Connection between Cluster Development and National Competitiveness: Regional Focus on Western Balkans

During the last decade of the 20th century, the importance of clusters has been increased as an integral element of development strategies aimed at improving national competitiveness in a globalized economic environment. Linking of firms in clusters increases business efficiency, but also the ability for innovate the business processes and reduce barriers to entry into a particular market. Monitoring the pace of cluster development is particularly important in countries that are trying to become innovations driven economy. The aim of this paper is to determine whether the speed and direction of changes in cluster development follow the changes in the achieved level of national competitiveness in the countries of the Western Balkans (Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia) in the period 2008-2016. The realization of the basic goal of the research was carried out using the methods of correlation analysis, multi-criteria optimization, descriptive statistics and comparative method. Practical implications of the research results suggest that faster cluster development in the Western Balkan countries is just one of the many economic factors that can contribute to a faster transition to a higher stage of national economies development. The key contribution of this research is reflected in a clearer understanding of the importance that cluster development has in improving the national competitiveness of the Western Balkan countries and providing recommendations regarding the activities of competent state authorities whose implementation can lead to the improvement of the state of cluster development and raising the level of national competitiveness of the countries of the region.