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Michael Porter defines clusters as "Geographic concentrations of interconnected companies, specialised suppliers, service providers, firms in related industries, and associated institutions (for example, universities, standards agencies, and trade associations) in particular fields that compete but also co-operate"

Clusters lead to higher growth in three main ways. First, they raise productivity by allowing access to specialised inputs and employees, enhancing access to information, institutions and public goods and by facilitating complementarities. Second, they increase firms' capacity for innovation by diffusing technological knowledge and innovations more rapidly. Moreover competitive pressure within each cluster increases firms' incentives to innovate. Thus, they could be described as types of 'learning' region, showing higher rates of technological and organisation innovation and retaining their adaptability to unexpected exogenous changes. Third, clusters stimulate higher rates of new business formation, as employees become entrepreneurs in spin-off ventures, since barriers to entry are lower than elsewhere.

SONAS Innovation are one of the few experts in Europe in successful cluster establishment. Below, we detail two sample projects thriving in one of the oldest areas of Dublin, and in the west of Ireland.

 Shannon Development
 The Digital Hub