Industry Cluster is a phenomenon of geographic concentration of competing but collaborating and interdependent businesses within a value chain as well as supporting and service providers.
Cluster approach is an organized effort to increase the growth and competitiveness of a cluster within a region, involving cluster firms, government and/or the research community. It has increasingly been recognized as an effective approach in industrial development and promotion of micro, small and medium enterprises (SMEs) as it encourages competitiveness. The clustering process necessitates the operation of upstream (raw material suppliers, production inputs) and downstream (logistics, value-adding, packaging and marketing) economic activities to support the whole value-chain.
Although industry clusters have long been a feature of the economic landscape of many countries, especially of the developed ones, “industry clustering” as a deliberate local, regional or national economic development strategy is just a relatively new phenomenon in countries such as the Philippines. Developed countries are driven by clusters of industry agglomeration.