Page 52 - Theoretical and Practical Interpretation of Investment Attractiveness

categories/terms are closely related to each other. Specifically, the investment environment
and clusters play a role in shaping the socio-economic development of regions.
The development of cluster development has a history of about a hundred years.
Differently from industrial production complexes (IPC), a "cluster" maximally considers the
market mechanism and encourages cooperation among enterprises to increase their
competitiveness. Cluster development began in the last 25 years of the 20th century as a
response to public administration needs and the interest of researchers and practitioners in the
field.
One of the pioneers in this field is Harvard Business School professor Michael
Porter. According to his view, the development and development of regions or sectors are
precisely achieved by applying cluster development or by using some of its elements to
achieve higher results.
An analysis of over 100 clusters in 9 countries led to the conclusion that multinational
companies that are highly competitive have achieved their development not by acting
independently in several states but by concentrating in one country or region in a systematic
way. It can be seen that companies with high competitiveness indicators influence the
surrounding economic entities, such as consumers, suppliers, and competitors, through their
positive impact. As a result, the growth of those around them contributes to the company's
competitiveness. This mutual benefit leads to the formation of clusters.
According to M. Porter's observations, a "cluster" is a combination of several
companies related to each other, i.e., providers of essential resources, specific service
providers, infrastructure providers, suppliers, research institutions, educational institutions,
and others, which contribute to each other's competitiveness and, in turn, ensure the
development of the cluster. mutual cooperation.
According to M. Porter, when clusters develop in a particular country or region, the
standard of living of the population and the competitiveness of companies in that area are
high. Therefore, the concept of a cluster is translated as "rising together" in a meaningful
sense. Clusters differ from vertically integrated structures, primarily aimed at organizing
production, by their innovation in promoting specialization, aligning the activities of separate
enterprises, and integrating into the production chain .
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The research conducted so far highlights the significance of clusters, their potential,
and the work done in shaping development. Defining a "cluster" from a theoretical-
methodological point of view, paying attention to the interpretations of foreign scholars who
consider the ideas put forward by them, all this is characterized by the efficient use of
resources for shaping a region's economic environment, increasing the volume of production,
and optimizing the use of resources for the production of goods and services.
Table 1.4.1 presents the definitions of clusters provided by foreign scholars who have
carried out complex work and research in this field. The effectiveness of cluster operation is
assessed based on the results of regional/territorial development, while the efficiency of
vertically integrated structures is evaluated in terms of sectoral indicators.

71 Porter, M. Competition: transl. from English/M. Porter. – Moscow: Publishing House "Williams", 2006
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