The Advantages of Industrial Clusters in Prolonged Economic Recession

Industrial clusters have various forms and in their essence, are very dynamic concepts. According to Porter, they are spatial concentrations of interrelated enterprises, suppliers, knowledge workers, universities and research and development institutions, that establishing and maintaining intense linkages between them, create their competitive advantages in relation with the enterprises that are out of the agglomeration (Porter, 1989).In Europe, industrial clusters draw much from the economic and cultural tradition of the regions. In some cases, the advantage comes from the natural resources of the regions, and there are many examples of agglomerations of knowledge based industry clusters around notable university centers or regions like that around the University of Cambridge in England. (Wissema, 2008). Industrial clusters allow the companies to be more productive and more innovative. The Industrial clusters develop unique knowledge and skills difficult to be replicated. Thus, the Industrial Clusters contribute to the competitive advantage of the region in which they exist, and this seems to be case even in the situation of a prolonged recession and economic crisis. In this paper we explore the most probable behavior of the members of the clusters in the situation of prolonged economic crisis, and especially the level of their readiness to trade off the conducive climate of the cluster with a pursue of other regions that offer significant tax reductions. In other words, we argue that the advantages of being a member of a cluster, in fact, are crucial for survival and even a relative growth and that the members of the successful clusters will not be ready to swap these advantages with the tax incentives offered by various regional or state authorities, elsewhere