INDUSTRIAL CLUSTERS, SCHUMPETERIAN INNOVATIONS AND ENTREPRENEURS’ HUMAN AND SOCIAL CAPITAL A Survey of Literature

In developing countries, to achieve poverty alleviation, it is important to develop industrial clusters because they not only create substantial survival-type employment opportunities in the manufacturing sector but also seed-beds for further industrial development by creating economies of agglomeration. However, most of the industrial clusters in developing countries have performed poorly relative to what appears to be their growth potentials. In search of what are the decisive factors that affect the dynamic development of a cluster, this short article underscores the importance of Schumpeterian innovations and entrepreneur’s human and social capital for the cluster’s long-term survival, sustainability, and competitiveness. Further, this study suggests that by providing training to entrepreneurs of the existing clustered enterprises, rapid industrial development can be achieved in developing countries.