Research limitations/implications Further research is needed to determine what conditions best promote inter‐cluster networks and when such networks are likely to generate the most value. Practical implications First, the relationship among firms in an industrial cluster may be viewed as not only extended supply chains but also as more complex network forms. Firms in a cluster may work together to co‐evolve for the purpose of enhancing competitiveness. This process is worthy of further attention from managers looking to more rapidly develop the competitiveness of their firms. Second, the industrial clusters offer a relatively favorable environment that allows the participating firms to more easily pool the resources, investments, and synergies necessary for them to become competitive in the global arena. Third, to the extent that specialization may increase comparative advantage, an industrial cluster can concentrate firms and industries in a region dedicated to a particular product or competence. Finally, once a cluster successfully pools the resources and develops the core products and competences, the phenomena of networks of clusters is likely to emerge for participating parties to share complementarities across both national and geographical boundaries. Originality/value Most studies on high‐technology clusters are focused on intra‐cluster interaction. This study broadens the scope of analysis to explore the inter‐cluster network structure that enhances global competitiveness of both firms and clusters in an effective and efficient manner. This study offers initial empirical evidences and a number of important insights to assist managers and policy makers in enhancing global competitive advantage.