Academic journal article Innovation: Organization & Management

Seeing Trees and Forests: A Comparative Evaluation of Business Clusters and National Industry Associations in the New Zealand Forest Sector

Academic journal article Innovation: Organization & Management

Seeing Trees and Forests: A Comparative Evaluation of Business Clusters and National Industry Associations in the New Zealand Forest Sector

Article excerpt

ENTERPRISE CLUSTERS AS ONE FORM OF COLLECTIVE ASSOCIATION

Location in a business cluster is claimed to enhance innovation and enterprise development (Porter, 2000; Benneworth, 2002; Raines, 2002; Pinch et al., 2003; Rosenfeld, 2005). Proximity to industry peers, it is argued, gives access to agglomeration advantages that are not available to enterprises located in isolation or among unconnected activity. Support for this proposition is reflected in the efforts of public agencies to increase awareness of the existence of business clusters (Department of Trade and Industry, 2001) and in many industry-based projects to promote membership-based cluster groups (Sölvell et al., 2003). Equally, there is evidence that clusters have no necessary impact on business performance (Malmberg et al., 2000; Beaudry and Breschi, 2003; Braunerhjelm and Johansson, 2003; Cingano, 2003) or that they have significance for independent firms only (Beardsell and Henderson, 1999) or that they encourage enterprise start up but not survival (Sorenson and Audia, 2000; Stuart and Sorenson, 2003). Much of the advocacy of cluster advantage assumes that they provide unique opportunities for businesses to engage in collaboration with other businesses. Such a view can overlook that participation in a national industry association has been an option for many enterprises (Bennett, 1998; Traxler, 2000). Cluster promotion increases the opportunity for collective activity but small businesses have limited resources to devote to discretionary activities. Providing support for localised collaboration may result in reduced involvement in other collective associations. This implies a need to consider net outcomes rather than examining cluster participation in isolation. Such information may correct the implicit assumption that enterprises outside a cluster operate in a starkly different environment to those within a cluster.

Determining the spatial reach of cluster advantages is a further reason to investigate different sources of collaborative opportunity. The assessment of cluster significance tends to be polarised. One view is that clusters are a geographical phenomenon and that a standardised way of identifying potential clusters is needed before claims about their significance can be made (Martin and Sunley, 2003). Another view equates clusters with business interdependence that can be investigated at any spatial scale from individual localities to transnational regions (Porter, 2000; 2003; Feser and Luger, 2003). These outlooks produce conflicting assessments of the importance of business clusters. Viewing clusters as a specific geographical entity, identified through rules about the level of industry concentration and specialisation, can show that clusters are rare and not necessarily associated with economic growth (Crouch and Farrell, 2001). On the other hand, as all parts of an economy are ultimately inter-connected, the business interdependence perspective can always find scope for promoting cluster development (Feser and Bergman, 2000; Porter, 2003).

Seeking to reconcile these two perspectives may reduce undue scepticism or excessive optimism about clusters. Exploring enterprise managers' perception of the activities supported by national versus local collaboration is one way of seeking reconciliation. This study makes a contribution to this area of enquiry by presenting evidence drawn from a sample of enterprises associated with business clusters in New Zealand's forest and timber processing industries. This sector provides opportunity to examine how managers compare the value of local (cluster) versus national (industry association) forms of association. There is a history of high levels of participation in national forest industry groups that are differentiated by the activity and type of enterprise represented. More recently, a government assistance programme has encouraged the formation of regionally-based cluster groups (Perry, 2004). …

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