Adjustment or renewal in regional clusters?: a study of diversification amongst SMEs in the Aberdeen oil complex

A renewed interest in the spatial clustering or agglomeration of economic activity is evident within economic geography and related fields. This paper considers processes of change within 'mature' regional clusters, developing a conceptual framework which links firm-level strategies to development scenarios at the cluster level through a set of intervening mechanisms. We distinguish between two development scenarios: renewal which involves significant change, enabling the cluster to sustain its prosperity, and adjustment which is associated with stagnation and gradual decline. This conceptual framework is applied to an analysis of one key mechanism of change, diversification, as pursued by small and medium-sized enterprises (SMES) in the Aberdeen oil cluster. Our analysis indicates that some diversification is occurring, with the implications for the cluster lying midway between adjustment and renewal. In conclusion, we emphasize the need to assess and 'unpack' the clusters concept and suggest that research should focus on the relationships between proximity, learning and evolution.