Industrial ClustersIndustrial Clusters ：： CaseCasess

IMBAIMBAMay 22, 2009May 22, 2009

Te-Kuang ChouTe-Kuang Chou

Why does a nation Why does a nation achieve international achieve international

success in a particular success in a particular industry?industry?

Determinants of National Determinants of National Competitive AdvantageCompetitive Advantage

Determinants of National Determinants of National Competitive AdvantageCompetitive Advantage

Factor ConditionFactor Condition The nation’s position in The nation’s position in factors of production, such factors of production, such as skilled labor or as skilled labor or infrastructure, necessary to infrastructure, necessary to compete a given industry.compete a given industry.

Determinants of National Determinants of National Competitive AdvantageCompetitive Advantage

Demand ConditionDemand Condition The nature of home The nature of home demand for the industry’s demand for the industry’s product or service.product or service.

Determinants of National Determinants of National Competitive AdvantageCompetitive Advantage

Related and supporting Related and supporting industriesindustries

The presence or absence in The presence or absence in the nation of supplier the nation of supplier industries and related industries and related industries that are industries that are internationally competitive.internationally competitive.

Determinants of National Determinants of National Competitive AdvantageCompetitive Advantage

Firm strategyFirm strategy The conditions in the nation The conditions in the nation

governing how companies argoverning how companies are created, organized and mane created, organized and managed, and the nature of domeaged, and the nature of domestic revalry.stic revalry.

The German Printing Press The German Printing Press IndustryIndustry

The international mobility of The international mobility of technology and skilled personal.technology and skilled personal.

Government efforts to attract Government efforts to attract investment.investment.

The emergence of domestic rivalry.The emergence of domestic rivalry.Specialized factor creation Specialized factor creation

(vocational schools, universities).(vocational schools, universities).Sophisticated home demand.Sophisticated home demand.German printing industrial cluster.German printing industrial cluster.

The American Patient The American Patient Monitoring Equipment Monitoring Equipment

IndustryIndustryEarly and sophisticated Early and sophisticated American demand.American demand.

Related and supporting Related and supporting industries.industries.

Active domestic rivalry.Active domestic rivalry.Distracted and set back by Distracted and set back by waves of acquisitions.waves of acquisitions.

The Italian Ceramic Tile The Italian Ceramic Tile IndustryIndustry

Home demand (tradition and local taHome demand (tradition and local taste, climate, high price of wood, matste, climate, high price of wood, material of building).erial of building).

Lacking in raw materials, productioLacking in raw materials, production equipments, heavy oil.n equipments, heavy oil.

Sassuolo rivalry (information spread Sassuolo rivalry (information spread rapidly; copyrights and patents were rapidly; copyrights and patents were hard to enforce; every one knew eachard to enforce; every one knew each other and lived closely).h other and lived closely).

All kinds of third-party service and sAll kinds of third-party service and showrooms.howrooms.

The Japanese Robotics The Japanese Robotics IndustryIndustry

Early and sophisticated home demand Early and sophisticated home demand (shortage of skilled workers and raising wage; (shortage of skilled workers and raising wage; labor unions were willing to cooperate with labor unions were willing to cooperate with robot; the emergence of world class Japanese robot; the emergence of world class Japanese manufacturers in a wide range of industries; manufacturers in a wide range of industries; cutting-edge Japanese manufacturers were cutting-edge Japanese manufacturers were sophisticated and anticipatory buyers and sophisticated and anticipatory buyers and major spur to continuous innovation).major spur to continuous innovation).

The growing Japanese industrial clusters.The growing Japanese industrial clusters. Domestic rivalry (a national feverishness).Domestic rivalry (a national feverishness). Government played a modest role: improving Government played a modest role: improving

demand conditions and stimulating factor demand conditions and stimulating factor creation.creation.