Significance of Cluster Theory to the Creative Industry



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Cluster theory simply implies a theory of strategy. In his Principles of Economics Book, published in 1890, Alfred Marshall described clusters as a concentration of specialized industries in particular localities, which he referred to as industrial districts (Gong & Hassink, 2017). The cluster strategy fosters business clusters by focusing on regulatory policies and resources to develop and retain business entities in given discrete sectors in the creative economy ecosystem, demonstrating chances of advancing city objectives and enhancing economic growth in the locality. The cluster theory is associated with numerous significances to the creative and cultural industry, as discussed below:

Significance of Cluster Theory to the Creative Industry

Cluster theory is an essential aspect in emerging industries, such as cultural and creative industries (CCI). The cluster definition, which is heavily focused on economic geography, is often used to explain the driving force behind CCI growth. At the same time, it ignores the social dimensions of creative talent employed in the Creative and cultural sector. Clustering, or the agglomeration of companies in the creative and artistic sectors, has long been thought to provide benefits to business entities and the communities in which they work, such as improved competition, higher efficiency and profitability, creativity, job development, and market formation. The cluster concept explains the growth in the cultural and creative industry as it is heavily associated with the economic, geographical concertation of interlinked individuals or organizations to establish a collaboration and competition within the creative financial ecosystem (Zhang & Grüneis, 2019). In most instances, the relevant authorities and systems predetermined the establishment of clusters, which are believed to provide a supportive environment for economic and industrial growth. Besides, the cluster theory has fully grasped the reasons behind the creative industry’s development since the concept has more emphasis on geographical proximities. This has enabled it to cover the merging process of a critical stakeholder in the creative sector like artists, musicians, programmers, etc., and various organizations in the industry, thus creating social aspects that foster the performance and growth in the creative and cultural sector.

The cluster concept incorporated industrial clusters in its framework, which is comprehended as regional geographical concentrations of economic actors from the same or similar industries along the value chain. Clusters form as a result of geographical proximity, growth over time, rise in competitiveness and cooperation due to innovation, and the potential to generate more economic benefits through increased efficiency, improved knowledge management, and entrepreneurial activity (Zhang & Grüneis, 2019). Recent studies support the evidence that cluster concept based on spatial proximity has positive outcomes on entrepreneurship and promotes the economic situation of the creative and cultural sector. Moreover, the cluster theory enhances the innovation cluster concept, which steers the growth of the entrepreneurial ecosystem. As a result of the cluster ideology, the emergence of creative hubs will be realized in the creative sector, which offers top-notch strategic tools to consolidate existing activities and enhance the emergence of a thriving and recognizable cluster. This, in turn, boosts the economic ecosystem of the creative and cultural industry. In its most basic form, a hub provides small innovative businesses with the resources they need on versatile and inexpensive terms. A center, on the other hand, plays a far more prominent role in an innovation cluster. By forming groups, collaborations, and friendships, creates critical social capital. It establishes sectoral hotspots that attract the most successful entrepreneurs in a given area in creative and cultural sectors. Hubs provide a steady foundation in the shifting fabric of a cluster in the cluster concept in relation to the artistic and creative industry.

Importance of Cluster Theory in Analyzing the Creative Industry

The cluster concept is vital in analyzing the creative sector of the economy as it supports innovation and growth. In evaluating the creative and cultural industry, cluster concepts commence by offering knowledge sharing, skills, partnership, and career opportunities to the key stakeholders in the CCI. For big organizations, the cluster concept helps them be in relevant clusters to allow them to opt for innovation ventures and acquire new partners. In the relevant literature, it is widely acknowledged that the agglomeration of companies characterizes innovation, implying that creative industries are not evenly spread around the territory but rather clustered in space. Creative industries, in reality, tend to cluster in cities and cater to a wide range of occupations and economic sectors (Zhang & Grüneis, 2019). The concept provides a competitive advantage for the clustered firms in the creative and cultural industry, which offers benefits to business firms and the communities in which they work, like improved competition, higher efficiency and profitability, creativity, job development, and market formation. With the concept, firms are able to acquire significant market share hence dictating high-profit margins due to increased sales, therefore promoting the economic ecosystem of creative and cultural industry.

Cluster Concept and Competitive Advantage

A cluster of affiliated business entities can generate commercial synergies and strengths that enable it to realize a universal presence even when it is geographically distant from the major world markets. The cluster concept enhances competitive advantage for firms in the creative industry. It focuses on the global vision of the stallholders in the sector, which paves the way for the competitive climate, securing opportunities for significant market share and increased customer base. Therefore, clustering improves the overall performance and ensures greater scalability, which leads to a rise in the user base in the creative and cultural sectors (Gong & Hassink, 2017).


The cluster concept is an essential aspect in determining economic sustainability in the creative and cultural sector. Since it focuses majorly on economic geography, it is used as a core tool to explain the driving force behind creative and cultural growth and development alongside the gaining of competitive advantage among clustered companies in the industry. Due to the immeasurable attributes and benefits realized through embracing the concept are widely advocated to steer business operations, especially in the creative and cultural economic ecosystem.



Gong, H., & Hassink, R. (2017). Exploring the clustering of creative industries. European Planning Studies25(4), 583-600.

Zhang, I. Y., & Grüneis, A. (2019). Coupled cluster theory in materials science. Frontiers in Materials6, 123.

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