Types of Manufacturing Clusters

Types of Manufacturing Clusters

Source: adapted from Markusen, A. (1996) “Sticky Places in Slippery Space: A Typology of Industrial Districts”, Economic Geography, Vol. 72, No. 3, pp. 293-313.

The above figure portrays three types of manufacturing clusters (or districts):

  • Marshallian industrial cluster. Based on the initial work of the economist Marshall in the 1910s, who tried to articulate the reasons why industrial firms are usually found in districts (or clusters). This cluster is characterized by a division of labor between small firms engaged in complementary activities and an advanced specialization. It reflects a flexible regional specialization where networking is an important component of industrial dynamics. The distribution system is commonly serviced by small-batch flows between numerous suppliers and customers.
  • Hub-and-spoke cluster. A situation in which an industrial sector has suppliers clustering around one or several core firms. The hub-and-spoke district is distinct from a Marshallian district, as its dynamics are a function of a dominant firm rather than networking among smaller firms. The fate of the cluster is often linked with the fate of the core firm. The firm Boeing and the region of Seattle are a common example of a hub-and-spoke district. The distribution system is bound to the requirement of the large firm, which is large enough to have its own transport operations.
  • Satellite platform cluster. A set of unconnected branch plants or distribution centers embedded in external organization links, each part of its own globally-oriented supply chain. A satellite platform district often corresponds to a location of high accessibility around which the branch plants have clustered, such as a transport terminal (ports, airports, intermodal terminals). These are the characteristics of many logistics zones built around the principle of co-location and localization economies. On occasion, a border can be the reason for clustering, mainly for cost differences such as labor and land. For instance, the Maquiladoras along the US/Mexico border are manufacturing and distribution clusters granting access to the large American consumption market.