nificance of logistics clusters around the world.
QFirst, tell me a little bit about what you mean by the concept of industrial clusters.
AIndustrial clusters are an agglomeration of companies of the same [type] in the same
geographical location: Silicon Valley for information technology, Hollywood for entertainment,
Wall Street for finance companies. It has always
happened throughout history, even before it was
recognized by economists.
QDifferentiate logistics clusters, if you will, fromlogisticsparks.
AIn general, a logistics cluster is an agglomeration of several types of
companies. It is logistics
service companies. It is the
logistics functions of manufacturers, retailers, and
distributors. In many cases,
it’s companies where logistics is a large part of what
they do. All these types of
companies can agglomerate
in logistics clusters. A cluster is just when they have
lots of logistics-related
activities in close geographic proximity.
A park is defined as a
cluster where there is one
manager for the cluster. It
could be a real estate company. It could be a port authority. It could be an airport authority. But whatever the type of company,
it manages the land and it provides certain services.
So there are gradations of agglomerations of logistics operations, and the cluster is a little less
defined. When we have lots of companies together,
it is a cluster.
AIf it comes down to one thing, it is the singu- larity of purpose among all the actors. The
national government, the local government, the
regional government, the companies, the chamber
of commerce. They all sign up to the task of making
it work.
You also need a certain geography. The site can be
a port, an airport, or a central location where you
can get to a lot of places and there are a lot of customers around. For example, Zaragoza [in Spain] in
some sense is the middle of nowhere. Yet if you look
at it, it’s an equal distance from the four largest
cities of Spain and close to Southwest France, which
is that country’s industrial region.
In many cases, there are
historical factors at work.
Take Singapore, for instance.
Singapore, which has almost
no natural resources, started
as a port that had no taxes. It
created a lot of traffic. It now
is known as a port that has
no corruption. All these
things can help create a
logistics cluster.
QWhat do you see as the role of government in a successful cluster
development? What are the
risks that government takes
on?
AThe biggest risk gov- ernment takes on is
cost—if you want to develop
a cluster from scratch, it is a significant investment.
But governments all over the world are making this
investment. There are certain things that only government can do, like the zoning or issuing permits.
The federal government can create free trade zones.
Local government can grant all kinds of tax incentives to get companies to come in and create jobs.
QWhat are the critical elements that make a logistics cluster successful? Q What is the significance of logistics clusters in today’s business and supply chain man-
