Enhancing industrial cluster formation through the realistic export opportunities of the TRADE-DSM

Abstract

This paper explores the natural synergies between industrial cluster formation and the identification of realistic export opportunities (REOs), using the TRADE-DSM1 for a resource-dependent region, the North West Province of South Africa. The structural path analysis and power of pull methods were applied to a provincial social accounting matrix to identify the top industrial clusters. Ten industrial clusters were identified and matched to the results of the TRADE-DSM. Six of the industrial clusters analysed had REOs. These results provide a basis for focused export market development and for the formalisation of the cluster initiative as a strategy for sustained economic and export growth.