...geographic concentrations of interconnected companies, specialised suppliers, service providers, firms in related industries, and associated institutions (for example, universities, standards agencies, and trade associations) in particular fields that compete but also co-operate.

Silicon Valley in the United States is often cited as an example.

Each of the ten Regional Development Agencies in the UK has identified some or all of the Creative Industries as a growth sector, and all are supporting them through some form of cluster-based economic development strategy. This pattern is reflected in regional development policies across Europe.

The Clusters Group at the UK’s Department of Trade and Industry notes that 'dividends from creative clusters can be enormous in terms of civic image, training and engagement in the economy as well as purely economic terms.' However the sector also faces special challenges: 'creative clusters are not the same as other clusters, and common strategies will not work'.

In other words, the creative sector is booming, but not thanks to mainstream economic development strategies. What strategies should be adopted instead?

In the USA, clusters tend to be thought of as locations that can be visited within a single business day. On this basis, most of England could be regarded as a single cluster with London as its core city. But is this Silicon Valley model really transferable? A critical feature of the European cultural industries is that local identity and distinctiveness is one of the core drivers of innovation and competition. Place matters to culture in a way that it does not to technology. Is Porter’s description of clustering complete?

See also:
Creative Industries – Old Economy or New?
Regions and the role of the capital
What is creative entrepreneurship?
Culture or industry?
Globalisation: opportunity or threat?