Economic Geography

Topics: Costa Rica, Economics, Developing country Pages: 5 (1469 words) Published: November 6, 2013

1a.How do clusters allow us to understand business development? Think of cluster, we think about interconnected businesses working together in a region in a particular field. So being a part of cluster allows individuals or companies to operate more productivity and efficiency. Cluster is a typical place where receive so many support and investment from government and institutions about infrastructure in order to enhance companies ‘s productivity as well as the ability recruit employee with lower cost in training. Moreover, there are so many companies , institutions , specialized suppliers concentrate in the cluster so the employees have a good condition to develop and it opens up more opportunities for finding job so the cluster help attract best talent and produce specialized and experienced employees to reduce search and transaction cost in recruiting. On the other hand, each member can be easy to find and access specialized information which accumulated within the cluster so promote the flow of information and make information more transferable to facilitate technological and knowledge spillovers. The linkage between complementarities business such as hotels, restaurants, outlets and so on are more and more closed. The complementarities development signal opportunities for many employees, develop flowing services to gain more profits as well as create employment opportunities. The cluster also raise in marketing .It enhances reputation of a location in a particular field so it’s easy to attract customer, easy to meet their need when they want to do business. For example entertainment in Hollywood, finance on Wall Street, consumer electronics in Japan . Finally, clusters are often make it easier to compare performance among local rivalry so clusters play important role in competition to renew, reform and spark innovation and new business. 1b.From the case study on building a cluster in Costa Rica, what was the strategy to build on the Intel success and to further develop the cluster? Intel was seeking a location outside of the Southeast Asian countries, they want to find a best region for setting up assembly and testing plant. Intel was considering two site in Latin America or Eastern Europe where can met their generic criteria because they didn’t want to put all their eggs in one basket. They dismissed the Eastern European alternative because they did not believe that any of the countries were completely disassociated with the old Soviet-style model. So Latin America was the best choice especially Costa Rica. They researched and analyzed all things about Costa Rica liked strengths, weaknesses, opportunities and threat. They realized that Costa Rica is located in Central America. It was pretty close to US.”Had the best education system in Central America with the highest literacy rate (95%)”1 English was widely spoken. Computer and Internet users increased continuously. Government was focused on science and technology development. The country enjoyed a political stability with half a century of peace and democracy. Intel also was very clear about what they need at present. They needed a constant supply of high-quality electricity for its plant with a reasonable cost which Costa Rica can adapt perfectly. They also gave some requirements and conditions for Costa Rica before signing the agreement along with profits and investment receiving from this contract. At the same time, Costa Rican government had some reformations to adapt the concept of clusters. 2 .What does an understanding of economic geography allow a company to understand a) when it is choosing locations, b) seeking to find the market potential for certain products and c) developing economies of scale? Economic geography is the study of the location, distribution and spatial organization of economic activities around the world2. So understanding clearly about economic geography is very useful for a company which...
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