Page 56 - Theoretical and Practical Interpretation of Investment Attractiveness

Implementing the cluster approach to governance, based on external and local
experiences, theories, and methodologies, is effective when there is an appropriate
infrastructure, allowing for the successful application of cluster development principles to
business activities, which leads to the conclusion of the feasibility of its implementation.

1.4.1. Diagram. Cluster formation algorithm
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For this, it is necessary to develop an algorithm for clustering in regions. Based on the
diagram 1.4.1, it is possible to see that, based on the state policy, the existing opportunities of
the region, and its socio-economic capabilities, a certain strategy is developed and
implemented, aimed at its sustainable development.
The development of the cluster depends on the condition of the factors and the
effectiveness of the supportive networks, but most importantly, it is related to the region's
demand for goods and services. It is formed exactly based on the demand for use, the
availability of factors, the level of opportunities, and the influence of industries, networks,
and the state's economic policy. According to these conditions, the attractiveness of the
region's investment environment is assessed, which is a factor in both internal and external
investments.
According to the identified and collected data, the following stages and institutions of
the infrastructure for supporting entrepreneurship in the process of innovative cluster
development are operating globally:
Stage 1. Identification of permanent participants in the cluster and development of
regional strategies for economic clustering - Cluster Development Centers.

74 Compiled by the author

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