Clustering Policy and Its Effects on Rural Entrepreneurship Over 20 Years

The concept of geographic clustering of businesses has evolved over time (Charles, 2022). However, related policies have tended not to focus on rural development needs or rural entrepreneurship, which raises questions as to the applicability of cluster policies for future rural development. The rationale for these approaches is that clusters or agglomerations of businesses operating in the same (or related) markets create critical mass and economies of scale and scope, through external economies, which in turn create regional competitive advantage from specialisation (Porter, 1996). Defined by a geographic (usually regional) concentration of related businesses, clustering leads to knowledge spillovers, shortened supply chains, local skills development and increased productivity.