A Porter's cluster or competitive cluster is a geographical location where:

• enough resources and competences amass and reach a critical threshold,
• giving it a key position in a given economic branch of activity,
• with a decisive sustainable competitive advantage over others places, or even a world supremacy in that field.

Generally two types of competitive clusters, based on different kinds of knowledge, are recognized:

• Techno clusters - These clusters are high technology-oriented, well adapted to the knowledge economy, and typically have as a core renowned universities and research centers.
• Historic knowhow-based clusters - These are based on more traditional activities that maintain their advantage in know-how over the years, and for some of them, over the centuries. They are often industry specific.

The concept is named after Michael Porter, a Harvard professor who developed it. He claims that clusters have the potential to affect competition in three ways:

• by increasing the productivity of the companies in the cluster,
• by driving innovation in the field
• by stimulating new businesses in the field

Examples

Well known examples are

• the Silicon valley, in California in the field of computer technology,
• Bangalore, in India, for software outsourcing,
• Paris, in France, for Haute couture,
• Toulouse, in France, for aerospace.
• Cambridge, in the UK, for biotechnology and electronics

See also

• Cluster effect
• Spatial economics