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The main problem addressed by this research is the current debate between the negative and positive effects of industrial clusters. This debate is a result of gaps between theoretical implications and empirical evidence in both the classical agglomeration theory and the agglomeration lifecycle theory. The purpose of this study is to propose a framework for developing an index measuring both organizational cluster involvement and organizational supply chain including the three pillars (economic, social, and environmental). Furthermore, the index acts as a quantitative predictor of the stages of the life cycle of industrial clusters. Adopting a case study methodology, the applicability of the index development framework is demonstrated. First, cross-sectional exploratory interviews are performed to locate items measuring the three pillars of organizational sustainability within Egyptian communication industry. Second, an explanatory, cross-sectional approach is applied gathering data from eight professionals related to involvement and supply chain sustainability of their organizations. Analytical hierarchical process is used for weighting and aggregating individual item metrics into two indicators (Saaty, 1980). Measuring, managing, and controlling capabilities of organization's supply chains outweighs the need to manage risks. The proposed framework aids firms within a cluster in making timely decisions about what needs addressing to improve supply chain sustainability performance. Hence, all environmental, social, and economic capabilities can be effectively monitored and controlled.

This chapter applies the five drivers of productivity framework to regional microdata for Egypt and extends it by introducing an index of industrial clusters as an explanatory factor of the productivity performance of local private sector firms. Applying structural equation models, the geographic concentration of sectoral economic activity is found to have a positive and statistically significant effect on labor productivity. The transmission mechanism is conjectured to be the positive spillovers that are created, which local firms can tap into. In contrast, a higher concentration of skilled workers in an industrial sector in a region is associated with lower levels of labor productivity – a finding that suggests there may be structural deficiencies in the allocation of skilled workers. Regional policy should focus on net investments in gross capital formation throughout the country, for which the national and regional governments should improve how public investments are managed and the institutional framework – including the rule of law, bureaucracy and red tape, conflict of interest, transparency, and governance – so that private investment (both local and foreign) may substantially increase.

Building industrial clusters is getting much more political attention and strategic orientation in all developing countries. This study started by revising the conceptual and theoretical frameworks for industrial clusters, followed by some insights and contributions about empirical bases for clusters' dynamics and processes. The study focused on the case of Agadir Agreement between four Arab countries (Egypt, Jordon, Morocco, and Tunisia), which was initiated after the Euro-Mediterranean partnerships, and the rationale of the agreement was based on the concept of cumulative value-added origin. The study based its methodology on analyzing the international and bilateral trade flows of six industrial goods from the automotive sector among the four countries and with the EU countries to detect the degree of industrial collaboration and the achieved success of each country in this sector. The study indicated that the four countries used the concept of industrial clusters for economic development, but the results of the analysis showed that till now Agadir Agreement only achieved a shallow integration, while failed to deeply integrate as one big collaborative industrial cluster.

This chapter explores how state–business relations (SBR) in the Arab world influence public policy on industrial clusters and the resulting economic benefits from these clusters on innovation and productivity. The main SBR actors are identified as the state, big capitalists (or tycoons), and small and medium business managers and owners (entrepreneurs). The framework used here focuses on interactors' power relations. Such power relations are reflected in the ability/inability of the state to enforce its will with less consultation with and/or favorite treatment to nonstate actors. It is also reflected in the ability/inability of nonstate actors to act individually or organize in order to defend their interests and influence government policy formulation and implementation. Such power relations are reflected in the ability of nonstate actors to organize – especially entrepreneurs – and the level of favoritism provided by state officials to tycoons. The power dynamics in SBR lead to different SBR modes and different economic outcomes, one of which is the development of industrial clusters and how efficient they are in fostering innovation and productivity in Arab countries. This chapter suggests that the development of industrial clusters in the Arab world necessitates institutional reform, addressing the power relations governing SBR in the region. A more open political system allowing the independence and growth of broad-based business associations and curbing favoritism is necessary for realizing the benefits from implementing recommended policies, leading to cluster development and reaping the economic benefits from such development. Using statistical and regression analysis, empirical evidence supporting these arguments is provided.

The United Nations Industrial Development Organization (UNIDO) (2017, pp. 14–15) identified that “industrialization is the seedbed for entrepreneurship, business investment, technological progress, the upgrading of skills, and the creation of decent jobs.” This placed studying different industrial sectors and their respective clusters, which are key drivers for economy, innovation, and knowledge creation (Slaper, Harmon, & Rubin, 2018), at the forefront of research. This chapter tackles the automobile industrial cluster in Egypt that possesses promising potential yet faces some challenges. It aims to provide an overview of the cluster, alongside underpinning its strengths and obstacles facing it. Moreover, the chapter displays the importance of the labor dimension in increasing the labor competitiveness of the cluster and showcases this through two cases of German automobile manufacturers that pioneered in venturing into the market through employing technical and vocational education and training. In conclusion, recommendations are provided to help in steering the cluster toward success.

Micro-, small-, and medium-sized enterprise (MSME) sectors have a strong influence on the Egyptian economy. Yet, effective formulation of integrated cluster along the value chain can lead MSMEs to become international actors in export-oriented activities. An Agro-Industrial Park is an integrated cluster taking into consideration synergetic agglomeration of agribusiness MSMEs assisting in decreasing deprivation of rural territories. This research aims to present the needs of agriculture MSMEs in Egypt, to describe challenges faced by this specific sector, and to set guidelines for a business model integrating small farmers and producers into an integrated agribusiness cluster. The researcher followed purposive/nonprobability sampling technique of 100 MSMEs research participants. A combination of questionnaires and open-ended interviews were the research instruments of choice along with secondary data. This research focused on agribusiness only and specifically MSMEs in Egypt. There is no agribusiness-integrated cluster in Egypt, even though the agricultural land increased significantly in the past 5 years, leading us to believe that it is imperative to develop agribusiness-integrated clusters in the coming few years.

In the context of Saudi Arabia, this chapter investigates how clustering promotes knowledge sharing and transfer in an emerging, government-directed industry cluster. It is determined that lateral actors play a key facilitating role, and formal and informal mechanisms and interpersonal links among actors support that cluster knowledge exchange. Limited social capital strength and depth and a lack of trust that prevents knowledge sharing are partially explained by the cluster's limited vertical and horizontal actors.

The main aim of this chapter is to analyze the history of entrepreneurship in the footwear cluster during the twentieth century and the dawn of the twenty-first century, around the actions of the manufacturers installed in the city of León, Guanajuato, Mexico. The methodological process was triangulated by three forms of approach to the object of study: the first consisted on the literature review; the second was a longitudinal analysis of socioeconomic and technological indicators; the third was the application of in-depth interviews to five footwear manufacturing entrepreneurs. The main finding was the collaborative model of the footwear cluster in the face of crisis cycles that has historically been facing; this allows to understand the historical challenges of entrepreneurship in the cluster, as well as public policies that have influenced its behavior pattern and the strategies that have outlined its entrepreneurship model.

Enterprise software is a predominant sector in the European software industry. Four of the five largest European software companies are found in this sector. Interestingly, two of these — among them SAP as one of the two global market leaders — are located within the same industrial agglomeration in South-Western Germany. This agglomeration, the SAP cluster, further consists of enterprise software SMEs forming a ‘satellite system’ centred around the large players, which fosters the formation of ‘mutualistic symbiotic’ relationships between large and small firms. At first sight, cluster formation in the context of the enterprise software industry might seem perplexing considering that traditional rationales of agglomeration economies seem obsolete in an environment where advances in communications technology would permit companies to locate in any location within a modern developed economy instead of concentrating in proximity to each other or to major players in the industry. This chapter explores possible explanations of this agglomeration phenomenon based on patterns of competition, collaboration and the formation of social capital between smaller firms and large anchor firms.

The findings of a comparative analysis between the SAP cluster environment and two categories of controls (firms in other agglomerated environments and those unaffected by agglomeration effects within Germany) show that SAP cluster SMEs might simultaneously benefit from heightened intensity of competition and a more pronounced inclination towards collaboration. Moreover, the role of social capital derived from SAP as anchor firm clearly differentiates SAP cluster participants from firms located within other environments.