The goal of this article is to draw attention to the cluster development as a successful model of strengthening of the competitiveness of the economy. World experience shows that we have to carefully approach this idea.
For the first time the idea that the progress of national economy depends, at least partially, on geographic concentration of the production spheres was announced more than a century ago by Alfred Marshall, who claimed that the growth of the economy of Great Britain and its leadership in the 19th century was due to the development of geographically localized production spheres such as textile factories in Lancashire, pottery production in Staffordshire, machinery in the West Midland and others.
According to Marshall, the reasons for this concentration can be the availability of raw materials and natural resources, proximity to markets, or just random fortuitous of historical circumstances. But, once having appeared, such clusters and manufacturing enterprises in the same geographical specialisation started as a single organism. Marshall saw the reasons for the growth and enhancement of these industrial clusters in bringing their various support industries, providing resources, creation and growth in these agglomerates of skilled labor, the development and application of specialized technologies and equipment, accumulation of knowledge and technology.
In addition, he said special atmosphere, traditions and practices associated with the production had prevailed in the industrial agglomerates, which later turned to the institute of social and cultural devices in the territory.
Exactly a century later, in 1990, another outstanding economist, Professor of Harvard Business School Michael Porter put forward the idea of cluster development in the theory of competitive advantage. Brief meaning of the theory is that the source of sustainable growth in industrial production and in the economy as a whole is not mainly natural economic advantages such as the territory's population, natural resources, etc., but the advantages gained by companies as a result of strong domestic competition. Competitive advantages of company is an ultimately strong demand for its products inside and outside the country. The Diamond model reflects the relationship between the four factors affecting the growth of competitive advantage:
• Strategy, structure and competition companies (competitive environment dictates the need for flexibility, and stimulates sustainable investment in the modernization of production capacity and resources);
• factor conditions (resources - human, capital and infrastructure - physical, administrative, information, scientific);
• demand conditions (large and cantankerous demand for products forces companies to continually seek ways to improve quality by using new ideas and technologies);
• related and service spheres (a sufficient number of qualified suppliers and assistance of the manufacturer in an effort to make export products).
Porter believes that the nature of these four factors form clusters, and geographic concentration of competing companies strengthens links between factors.
According to Porter, cluster is a geographic concentration in certain economic activities of the group of interconnected companies, specialized suppliers of equipment and materials, service providers (legal, IT, accounting, advertising, etc.), research centers (universities, scientific laboratories), and associated structures related to this spheres. All these producers, consumers and suppliers are linked with commonalities and complement each other (complementarities).
Clusters occur when enough resources and knowledge concentrate, which reached a critical threshold, become a pivotal role in the economic sphere, with some critical sustainable competitive advantage in the region or even globally. Here there are some examples of successful and worldwide cluster models: Silicon Valley - computers and biotechnology, Singapore - Logistics, Toulouse - aerospace industry, Bangalore - outsourcing of software production, Hollywood - film, finally, the City of London - Finance. Impressive.
According to the rating of Global Competitiveness Index, published in the 2008-2009 report of the World Economic Forum, Azerbaijan ranks the 107th on the criterion of cluster development amongst 134 member countries.
The analysis showed that the Azerbaijani government can simultaneously move in two directions.
First: taking steps aimed at liberalizing the economy, creating a climate where the appearance of cluster systems gain the natural form, and in this case the question whether we need cluster losses its meaning. Recently, a number of measures have been taken in this direction: "single window" business registration at the Ministry of Taxes, "single window" passage of commodities through border customs offices, work is carried out on the project to create a single real estate registration system, a law on special economic zones was adopted. Finally a decree has already been prepared on the reforms in the sphere of licensing and permitting for small and medium businesses. This is a very important step to support entrepreneurship and reduce corruption.
The second direction is sponsoring the creation of scientific (educational) innovation centers like "Knowledge Town" or "Internet City" in Dubai. Intensive exchange of information and knowledge could occur in such centers, and with sufficient resources, they could transform a cluster of high technology and knowledge.
With regards to the transport, Azerbaijan has a strong premise in the form of geographical situation: transportation of oil from the eastern shores of the Caspian Sea to the West, the flow of goods and supplies from Europe through Russia to Iran and onward to the Middle East and India through the transport corridor North - South; construction of a new international trade port is profitable for the country, which gives an opportunity to become a hub of transport and transit center of Caspian region, where regional cluster can be created like Singapore, say logistics. Without any significant natural resources and territory, using its strategic location at the junction of sea and air routes, working seven days a week and 24 hours a day, today Singapore is the largest cluster in the Asia-Pacific region and in the world, where there are more than 3,000 logistics companies, local and international companies, with strong infrastructure and IT-base, making huge profits for the country every year.
Some time ago, Azerbaijani Parliament ratified a bill on special economic zones. Chairman of the parliamentary commission on economic policy Ziyad Samedzade said that the zones will not solve all the problems, and it needs to take advantage of all opportunities, including the establishment of SEZ to ensure dynamic and stable economic development.
