Clusters are not an entirely new economic phenomenon. In England, the famous economist Alfred Marshall identified the importance of the textiles cluster around Manchester and the metalworking cluster of Sheffield back in the 19 th century. But there is now a rapidly growing interest by governments in this phenomenon, which has not been sufficiently recognised in recent years.
Clusters are local networks of firms in related industries.
They are found throughout the world, in affluent regions and in poor ones, in OECD members and in non-Members. They are not just local concentrations of industry, but places where there are real interactions between local firms and between firms and institutions. There is mutual support and coordination, which is generally summed up in the ideas of 'social capital' and 'trust'. In clusters, the transaction costs of dealing with suppliers and collaborators are low because trust is high. Even where firms have not worked together before they have information on each other and informal ties that nurture trust.