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42-471: During its first two years of operation, The cluster Systematic Paris-Region has launched 207 research projects representing 975 million euros of investments consisting of 380 million from state aid, from the Agence Nationale de la Recherche (ANR), Oséo and local authorities. As of September 2011, Systematic Paris-Region has permitted the development of 318 collaborative R&D projects, at

84-675: A 2011 report stated that in terms of number of papers the share of English-language scientific research papers the United States was first followed by China, the UK, Germany, Japan, France, and Canada. In 2015, research and development constituted an average 2.2% of the global GDP according to the UNESCO Institute for Statistics . Metrics and rankings of innovation include the Bloomberg Innovation Index ,

126-426: A cluster is not standardized. Individual economic consultants and researchers develop their own methodologies. All cluster analysis relies on evaluation of local and regional employment patterns, based on industrial categorizations such as NAICS or the increasingly obsolete SIC codes . Notable databases providing statistical data on clusters and industry agglomeration include: An alternative to clusters, reflecting

168-702: A comparable metric other than GDP are the OECD Better Life Index rankings for different aggregative domains. The index includes 11 comparable "dimensions" of well-being: To promote exports, many government agencies publish on the web economic studies by sector and country. Among these agencies include the USCS (US DoC) and FAS (USDA) in the United States, the EDC and AAFC in Canada, Ubifrance in France,

210-401: A critical threshold, giving it a key position in a given economic branch of activity, and with a decisive sustainable competitive advantage over other places, or even a world supremacy in that field (e.g. Silicon Valley and Hollywood). A cluster is most of the time the result of initiatives, since it implies to convince current competitors to work jointly. The initiative usually comes from

252-516: A geographical area. The cluster effect in the capital market also led to a cluster effect in the labor market . As an increasing number of companies started up in Silicon Valley, programmers, engineers etc. realized that they would find greater job opportunities by moving to Silicon Valley. This concentration of technically skilled people in the valley meant that startups around the country knew that their chances of finding job candidates with

294-520: A local currency are typically translated to a single monetary unit using the idea of purchasing power . This is the method used below, which is used for estimating worldwide economic activity in terms of real United States dollars or euros . However, the world economy can be evaluated and expressed in many more ways. It is unclear, for example, how many of the world's 7.8 billion people (as of March 2020 ) have most of their economic activity reflected in these valuations. According to Maddison , until

336-409: A manufacturing to an innovation economy. The cluster effect can be more easily perceived in any urban agglomeration , as most kinds of commercial establishments will tend to spontaneously group themselves by category. Shoe shops (or cloth shops), for instance, are rarely isolated from their competition. In fact, it is common to find whole streets of them. The cluster effect is similar to (but not

378-649: A total cost of 1.4 billion euros in R&;D effort and a support revenue of about €500 million from the state (via the Fonds unique interministériel (Single Interministerial Fund)), national agencies, ANR, Oséo, EUREKA , ERDF and territorial collectivities . The project of a French competitiveness cluster on free software was consigned to Systematic Paris-Region following the Comité interministériel d'aménagement et de développement du territoire (Interministerial Committee for

420-433: Is a clear and efficient market to establish monetary value , economists do not typically use the current or official exchange rate to translate the monetary units of this market into a single unit for the world economy since exchange rates typically do not closely reflect worldwide value – for example, in cases where the volume or price of transactions is closely regulated by the government. Rather, market valuations in

462-430: Is a usually cited example of emergence . Governments and companies often try to use the cluster effect to promote a particular place as good for a certain type of business. For example, the city of Bangalore , India has utilized the cluster effect in order to convince a number of high-tech companies to set up shop there. Similarly, Las Vegas has benefited through the cluster effect of the gambling industry. In France,

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504-452: Is more important. Porter argues that economic activities are embedded in social activities; that 'social glue binds clusters together'. This is supported by recent research showing that particularly in regional and rural areas, significantly more innovation takes place in communities which have stronger inter-personal networks. Put in another way, a business cluster is a geographical location where enough resources and competences amass reach

546-1000: The United Kingdom , the United States , the European Union and the African Union . Despite high levels of government investment , the global economy decreased by 3.4% in 2020 in the midst of the COVID-19 pandemic , an improvement from the World Bank 's initial prediction of a 5.2 percent decrease. Cities account for 80% of global GDP , thus they faced the brunt of this decline. The world economy increased again in 2021 with an estimated 5.5 percent rebound. Telephones – main lines in use: 843,923,500 (2007) 4,263,367,600 (2008) Transportation infrastructure worldwide includes: The Royal Society in

588-609: The Global Innovation Index and the share of Nobel laureates per capita . From the scientific perspective, economic activities are embedded in a web of dynamic, interrelated, and interdependent activities that constitute the natural system of Earth. Novel application of cybernetics in decision-making (such as in decision-making related to process- and product-design and related laws) and direction of human activity (such as economic activity) may make it easier to control modern ecological problems. One example for

630-424: The "world economy" is simply an aggregate of the separate countries' measurements. Beyond the minimum standard concerning value in production, use and exchange, the definitions, representations, models and valuations of the world economy vary widely. It is inseparable from the geography and ecology of planet Earth . It is common to limit questions of the world economy exclusively to human economic activity , and

672-583: The DMC complex include international firm affiliates, schools, moderate to low income housing, commercial and convention facilities, entertainment zones, and the city's central rail station. The cohesive connection of industry, cultural centers, infrastructure, and human capital has fostered Seoul as a strong metropolitan economy and South Korea, the Miracle on the Han River , as a storied nation transitioning from

714-678: The Sangam-dong district. With Seoul's rapidly growing cluster of multi-media, IT, and entertainment industries, the Digital Media City, through its vibrant agglomeration, helped to promote these industries and companies whose core business required use of information, communication, and media technologies. DMC grew and prospered as a global business environment, raising Seoul as an east-Asian hub of commerce. The cluster of its digital media-related, high-tech firms spawned partnerships which in turn leveraged both human and social capital in

756-464: The area due to established business relationships and through their presence which would in turn promote DMC as a prime location. With such a concentration of these entities, Seoul has become a major nexus of high-technology and digital media. It is home to digital media R&D firms across a range of types including cultural media creation, digital media technologies, digital broadcasting centers, technology offices, and entertainment firms. Just outside

798-551: The area. Eventually, DMC fed the innovation of more than 10,000 small-scale Internet, game, and telecommunication firms located in Seoul. In development of DMC, the Seoul government leveraged initial funding by private technology partners and developers. It is also provided IT broadband and wireless networks to the area as well as needed infrastructure . The Seoul government even provided tax incentives and favorable land prices for magnet tenants who would attract other firms to

840-515: The business cluster. In urban studies , the term agglomeration is used. Clusters are also important aspects of strategic management . The term business cluster, also known as an industry cluster , competitive cluster , or Porterian cluster , was introduced and popularized by Michael Porter in The Competitive Advantage of Nations (1990). The importance of economic geography, or more correctly geographical economics,

882-562: The cluster while facilitating strong inter-organisational relationships within the cluster. Its relative influence is also dictated by other market factors such as expected revenue, strength of demand, taxes , competition and politics . In the case of Silicon Valley as stated above for example, increased crowding in the valley led to severe shortage of office and residential space which in turn forced many companies to move to alternative locations such as Austin, Texas and Raleigh-Durham, North Carolina even though they would have liked to stay in

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924-736: The concept of inter organizational networks in Germany and practical development of clusters in the United Kingdom ; many perceive there to be four methods by which a cluster can be identified: It is also expected – particularly in the German model of organizational networks – that interconnected businesses must interact and have firm actions within at least two separate levels of the organizations concerned. Several types of business clusters, based on different kinds of knowledge, are recognized: The process of identifying, defining, and describing

966-451: The development and territorial competitiveness, CIADT) of July 5, 2007. 600 organizations are involved in the R&D network of the cluster: 366 SMEs-SMBs , 116 companies, 24 ETI, 79 research centers and educational institutions, 19 territorial authorities and 15 investors. The cluster brings together beyond the R&D collaborative ecosystem 1060 small and medium enterprises. Since its inception in 2005, Systematic focuses its activity on

1008-402: The digital revolution for 6 markets : From 2009 to 2010, Systematic deploys its technologies and solutions to two new market areas which development is increasingly reliant on the expertise and know-how of Systematic and its members:: - E-Services for the city; - Design tools and simulation for the building and the city; - Management systems and supervision of the building for the city and

1050-778: The distributed nature of business operations in the wake of globalization, is hubs and nodes . In the mid- to late 1990s several successful computer technology related companies emerged in Silicon Valley in California . This led anyone who wished to create a startup company to do so in Silicon Valley. The surge in the number of Silicon Valley startups led to a number of venture capital firms relocating to or expanding their Valley offices. This in turn encouraged more entrepreneurs to locate their startups there. In other words, venture capitalists (sellers of finance) and dot-com startups (buyers of finance) "clustered" in and around

1092-446: The environment; - Transport systems and mobility. - Modeling and simulation for the life sciences; - Medical imaging (computers, sensors, software for processing and analysis); - Telemedicine and medical supervision. This deployment will be driven by existing theme groups with coordination and oversight arrangements between the partners clusters. 39 R&D projects have already been launched by Systematic Paris-Region, which are part of

1134-403: The exchange of ideas, industry-specific regional concentrations , also create a thick labor market input. Hence innovations increase the accumulation of the knowledge in the region which influences on the local internal economies. The cluster effect does not continue forever though. To sustain cluster performance in the long term, clusters need to manage network openness to business outside

1176-535: The merger attempted to create geographic clusters to compete with the low costs of other firms, costs were not lowered enough and eventually the plan failed, forcing Hechinger into Chapter 7 liquidation and Builders Square out of the industry. Clusters can also fail if the regional economy does not adapt with the times. In Detroit, when the automotive industry declined, the cluster and the city declined with it. Clusters can fail if they do not use their position to reinvent themselves and move into other industries before

1218-831: The middle of the 19th century, global output was dominated by China and India with Indian subcontinent being the world's largest economy from 1 C.E to 17 C.E. Waves of the Industrial Revolution in Western Europe and Northern America shifted the shares to the Western Hemisphere. As of 2024, the following 20 countries or collectives have reached an economy of at least US$ 2 trillion by GDP in nominal or PPP terms: Brazil , Canada , China , Egypt , France , Germany , India , Indonesia , Italy , Japan , Mexico , South Korea , Russia , Saudi Arabia , Spain , Turkey ,

1260-540: The national industrial policy includes support for a specific form of business clusters, called " Pôles de Compétitivité ", such as Cap Digital . Another good example is the Nano/Microelectronics and Embedded Systems" or in short "mi-Cluster" that was facilitated by " Corallia Cluster Initiative " in Greece. Corallia introduced a bottom-up, 3-phase programme framework for facilitating cluster development, and

1302-522: The new themes. Each thematic group division has updated its strategic roadmap by including the following new elements: Theme identified by prospective studies conducted in preparation of the strategic plan. - The ICT and sustainable city area was analyzed in 2009; - ICT and health field will be in 2010 with an update of this document. In France, the first four themes of the cluster Systematic Paris-Region comprised no less than 320,000 employees, including 250,000 in services and 70,000 in industry. By itself,

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1344-476: The political sphere (e.g. the different Singaporian clusters ), but it can also come from the industry itself (e.g. the initiative of Bart J. Groot, the director of Dow Olefinverbund GmbH, a major chemicals complex at the intersection of three Eastern German states ( Saxony , Saxony-Anhalt , and Thuringia after the reunification. The goal was to "encourage coordination among political and administrative officials" of Mitteldeutschland .) Following development of

1386-470: The productivity of the companies in the cluster, by driving innovation in the field, and by stimulating new businesses in the field. According to Porter, in the modern global economy , comparative advantage , whereby certain locations have special endowments (i.e., harbor, cheap labor) helping them overcome heavy input costs, has become less relevant. Now, competitive advantage , in which companies make productive use of inputs, requiring continual innovation ,

1428-706: The proper skill-sets were higher in the valley, hence giving them added incentive to move there. This in turn led to more high-tech workers moving there. Similar effects have also been found in the Cambridge IT Cluster (UK). In the late 1990s, the Seoul Metropolitan Government in South Korea developed the Digital Media City (DMC), a 135-acre complex, four miles outside of the city's central business district in

1470-400: The same as) the network effect . It is similar in the sense that the price-independent preferences of both the market and its participants are based on each one's perception of the other rather than the market simply being the sum of all its participants actions as is usually the case. Thus, by being an effect greater than the sum of its causes, and as it occurs spontaneously, the cluster effect

1512-401: The software segment in complex systems represent a global market of 300 billion euros. Business cluster A business cluster is a geographic concentration of interconnected businesses , suppliers, and associated institutions in a particular field. Clusters are considered to increase the productivity with which companies can compete , nationally and globally. Accounting is a part of

1554-419: The tipping point is reached. In terms of the level of cluster members' innovation performance this type of a system can be usually characterized by a low level of uptake of different technologies due to the limited contacts that actors have with industrial companies focusing mainly on the same areas of interests. Global economy The world economy or global economy is the economy of all humans in

1596-649: The valley. Sometimes cluster strategies still do not produce enough of a positive impact to be justified in certain industries. For instance, in the case of Builders Square , the home improvement retailer could not compete with industry leaders such as Home Depot when it could not realize the same low costs and contracts. As a result, it was presented with an option to form a merger with another home improvement retailer, Hechinger to better improve their business clusters and compete with Home Depot and other industry leaders. However, when it failed to do so, it slowly began to fail and eventually fell into bankruptcy. Although

1638-516: The world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research, genuine data or government cooperation makes calculating figures difficult. Typical examples are illegal drugs and other black market goods, which by any standard are a part of the world economy, but for which there is, by definition, no legal market of any kind. However, even in cases in which there

1680-438: The world, referring to the global economic system , which includes all economic activities conducted both within and between nations , including production , consumption , economic management , work in general, financial transactions and trade of goods and services . In some contexts, the two terms are distinct: the "international" or "global economy" is measured separately and distinguished from national economies, while

1722-465: Was also brought to attention by Paul Krugman in Geography and Trade (1991). Cluster development has since become a focus for many government programs. The underlying concept, which economists have referred to as agglomeration economies , dates back to 1890, and the work of Alfred Marshall . Michael Porter claims that clusters have the potential to affect competition in three ways: by increasing

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1764-473: Was short-listed among the final classification (finalists) for the DG REGIO's RegioStars 2009 Awards in the category "Research, Technological Development and Innovation". Clusters, were proved to boost the innovative activity among firms of the same industry . One of the main causes that might be highlighted is the competition between the companies. Moreover, except of stimulating a favorable conditions for

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