Clusters and Economic Policy: Aligning Public Policy with the New Economics of Competition

Abstract

Clusters are a fundamental economic unit in the modern economy, and an important driver of competitiveness. Cluster-based policies have begun to play a prominent role in some U.S. states and regions, and in many other nations, but cluster-based approaches have been all but absent at the Federal level in the U.S. A selective Federal role in cluster-based policy will make Federal economic policy more effective and better utilize the scarce resources available. Federal leadership in cluster-based policy would also encourage cluster-based approaches at the state and local level.

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