Cluster Formation And Government Policy: System Dynamics Approach (powerpoint)
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This presentation is created for presented at 27th International System Dynamics Conference Albuquerque, New Mexico July 26 – 30, 2009
CLUSTER FORMATION AND GOVERNMENT POLICY: SD APPROACH
Pard Teekasap Southern New Hampshire University
Agenda
What is cluster ? Government policy on cluster Model Overview Simulation Results Summary Q&A
What is cluster? Geographic concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions in a particular field that compete but also cooperate (Porter 1998) e.g. Silicon Valley in CA and biotechnology cluster in MA
Government policy on cluster
Porter (2000) recommends 8 policies that the government should implement I choose 3 policies to study Provide
export promotion Provide education and research facilities Set up free trade zones, industrial parks or supplier parks
Model Overview
Simulation Results
PL1: Provide export promotion PL2: Provide education and research facilities PL21:
Provide training facilities
Shorten the worker training period PL22:
Provide R&D facilities
Increase innovation Æ increase competitiveness Æ lower failure rate
PL3: Set up free trade zones, industrial parks or supplier parks
PL1 Export Promotion: Effect on cluster size
PL21 Training Facility: Cluster size
PL21 Training Facility: Training workers
PL21 Training Facility: Experienced workers
PL22 R&D Facility: Cluster size
PL3 Free Trade Zone: Cluster size
Summary
Export promotion and establishment of R&D infrastructure policies shorten the time to develop the cluster and enlarge the size of the cluster. The development of training institution does not affect the cluster development but it reduces the number of training workers in the cluster. Providing more area for the cluster also enlarges the size of the cluster but it lengthens the time to develop the cluster.
Q&A
Enterprise Module
Land Module
Labor Module
Job-Salary Module
Market Demand Module
Firm Ratio and Firm Multiplier Module
PL1: Internal market demand
PL1: Worker’s salary
PL21: Worker’s salary
PL22: Worker’s salary
PL3: Worker’s salary
CLUSTER FORMATION AND GOVERNMENT POLICY: SD APPROACH
Pard Teekasap Southern New Hampshire University
Agenda
What is cluster ? Government policy on cluster Model Overview Simulation Results Summary Q&A
What is cluster? Geographic concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions in a particular field that compete but also cooperate (Porter 1998) e.g. Silicon Valley in CA and biotechnology cluster in MA
Government policy on cluster
Porter (2000) recommends 8 policies that the government should implement I choose 3 policies to study Provide
export promotion Provide education and research facilities Set up free trade zones, industrial parks or supplier parks
Model Overview
Simulation Results
PL1: Provide export promotion PL2: Provide education and research facilities PL21:
Provide training facilities
Shorten the worker training period PL22:
Provide R&D facilities
Increase innovation Æ increase competitiveness Æ lower failure rate
PL3: Set up free trade zones, industrial parks or supplier parks
PL1 Export Promotion: Effect on cluster size
PL21 Training Facility: Cluster size
PL21 Training Facility: Training workers
PL21 Training Facility: Experienced workers
PL22 R&D Facility: Cluster size
PL3 Free Trade Zone: Cluster size
Summary
Export promotion and establishment of R&D infrastructure policies shorten the time to develop the cluster and enlarge the size of the cluster. The development of training institution does not affect the cluster development but it reduces the number of training workers in the cluster. Providing more area for the cluster also enlarges the size of the cluster but it lengthens the time to develop the cluster.
Q&A
Enterprise Module
Land Module
Labor Module
Job-Salary Module
Market Demand Module
Firm Ratio and Firm Multiplier Module
PL1: Internal market demand
PL1: Worker’s salary
PL21: Worker’s salary
PL22: Worker’s salary
PL3: Worker’s salary
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