Clusters as a Factor of Logical Economic Development, the Case of Czecs Republic

The concept of clusters, as the empirical phenomenon of geographical concentration of economic and innovation activities, is recognized as one of the key factors for strengthening small and medium-sized enterprises, which are believed to be the driving force of local economic development. The evidence suggests that local economies that are based on networking and cooperation between companies, financial institutions, public and academic actors, as well as different organisations, generate better outcomes. Clusters are significantly related to prosperity and local economic development by providing an environment that is conductive to innovation creation and knowledge spillovers, vertical integration and specialisation, pressure for competition, supply chain creation, and competitiveness and employment growth. The role of national governments at all levels in creating and implementing cluster policies has been increasing in the last decade. Through various policy actions, programs and cluster initiatives, governments provide much needed support and initial platforms for dynamic growth of clusters. The case of Czech Republic is presented as an example of successful cluster policy development. The analysis of two specific clusters, supported by the government, illustrates their significant impact on economic development of regions