Michael Porter defined clusters as “geographically proximate group of interconnected companies and associated institutions in a particular field, linked by commonalities and complementarities. The geographic scope of clusters ranges from a region, a state, or even a single city to span nearby or neighbouring countries.”
The above diagram shows the Biopharmaceutical Cluster in Mumbai.
Creation and strengthening of regional clusters is very important for a nation to produce high value products and services. Clusters not only enhance the productivity of a region but also stimulate innovation by bringing together technology, talent, information, competing companies et al.