Business environments and cluster attractiveness to managers

The sustainability of business cluster groups is examined in the case of four cluster initiatives linked to the New Zealand timber industry. The primary objective is to determine the contingent influences shaping the level of support obtained by cluster projects and the distribution of cluster benefits among potential participants. The forest products industry was chosen for the study as this industry has produced cluster projects in different regions and because firms in this industry have a range of network opportunities as well as joining a cluster group. Progress of the projects is assessed through interviews with cluster participants. Two of the four groups have achieved some impact on business development and have sustained support. Two groups have failed to become significant and have lost participation. The attributes of the more successful clusters are related to: (1) enterprise characteristics and extent of reciprocal business relations; (2) the motives for participation; and (3) the relative appeal of cluster participation versus membership of a national industry group. These characteristics lead to the development of two models of enterprise activity conducive to cluster formation distinguished by the extent of firm heterogeneity and business interaction. These findings raise a number of challenges for the advocacy of business clusters as a tool for enhancing business competitiveness.