Did you guess who companies A, B, C, D, and Z were?
An ‘industrial cluster’ occurs where similarly categorised companies are located in close proximity, and (KIA) is literally the world’s best practice example of one such cluster.
The basic principle underpinning clusters is this: Companies in clusters are more competitive than similar companies located outside of clusters.
The improved competitiveness comes from being co-located with other businesses, so there is a
- higher likelihood of an efficient, integrated freight transport system servicing the area
- larger number of specialised, skilled and experienced workers who will move within the cluster
- shorter distance from process input supplies, possibly even able to be piped, to product user
- higher likelihood that by-products will be able to be used as an input into by nearby industry processes, increasing the re-use and recycling of materials
- increased interest from the secondary (supporting engineering and fabrication) industry sector to locate near the heavy industry cluster thus further reducing the costs for all parties
- economic sense in moving to the cluster to take advantage of the synergies, and to add to them
- greater economic impact which can induce greater governmental attention
- greater interest in investment which adds to all of the above.
Business competitiveness is the bottom line!