0.1 Regions and clusters  (Page 3/15)

This suggests that both ‘East Wales’ and the ‘West Wales and Valleys’ regions ‘qualify’ as regions with a knowledge-based economy, meaning that there is an existing knowledge-economy to be supported and developed.

‘West Wales and Valleys’ includes the Wales Spatial Plan region of Swansea Bay, Waterfront and Western Valleys, which is developing its own Knowledge Economy strategy as part of the Spatial Planning process. The neighbouring region of ‘East Wales’ is also developing a strategy for development of the Knowledge Economy using the services of an external commercial consultancy (Local Futures 2006).

The research and strategy development of the South West Wales effort is being driven by the Knowledge Economy Research Group at Swansea University. This work has focused on identifying regional challenges, relating to human capital, innovation and infrastructure, and developing recommendations and actions through use of regional and international experts (K-Group 2006 and Davies et al. 2007).

This approach to developing ‘regional’ knowledge economy strategies has been adopted in the United States, Europe and the UK (Boddy 2005).

Clusters

Economic development based on sole, albeit sometimes large, investments are not a recipe for sustainable knowledge based economic development. To ensure enterprise becomes embedded and sustained within the region it must form links and dependencies upon and amongst neighbouring firms.

All firms in a region have a certain level of interdependence, in what are ultimately aggregated to represent regional, national and international economies. However, where geographically concentrated groups of interrelated businesses and other organisations participating in a certain field exist, they are regarded as a cluster (EU 2003).

Knowledge-based clusters

While the term ‘cluster’ has been increasingly used over recent years, the concept has been apparent for centuries and acknowledged for some time, though perhaps subject to different terminology. Rocha (2004) for example charts how academics have studied the phenomenon since the ‘Industrial Districts’ described by Marshall in the 1890s, all the way through to Porter (1990) at the end of the last millennium. Rocha’s work cites early examples of silk traders in China, along with the coming together of suppliers and manufacturers during the industrial revolution, together with their contemporary equivalents, such as the software companies of India or the call centres of Sydney.