Industrial Clusters: an Opportunity to Stimulate Business Entities Integration and Competitiveness

The economic theory deals with two types of business entities integration: horizontal and vertical. Cluster environment may include both types of integration - companies producing the same products are interconnected, besides they co-operate with the suppliers and supporting entities, therefore increasing their competitiveness. Low level of business entities co-operation and business integration in the national economy of Latvia serves as an explanation for the current problems of Latvia's competitiveness. Companies are isolated into their approaches to enter a global market; however in many cases it is a hard task for a single company. It could be done in a simpler and more efficient way when companies and suppliers from a particular sector are interconnected in geographically proximate groups or clusters; thus the efficiency may be heightened, greater opportunities for innovation and export created, and favourable conditions reached for the integrated development. The world and the most advanced practice at Latvia is a good evidence for it. Business entities co-operation and integration is a gateway to integrated development and higher competitiveness on the global markets. Cluster environment is stimulating integrated development of all the business entities within the cluster - related entities (suppliers) as well as supporting entities (research and educational institutions etc.) are developing together with the growth of leading entities. The main research aim is to find out the industrial cluster influence on the integrated development. Different scientific research data and papers were analysed and experts interviewed to achieve this aim.