Types of Clusters

Not all clusters are alike. Regional clusters (Silicon Valley, Route 128) thrive on geographic proximity—firms benefit from face-to-face networks, shared labor pools, and local institutions. Sectoral clusters (German Mittelstand, Italian ceramics) are defined by industry specialization, often spanning multiple regions but connected by supply chains and industry associations. Innovation clusters (Cambridge biotech, Shenzhen electronics) prioritize R&D intensity and knowledge creation, anchored by universities or national labs. Each type has distinct strengths: Regional clusters excel at rapid iteration and entrepreneurship. Sectoral clusters achieve deep technical expertise and incremental innovation. Innovation clusters drive breakthrough discoveries and radical technologies. Clean tech implications: Offshore wind clusters (Denmark, UK) are regional (port proximity matters). Battery clusters (China, South Korea) are sectoral (lithium supply chains). Fusion energy clusters (ITER, Commonwealth Fusion) are innovation-driven (plasma physics labs). Policy must match cluster type: Regional clusters need infrastructure; sectoral clusters need trade coordination; innovation clusters need R&D funding.