Creativity, Clusters and the Competitive Advantage of Cities

Among the many important contributions made by Michael Porter in The Competitive Advantage of Nations was to call attention to the central role played by industrial clusters in the process of economic development (Porter, 1990a). He was not the first to identify the economic advantages of clustering of firms and industries, what economists refer to as “agglomeration economies.” Here he followed in the great tradition of Alfred Marshall (Marshall, 1890) and later Jane Jacobs (Jacobs, 1961). But what made his work so influential was how he identified these clusters empirically and was able to specify their role in economic development in a way that captured the attention not just of other economists and academics but also of policy makers in the real world.

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