Driving industrial clusters to be nationally competitive

Industrial clusters have received considerable attention from economists and industrial analysts. The main purpose of this paper is to contribute to the understanding of the driving forces behind the growth of industrial clusters. Another core viewpoint anchored in this paper is that national competitive advantages can be achieved by industrial clusters. We examine the impacts of and determine the relationships among different driving forces. Taiwan’s Hsinchu Science Park, because of its connection with innovative participators, is a prime example for this paper. This research adopts the Decision Making Trial and Evaluation Laboratory (DEMATEL) as the main analytical tool. Our research results show that local demand conditions and factor conditions (which are specialised factors of production such as skilled labour, capital and information infrastructure) are the main causal driving forces for advancing Taiwan’s industrial cluster performance. This paper concludes by discussing managerial implications for industry and government.