Negative consequences of industrial clustering for socio-economic development

This article provides a comprehensive and systematic conceptual analysis of the negative aspects of industrial clustering, through five main negative effects. An industrial cluster is a geographic concentration of interconnected businesses, suppliers, and related organizations in a particular industry or area. Clusters are characterized by a high level of interaction and collaboration between companies and organizations within them, which can lead to increased innovation, productivity and competitiveness. To illustrate the genesis of the negative impact of industrial clusters on regional growth, a system-agglomeration approach was used. The conceptual mechanism presented in the study showed that most of the negative effects mentioned are associated with the tendency of each industrial cluster to close in on itself in the medium term. The key recommendation for regional politicians aimed at preventing the negative impact of industrial clustering on the socio-economic growth of the region is the development of industry competition through the support of innovation-oriented firms. This simple measure has the potential to reduce the negative effects of industrial clustering and improve the efficiency of the regional economy. However, in practice, the implementation of the proposed measures may face a number of challenges, such as insufficient state support and lack of funding. Therefore, in order to achieve success in this area, it is necessary to take into account all factors and take comprehensive measures to manage regional development.