IJMB Journal – Abstracts

International Journal of Management and Business

IJMB Volume II, Issue 2


Industry Clusters, SMEs and Public policy: A Review and Recommendations for Peripheral Regions
Meir Russ* and Jeannette K. Jones**

*Austin E. Cofrin School of Business, University of Wisconsin – Green Bay, Green Bay, WI 54311-7001, USA. russm@uwgb.edu,
**American Intercontinental University Hoffman Estates, Illinois 60192, USA. jeannette.jones@faculty.aiuonline.edu


Research suggests that small and medium size enterprises (SMEs) are major contributors to job creation and are stabilizing factors for economic development since they are locally bound and less mobile. It is believed, however, that those economic development advantages are diminished if the SME is situated in a knowledge deprived region. Our own research suggests however, that in knowledge deprived regions, small, knowledge intensive companies can endure if they network out of the region and collaborate with suppliers and/or customers. Since psychological distance often overrides physical distance as the principal barrier for collaboration, creating channels of networking are critical. One question of interest is how SMEs in knowledge deprived regions can be supported by regional and/or national economic development entities so it can participate effectively in the global knowledge economy. This paper will propose a number of ideas and policy guidelines for such support, taking into consideration the unique aspects of policy making in regard to knowledge management of SMEs situated in a peripheral region. The central idea is the support and creation of an appropriate infrastructure; for example, telecommunication and transportation infrastructures (which are obvious), and less obvious, regulatory (e.g., regulating capital transfer) and administrative (e.g., regional sister relationships) supports. Among other policy guidelines are supports for meeting opportunities, (e.g., supporting international conferences), formal recognition of clusters such as university-industry collaboration, and regional and international activities. In this paper we will also address pitfalls such as, “don’t pick winners,” and “let the business community drive the process.”

Keywords: Industry clusters, peripheral regions, public policy, SMEs.

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