Industrial Clusters & the Software Industry in Ireland.

Have a little read: ... Industrial Clusters & the Software Industry in Ireland The introduction of industry cluster: In the time of globalization, every product, service or business activity faces global market opportunities and global competitors as well. As most small and medium- sized enterprises (SMEs) have been depending on their own market segment or niches, global competition can not only threaten their existing base and competitive strength. They may find their potential market chances and business partners in unknown countries or territories. Nevertheless, it must be understood that their existence and competence were also strongly supported by regional or local business concentration and networking, which is based on deep social division of labour and specialisation, including typical subcontracting system controlled by a big manufacturer, as well as industrial districts where small manufacturing or trading firms come all together. Mostly SMEs cannot survive if they simply depend on own limited resources and specialised skill and technological capabilities alone. Empirical research works on the importance of regional industrial agglomeration and local networking. Among them, the most popular one is M. Porter's ''industrial cluster' thesis, which is based on his own 'diamond theory' and economic geography principles. According to Porter's (1990, p. 149) definition," a cluster consists of industries linked through vertical (buyer/supplier) or horizontal (common customers, technology, channels) relationships". Key features of clusters are internal networking, linkages and formal and informal interactions. A common strand in both the economic and sociological literature is the notion of local linkages forming a defining geographic basis of a cluster. However, the paradox of economic geography during an era of global competition is that changes in technology and competition have diminished many of the traditional roles of location. Yet, Porter finds, clusters, or geographic concentrations of inter-connected companies, are a striking feature of virtually every national, regional, state and even metropolitan economy. The prevalence of clusters reveals important insights about the microeconomics of competition and the role of location in competitive advantage. Even as old reasons for clustering have diminished in importance with globalization, new influences of clusters on competition have taken on growing importance in an increasingly complex, knowledge-based, and dynamic economy. Clusters represent a new way of thinking about national, state, and local economies, and they necessitate new roles for companies, government, and other institutions in enhancing competitiveness. Many governments and organizations throughout the world deployed new policies to stimulate own regional economies and to strengthen global competitiveness, depending on 'industrial cluster policy'. As a result, new expected players are not necessarily existing local SMEs and skilled craftsmen, but universities, research institutes, or public institutions which can be linking together and creating critical mass for further innovation and industrial development. Critical success factors for clusters Due to growing global competition, the change of customer needs, the rapid progress of IT (Information Technology) and so on, Industrial Clusters have been affected greatly in terms of the scale of production, the number of enterprises and employees. Many Industrial Clusters show a trend of stagnation. Some of Industrial Clusters declined in