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