Increasing interest in clusters among researchers and economists is only one aspect of a new approach to economic research and policy, one that supplements the macroeconomic and legal conditions necessary to achieve economic progress with microeconomic foundations. This report presents an overview of the current research on cluster-based economic development. First, it looks at key conceptual foundations of the cluster approach: the definition of clusters, different types of clusters, economic benefits that clusters provide, and factors that influence cluster performance. Second, it examines some of the research testing the conceptual framework. These quantitative tests address some current public debates about the role of clusters and indicate avenues for further theory development, concentrating on efforts to empirically identify clusters, track their evolution over time, and test the linkages between clusters and economic performance. Third, the report turns to how we can translate our current knowledge of clusters as an empirical phenomenon into effective policies. Ultimately, it aims to provide policymakers and researchers with a concise assessment of our view on where we are with clusters and what lies ahead.
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