Benefits for SME in industrial cluster & the role of government in cluster development

SMEs have their own nature weakness. However companies inside industrial cluster can benefit from numerous positive location-specific externalities and avoid being in a inferior position. Government can play an important role in developing cluster. Cluster strategy has proved to be capable of rapid economic growth, sustainable leadership in export markets, significant employment generation and sustained technological progress. When supporting cluster, governments should grant the preferential policies to technology and industry instead of to district, not just 'locating firms together'. It is very important to connect local and inter-regional industrial linkages and the channels of technology and knowledge transfer, to form regional brand and regional competition predominance. 'One model fits all' and 'carbon copy' approaches to policy development are dangerouse. A more productive way is 'cluster activation',that is to focuse on removing the most serious bottlenecks for higher productivity and innovation for a cluster by mobilizing the capacity of cluster participants to act jointly. In this paper concrete case studies are examined, best practice is analysed, unsolved problems or good lessons are also discussed and picked up and action recommendations are developed.