Regional economic development: exploring the ‘Role of Government’ in Porter’s Industrial Cluster Theory.

Abstract

Porter’s Industrial Cluster Theory (ICT) is a theoretical framework that achieved prominence in Australian economic policy development. Despite its widespread adoption, however, Australia has remained significantly below the OECD average in terms of its industrial clusters’ contributions to real wealth creation. In order to understand the positive role that (Australian) governments can play in the development of industry clusters, this paper analyses the 25-year history of the Tasmanian Light Shipbuilding Industry cluster. This analysis provides an insight into the set of government policy roles that facilitated the development of this internationally competitive industry cluster. This paper also proposes a re-conceptualisation of ICT that will potentially increase its value as a predictive tool for regional economic development.