Cluster based Economic development Essay

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1. THE CONCEPT – INDUSTRIAL ESTATE

1.1. The phrase "industrial estate", is frequently used and alternatively known as designated area - industrial district, park, special economic zone in the industrial development activity. The attractiveness and competitiveness of the industrial estates are much dependable on geographical area with high developed infrastructure facilities provided for and thus a conducive environment is created to attract any businesses of an industrial nature from small and medium scale to the large enterprises.

1.2. World Bank defines industrial estates as:
Specified areas zoned for industrial activity in which infrastructure such as roads, power and other utility services are provided to facilitate the growth of industries. The industrial estates should include at least two of the common features i.e. geographically delimited area, can be physically secured; provision of high quality infrastructure facilities; single management or administration; and separate customs area and streamlined procedures .

1.3. The main priority of industrial estate is to attract high value added industries, where it would create an interest to the prospect investors to invest by establishing their new or expansion and diversification project in the manufacturing operations and other related businesses. Furthermore, several economists and scholars believed that industrial estate can positively influence the socio-economic development and industrialisation of the region.

1.4. An eminent economist, Michael E. Porter found that location characteristics play an important role in the success of a region's industries. Implementing a targeted approach of industry clusters could help firms achieve a competitive advantage by promoting their common interests. And while the strategy has produced mixed results, it remains a well-established model for economic development and business attraction .

1.5. In a world of increasingly global competition, industrial competitiveness is crucial. A country’s competitiveness is much dependable on the capacity of its industry to innovate and upgrade. Clusters-based industrial development has been recognised as a great initiative that can foster the next economy's competitive advantage in the region. According to Porter, clusters represent a new way of thinking about national, state, and local economies, and they necessitate new roles for companies, for various levels of government, and for other institutions in enhancing competitiveness (Porter 2000). Clusters based remains important approach in today industrial development and competitiveness.

1.6. Currently, there are about 595 industrial estates in Malaysia which caters and facilitate to accommodate different types of industries namely electronic and electrical, automotive and equipment, high precision and engineering industries, metal, textiles, pharmaceuticals, chemicals, agro-based, software and etc. However, it is observed there is lack of having...

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