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This paper focuses on the notion of 'industrial clusters' as a descriptor to discuss innovation in less-developed or industrializing economies. A critical review of the literature on industrial clusters is used to identify the key determinants of clusters. A frame of analysis is presented to examine the institutional factors that underpin cluster performance. The analysis of two case studies shows that whether or not a cluster becomes an integrated part of an economic system and contributes to economic growth depends on the type of cluster (sectoral location), geography (physical location), the institutional landscape that structures how the actors organize themselves (the mode of governance), the external (macroeconomic) environment, and whether or not the combination of all these factors is conducive to learning. Keywords: clusters, institutions, institutional analysis, innovation systems, development JEL Classification Codes: L1, O1, O2, O3, Z13, The current use of 'cluster' is often closely associated with Michael Porter's (1990; 1994; 1997; 1998; 2000a; 2000b; 2003a; 2003b) reconceptualization of the foundations of modern capitalist economies as varying [...]

A shift of focus is discernible in the literature on industrial agglomeration and regional economic development in the post-Fordist/globalization context. In addition to economic factors, the new focus emphasizes the importance of social and cultural factors for the growth of new industrial agglomerations. However, despite the importance attached to the (natural) environment in writings on organizations, regions and economies over the last few years, the literature on industrial agglomeration continues to remain devoid of any substantial references to the environment. Attaining sustainability at the local/regional (see note) level requires, among other factors, collective effort by industrial organizations toward common goals including resource conservation, production efficiency, economic viability and social responsibility. This paper explores the possibilities for bridging the current gaps between regional planning policy and the requirements of ecosystem integrity and sustainable industrial development in the practical contexts provided by ‘eco-industrial parks’ (EIPs) and the Waterloo Industrial Network for Sustainability (WINS). Copyright © 2000 John Wiley & Sons, Ltd. and ERP Environment [ABSTRACT FROM AUTHOR]