Clustering in Ireland: Development cycle considerations

Abstract

Motivated by ongoing research into the cluster concept that considers dynamic features of economic development and the cluster life cycle, differences between traded clusters and local activity across different spatial scales are examined for Ireland. Using recent cluster definitions for Europe, this paper presents clustering patterns within the Irish economy from 2008 to 2012. We report on data requirements when applying the benchmark cluster definitions to Irish data. Integrating small, open economy features with life-cycle concerns, we focus on specific clusters in Ireland, along with their export performance, noting that appropriate cluster boundaries are neither regional nor national. Analyses indicate that while Ireland hosts a number of internationally competitive clusters, foreign-owned firms remain substantially more productive than indigenous enterprises. We identify the geographical location of these prominent clusters at the NUTS-3 regional level and highlight the role of regional features for differences in adaptive cycles of clusters. We identify a substantial portion (60%) of Irish regional wage variation relates to the different cluster mixes across regions.