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Philippines Exporters Confederation (PhilExport) President Sergio Ortiz-Luis, Jr. urged for the creation of business clusters among member states of the Association of Southeast Asian Nations (ASEAN) in an address before a forum on the ASEAN economic integration titled â€œThe Philippines and the ASEAN: Opportunities, Challenges and Way Forwardâ€ held at the Eastwood Richmonde Hotel in Quezon City.
Ortiz-Luis believes that more opportunities will be created through increased investments and trade in goods and services through setting up of business clusters in the ASEAN. This will strengthen the competitiveness of the region as it aims to establish an ASEAN Economic Community, a single market and production base characterized by free flow of investments, goods and services, by 2015.
A business cluster is a geographical location where related industries on a particular field form linkages giving it a competitive advantage over other regions. Costs of production decline significantly as more firms in related industries cluster together.
An example of a business cluster is the Silicon Valley in California, wherein a surge of computer technology related start-up companies emerged in the area that encouraged more entrepreneurs to relocate or expand their offices there. As an increasing number of companies started up in Silicon Valley, programmers, engineers etc. realized that they would find greater job opportunities by moving to Silicon Valley. Eventually, Silicon Valley became known as a home for many of the worldâ€™s leading high-tech companies.
Philippines News agency