The Impact of Clusterization on the Development of Small and Medium-Sized Enterprise (SME) Sector

By Navickas, Valentinas; Malakauskite, Asta | Journal of Business Economics and Management, September 2009 | Go to article overview

The Impact of Clusterization on the Development of Small and Medium-Sized Enterprise (SME) Sector


Navickas, Valentinas, Malakauskite, Asta, Journal of Business Economics and Management


1. Introduction

In the last decades, the concept of clusters has become popular and widespread in both theory and practice. The clusters of small and medium-sized enterprises (SMEs) have proven to be among the most dynamic ways to promote the growth of regional economic systems. As small and medium-sized firms were acknowledged as a source of jobs and income, they have gained an important position in the economic development agenda. Hereby, clusterization policies have been conceived as a framework to induce the growth of SMEs and to optimize resources used to support them. Creating clusters could help SMEs to overcome R&D, production, and marketing obstacles, and allow them to compete with large companies in distant foreign markets.

The aforementioned positive effects of clusterization would greatly contribute to the increase in the competitiveness of SMEs.

The object of the study: the competitiveness-related impact of clusterization.

The aim of the study is to investigate the impact of clusterization on the development of SME sector.

The objectives of the study are:

1. To analyse the conception and forms of interorganizational cooperation.

2. To analyse the coherence (link) between clusterization and competitiveness of economic sectors.

3. To evaluate the benefits of clusterization to SMEs.

The methods of research: systematic-logical analysis of scientific literature, synthesis, holistic approach.

The problem of research. The concept of clusters (clusterization), as well as the role of interorganizational relations have been analysed in various scientific studies, including Gundlach et al. (1995), Ylinenpaa

(1997), Dacin et al. (1997), Wildeman (1998), Mavon do and Rodrigo (2001), Varamaki (2001), Reuber and Fisher (2001), Park et al. (2002), Ekelund (2002), Rodriguez and Wilson (2002), Jones and Tilley (2003), Parrilli (2007), Pesamaa and Hair (2007), Wang and Meng (2007), Gulati and Sytch (2007), Sheedy (2007); Oliveira (2008), Damaskopoulos et al. (2008), Banyte, Salickaite (2008), Aydogan (2009). However, most of these scientific studies concentrate on interorganizational relations as a means to increase the competitiveness of large-scale networks that embrace grand corporations and fail to accentuate the growing importance of SME clusters, while the other studies analyse the development of SME sector separately from the concept of cluster-related competitiveness and its global importance. Therefore, the novelty of the research lies in the analysis of the clusterization benefits for SMEs.

2. The forms of interorganizational relations

Companies tend to cooperate in order to achieve the effect of synergy in various fields: R&D, manufacturing (production), marketing, innovation, etc. The forms of cooperation range from partnerships and alliances to networks, associations, clusters, and complex technological platforms.

Business partnerships are generally perceived as a mode of steady cooperation among vertically integrated companies. As opposed to spontanic occasional relations of companies and organizations, partnerships result in an increased trust and more efficient coordination of activities (Edelman et al. 2004; Ylinenpaa 1997). The main incentives to form partnerships are the possibilities to:

* reduce operation costs;

* increase personnel qualifications;

* improve technological base;

* advance in innovation field;

* create new products and businesses;

* increase sales and competitiveness.

Partnerships often are informal; thus the incentive to confirm the cooperation by a formal agreement is the first step to forming a strategic alliance. Companies that participate in this agreement have to make strategic decisions about their obligations and rights, the division of possible revenues obtained from their cooperation, and other important issues (Gundlach et al. …

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