The term business cluster, also known as an industry cluster, competitive cluster, or Porterian cluster, was introduced and popularized by Michael Porter in The Competitive Advantage of Nations (1990). The importance of economic geography, or more correctly geographical economics, was also brought to attention by Paul Krugman in Geography and Trade (1991).Cluster development has since become a focus for many government programs. The underlying concept, which economists have referred to as agglomeration economies, dates back to 1890, and the work of Alfred Marshall.
What is the focus in the Aerospace cluster analyses we need to address?
Michael Porter claims that clusters have the potential to affect competition in three ways: by increasing the productivity of the companies in the cluster, bydriving innovation in the field, and by stimulating new businesses in the field. According to Porter, in the modern global economy, comparative advantage- how certain locations have special endowments (i.e., harbor, cheap labor) to overcome heavy input costs - is less relevant. Now, competitive advantage - how companies make productive use of inputs, requiring continual innovation - is more important. Porter argues that economic activities are embedded in social activities; that 'social glue binds clusters together. This is supported by recent research showing that particularly in regional and rural areas,significantly more innovation takes place in communities which have stronger inter-personal networks
To sustain cluster performance in the long term, clusters need to manage network openness to business outside the cluster while facilitating strong inter-organisational relationships within the cluster.
Porter,Michael Location, Competition, and Economic Development: Local Clusters in aGlobal Economy|journal=Economic Development Quarterly, vol 14, no.1, 2000  Porter, M.E. 1998, Clusters and the new economics of competition, Harvard BusinessReview, Nov/Dec98, Vol. 76 Issue 6 Porter, M.E.(1990). The Competitive Advantage of Nations. New York: The Free Press. Krugman, P.(1991). Geography and Trade. MIT Press. Porter,Michael (1998). On Competition. Boston: Harvard Business School Press.
Elaborate on the role of theory, theoretical framework, related models and methods.
Following development of the concept of interorganizational networks in Germany and practical development of clusters in the United Kingdom; many perceive there to be four methods by which a cluster can be identified:
Geographical cluster - as stated in the automotive cluster in Germany
Sectoral clusters (a cluster of businesses operating together from within the same commercial sector e.g. pharma (south east England; ICT ) and aerospace (France, UK and Germany)
Horizontal cluster (interconnections between businesses at a sharing of resources level e.g. knowledge management)
Vertical cluster (i.e. a supply chain cluster)
It is alsoexpected - particularly in the German model of organizational networks - thatinterconnected businesses must interact and have firm actions within at leasttwo separate levels of the organizations concerned