Political and entrepreneurial cluster activities in machinery and plant engineering

Cluster policies in Germany and Europe are in line with the trend of the industry policies in the United States. They are supposed to support regional agglomeration of economic activity and cooperations between firms and research facilities. The German ministry of education and research runs a cluster competition under the slogan: More innovation. More growth. More employment. So, successful clusters are supposed to promise positive growth and employment effects. But localization advantages still don’t legitimate government-run cluster policies, as only clusters that work suboptimal justifies cluster policies. Moreover it must be ensured that government intervention doesn’t cause even higher welfare losses. In this paper we examine the theoretical aspects using data from a survey under German engineering firms. © 2010, List-Gesellschaft e.V.