Clusters have emerged as an industrial organisational form recognised as having a superior ability than that of single firms operating in isolation to foster national economic development and growth. However, there is little agreement about the way to define industry clusters and a lack of consensus regarding the determinants of cluster formation and operation and, the analysis of clusters. This paper begins by marshalling the different definitional approaches of clusters to produce new thinking about these entities. It examines the definitional concepts together with the identified elements and features of clusters as outlined in the literature to develop an alternative cluster classification and a new framework for analysing clusters. The paper concludes that the notion of a value adding web establishes a new way of conceptualising clusters and suggests that the resource-based view of the firm together with dynamic capabilities view provide a productive means of analysing the competitive advantage of clusters
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