Can firms build clusters?

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With fundamental changes in the industrial landscape, the global distribution of value-added by countries and regions is evolving. The rise of new technologies, competitive markets, and innovative value delivery processes is shifting patterns towards adaptive regions known as technology clusters. Firms are challenged to reconfigure their activities to leverage geographic advantages, but this comes with significant relocation costs, risking the loss of regional benefits, economies of scale, and firm identity. To address this, some companies are enhancing their homebase economies to counteract historical location disadvantages. This work examines the effectiveness of firms in building clusters and their ability to capture sustainable benefits. It reviews literature on cluster-based growth and explores the relationship between localized cluster externalities and firm value creation. The study analyzes several prominent firm-led cluster initiatives, assessing their impact on regional growth and shareholder returns. Findings suggest that firm-induced cluster development can be a viable alternative to fragmented value chains or internal compensation for unfavorable conditions, depending on location and company specifics. The cases indicate that corporate support for cluster initiatives can yield efficient benefits for local communities, advocating for greater private sector involvement in economic development policy.