Competition and cooperation in industrial clusters: The implications for public policy

Alfred Marshall believed that, while the benefits of clusters resulted from cooperation between firms, competition was an important driving force. In contrast, contemporary theories of clusters place most emphasis on collective action. This article seeks to distinguish processes of competition and cooperation within clusters, through a critical reading of different theoretical approaches. This distinction has important implications for the scale and nature of public policy. An emphasis on competitive processes implies a more macro-economic role for public agencies in seeking to raise investment in innovation while the fostering of cooperation implies measures to support decentralized public-private research collaborations.