Cluster Development



What are Clusters?

Clusters can best be described by Michael Porter (1998) where he defines them 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 are generally a natural occurrence, and the concept of clustering businesses to gain competitive advantage is not new. Activities are usually involved in areas such as:

  • Supply Chain Development
  • Market Intelligence
  • Training
  • Research and Development Initiatives
  • Marketing

Why Cluster?

Today’s economy is about speed, flexibility and connectivity in an environment where innovation and economic growth aregeographically concentrated. The emphasis is on the development of cities, regions and their eco-cluster systems and this bottom up approach reflects that, while many companies come and go, strong and evolving clusters provide economic stability to a region (Ifor Ffowcs- Williams, 2012).

Internationally, cluster based economic policy has grown significantly and is now a powerful tool for economic development, and clusters are being used as platforms for joint action.

South Australia is unique, and the South Australian Government is focused on driving greater innovation and collaboration within industry.

In 2014 the University of Adelaide’s Entrepreneurship, Commercialisation and Innovation Centre (ECIC) launched the Cluster Observatory, with support of the South Australian Department of State Development. The centre operates in collaboration with the Stockholm School of Economics and seeks to become a focal point for Australian expertise and research on industry clusters.

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How Can we Help?

Building a cluster can be summarised as 5 phased, with 12 steps as shown by this diagram supplied by Ifor Ffowcs-Williams:

Regional Development Australia Limestone Coast (RDALC) can provide expertise and advice in the development of business clusters by:

  • Making the connections between organisations;
  • Helping to facilitate inter-organisational relationships;
  • Showcasing innovation to aid cluster development;
  • Assisting regional businesses to access state and federal government services and other programs to increase further collaboration and innovation.


Ifor Ffowcs-Williams. 2012. Cluster Development the Go-To Handbook. New Zealand: Cluster Navigators Ltd.
Government of South Australia. 2013. Why join a business cluster? South Australia: Primary Industries and Regions South Australia.