Literature Review on Manufacturing Clustering in Sa

Introduction

The purpose of this study is to explore the effectiveness of clustering manufacturing of enterprises on the economy with particular focus on whether or not clusters can attract investment. Through a case study of Durban based clusters, this study seeks to understand whether manufacturing clusters can push/pull investment into Durban METRO and the overall impact of clustering on the manufacturing value chain.

This paper is premised on the notion that in order to understand the effectiveness of manufacturing clusters in general, and in the area under study in particular, it is necessary to review related literature around why, what and how clustering occurs. As such, the paper examines broad aspects relating to the manufacturing clusters. First, the paper examines the concept clustering and the types of clusters . Second, it examines the key reasons for existence of clusters and some weaknesses noted. Third the importance of stakeholders’ readiness and capacity for clustering is discussed.. Fourth, because no industry system can cluster all components, the paper tackles the question of which manufacturing sectors/components tend to be, and ought to be clustered. Finally, the paper examines case studies of clustering efforts in other countries with a view to seeking implications for South Africa in general and the Durban Met in particular, in the context of a global environment.

The concept clustering

Clustering is generally viewed as one of the significant and impactful key drivers of economic growth of a geographic region. Kumar (2011) defines clusters as geographic concentrations of three or more companies intricately involved, in a particular field, in the downstream and upstream value adding activities such as product manufacture, services and or information flow from raw material source to the final consumer. In other words, this encompasses the whole value chain. Porter (1998) goes on to say that clusters extend laterally to include...