Local Economic and Employment Development (LEED Programme)

LEED-CEI-EBRD project on Industrial Districts and Local Clusters 2001-2002


Clusters in Transition Economies - Strategies for Innovation and Growth
at a Cross-National Perspective

The project "Clusters in Transition Economies" features five seminars taking place over the period of 2001- 2002 in Slovenia, Slovakia, the Czech Republic, Poland and Hungary by the Local Economic and Employment Development (LEED) Programme, OECD, in conjunction with the Central European Initiative (CEI) and the EBRD.

The first seminar took place on 19 November 2001 in Ljubljana, Slovenia at the Ministry of Economy. Results of the seminar were presented at the Annual Economic Summit of the Central European Initiative in Trieste, Italy, on 23 November 2001. The second seminar took place in Bratislava, Slovak Republic, on 18 February 2002, the third one on 26 March in Prague, Czech Republic and the fourth one in Warsaw, Poland on 22 April. The fifth and last seminar will take place on 29 May in Budapest, Hungary.

The Concept of Clusters:

Clustering is the tendency of firms in related lines of business to concentrate geographically. A cluster can contain a small or large number of enterprises, as well as small and large firms in different ratios. Clusters vary widely regarding the number of participants and their degree of organisation. Clusters exist in nearly all economies.
Clusters occur due to proximity to markets, in the presence of specialised labour, inputs (natural resources, information) and equipment/ service suppliers, and due to the availability of infrastructure. By clustering together, firms achieve economies of scale in production and drastically lower their transaction costs. They gain competitive advantage in a globalised economy.

The Importance of Clusters:

Policymakers have identified industrial clusters as potential motors of economic growth and innovation. Indeed, clusters account for a surprisingly high percentage of national output and employment of each economy and tend to be especially present in affluent regions. Due to their unique features, clusters can promote innovation through the sharing of information through formal and informal channels, the constant training of a specialised workforce and through innovative spin-offs.
This interest in clusters has given rise to a wide variety of policies involving a broad range of governmental and non-governmental actors. The OECD has worked on as set of best practices to enhance efficiency of the various programmes and to encourage dialogue among participants of the economic process.

The Central European Initiative and the OECD/ Local Economic and Employment Development Programme:

The Central European Initiative (CEI) was founded by Austria, Hungary, Italy and Yugoslavia in 1989 and has grown to include sixteen participating countries. The primary goal of the CEI is to promote European integration and to assist non-EU member countries in their political and economic transition process. CEI has established a series of partnerships with other international and regional bodies, including, among others, the European Union, the OSCE, the OECD and the EBRD. CEI activities are paid for by voluntary contributions of its members through a special Trust Fund at the EBRD.
At present, co-operation between the OECD, the EBRD and the CEI has been with the Local Economic and Employment Development Programme (LEED) covering Industrial Districts and Local Clusters, as well as Women Entrepreneurship.

LEED/ CEI Seminars on Clusters, 2001-2002:

A series of seminars grouped around the topic of clusters in transition economies in central and eastern Europe will build on the work the LEED programme carried out in OECD countries on local clusters, industrial districts and networks of enterprises. The first seminar was held in Ljubljana, Slovenia, on 19 November 2001. The aim is to establish a map of existing industrial clusters in Slovenia, Hungary, Czech and Slovak Republic and Poland, to exchange information about best practices and to further cross-border co-operation. A final conference in Trieste, Italy, 2002, will provide a synopsis of the findings.

Recent and Upcoming LEED Events on Clusters:

East-West Cluster Summit, Trieste, 28-31 October 2002 (in preparation)

International Conference on Territorial Development, 28-30 January 2002, organised together with the French government

CEI Summit, Trieste, 21-24 November 2001, Workshop on Local Development Systems (together with IMEMO, SEED, Informest and the Province of Milan)

World Congress on Local Clusters, La Villette, Paris, 23-25 January 2001, organised together with the French government

CEI Summit, Budapest, November 2000, Workshop (jointly with the Italian Agency Informest) on Enterprise Clusters

Bologna Ministerial Conference, OECD, June 2000, the LEED Programme organised and managed the Workshop 2, dedicated to Local Clusters and the Internationalisation of SMEs.

Selected Publications:

Clusters in Transition Economies Newsletter II (in preparation), summing up the experiences of the cluster seminar in Bratislava, Slovak Republic, 18 February 2002

Clusters in Transition Economies Newsletter I, summing up the experiences of the cluster seminar in Ljubljana, Slovenia, 19 November 2001

Clusters in Transition Economies, Note prepared by the Secretariat for the LEED Directing Committee, 5-6 November 2001

Fostering Entrepreneurship, OECD publication, 1998

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