Industrial clusters and the process of their self-organization: a view of the region from the perspective of a circular economy


Discussions about the importance of industrial clusters and their impact on spatially localized economic systems have gained a significant place in academic circles over the past quarter century. At the same time, previous studies have identified only a small part of externalities that have a significant impact on the behavior of firms, but only a few of them paid attention to the process of self-organization of clusters. This document is an addition to the literature on understanding the process of self-organization of a cluster from the point of view of its fundamental causes, characteristics of its origin, formation and development.

Clustering is one of the key drivers of regional economic growth [1]. Cluster development is a dynamic process determined by a variety of internal and external factors caused by a whole range of effects, due to which the cluster growth models may differ significantly from each other and will be somewhat unique. However, the clustering process, its evolutionary model, can be visualized (Figure 1.).

Figure 1
Figure 1. Dynamics of industry clustering

Usually, four stages of cluster development are considered:

  • Inception (embryonic) clusters - those in the early stages of growth;
  • Growth (established) clusters - with prospects for further growth;
  • Maturity (mature) clusters - stable clusters, further growth of which is difficult;
  • Declining clusters - those that have passed through the peak of their development and are experiencing a decline. At this stage, the clusters sometimes show the ability to revive through renewal (transformation) - and a new cycle begins.

In this paper, the authors will consider regional clusters, which, according to experts [2, 3], include a geographically limited cluster of interdependent firms, and can be used as a keyword for old concepts such as industrial areas, specialized industrial agglomerations, systems and local production systems. In addition, according to Martin and Sunley, today economists and geographers working in these areas have proposed a wide range of neologisms 


intraindustrial agglomeration, self-organization, industry clusters

Research question

The purpose of this article is to study industrial clusters and the process of their self-organization in the region from the point of view of a circular economy. In this regard, the paper considers the evolution of the theory and methods for assessing the nature of the concentration of local business, and also studies the main parameters of the development of the Kaliningrad region, indicates the problems and prospects of its development. This study will be useful for building a circular economy and planning the development of industrial clusters in it, as well as optimizing existing models for other industries and regions.

Main method

Currently, it has been proven that a continuous spatial approach is critical, since it allows one to determine the spatial extent of the emerging agglomerations, which is one of the main important characteristics of the spatial economy. So in their work M. Fujita, P. Krugman, A. Venables "The spatial economy: Cities, regions, and international trade" [5] characterized the shape of the emerging clusters by performing numerical calculations of the preferred wavelength, that is, the wavelength of the dominant unstable spatial indignation. Since continuous spatial models can be used to derive endogenous spatial scales, they are undoubtedly a step towards understanding the functioning of both regional and global economies.

In my work, the author of this article uses the approach developed by Krugman, which is presented below in the form of a diagram (Fig. 1) illustrating the "core-periphery" model. The horizontal axis represents trade costs, and the vertical axis represents the share of any region in manufacturing. Solid lines indicate stable equilibrium states, dotted lines indicate unstable equilibrium states.

Fig.2 Core periphery model.
Figure 2. The core-periphery model. Source: Paul Krugman. Wikipedia, 14 September 2021 Wikipedia,

The model of the center and the outskirts explains the reasons for the concentration of economic activity in one of the two regions. But in reality, economic activity spreads in a continuous space with many regions. The author of this study uses this approach in order to better understand industrial clusters and the process of their self-organization in a region from the perspective of a circular economy.

Main results

Stimulating the development of industrial clusters is one of the tasks of the Industry Development subprogram of the Kaliningrad Region's State Program for the Development of Industry and Entrepreneurship, approved by the Resolution of the Government of the Kaliningrad Region No. 144 dated March 25, 2014.

In accordance with the specified strategic planning document, the state policy is being pursued to form clusters in the following industries: 1) the automotive industry; 2) the shipbuilding industry (including a set of enterprises engaged in the repair of ships and vessels); 3) amber industry.

Table 1 below provides information on the "Shipbuilding cluster" of the Kaliningrad region..

Table 1. Shipbuilding cluster of the Kaliningrad region

For historical and geographical reasons, shipbuilding has long become one of the priority industries in the Kaliningrad region, and for this reason in 2018the cluster "Cluster of shipbuilding and ship repair of the Kaliningrad region" was formed.The cluster already includes 33 organizations; more than 5,000 people are employed at the enterprises of the cluster. Cluster residents get the opportunity to build vessels for a wide variety of purposes. PSZ Yantar, the largest shipyard, is one of the members of the cluster, due to which not only the civilian direction of shipbuilding, but also the military-industrial one, is closed. The main specialization of the cluster members: the construction of ships, ships and boats, floating structures, pleasure and sports boats.

Main conclusion

The main directions of the cluster development:

  • growth of competitiveness and economic opportunities of organizations participating in the Cluster;
  • cooperation of cluster members should lead to equal broad access to innovations, as well as to ensure the transfer of technologies that will be aimed at developing a circular economy in the region;
  • the industry should become attractive for highly qualified personnel, as well as contribute to the development of a system of training and advanced training of scientific, engineering and technical, managerial personnel and production personnel;
  • development of all components of the infrastructure of the Cluster;
  • creation of a base of possible joint investment projects for the Cluster members to launch, as well as simplified access of the Cluster members to financial (credit) resources and government support measures;
  • promoting the development of small and medium-sized businesses in the Cluster;
  • representing and increasing the competitiveness of the Cluster members in the domestic and international markets through the comprehensive use of circular economy approaches.


  1. He, J., & Fallah, M. H. (2011). The typology of technology clusters and its evolution—Evidence from the hi-tech industries. Technological Forecasting and Social Change, 78(6), 945-952.
  2. Rosenfeld, S. A. (1997). Bringing business clusters into the mainstream of economic development. European planning studies, 5(1), 3-23.
  3. OECD (2001) World Congress on Local Clusters: Local Networks of Enterprises in the World Economy. Paris, 23-24 January 2001. Issues paper (Paris: OECD)
  4. Martin, R., & Sunley, P. (2003). Deconstructing clusters: chaotic concept or policy panacea?. Journal of economic geography, 3(1), 5-35.
  5. Fujita, M., Krugman, P. R., & Venables, A. (1999). The spatial economy: Cities, regions, and international trade. MIT press.


Ruslan Polyakov, Ph.D.  Assoc. Professor, Docent Department of Economics and Finance

Kaliningrad State Technical University Kaliningrad, RUSSIA

Last modified: 2021-10-19