Land-based Economic Clusters and their Sustainability: The Case of the Horseracing Industry

Abstract

This paper demonstrates how a traditional land-based cluster provides significant economic and environmental benefits to a local economy and for a protected landscape. The focus is the group of businesses that have clustered around the North Wessex Downs (NWD) in Southern England and which are engaged in activities supporting the horseracing industry (HRI). A review of the literature on competitiveness and economic clusters is provided and indicates the need for more attention to be paid to the sustainability credentials of such industry clusters. This should form part of the wider discussion about economic development and agglomeration economies, as well as in developing so-called ‘underachieving’ clusters. The paper contends that there is a clear need to better understand traditional land-based clusters and an opportunity to maximise economic and other benefits.

Notes

¹ The Regional Economic Strategy for the South East 2006–2016 states, for example, an aim to: ‘stimulate rural enterprise and nurture new and existing businesses based on good market intelligence, making use of networks and collaborations, co-operatives and centres of excellence’ (SEEDA, 2006: p. 69, para 5.4) as part of the drive to deliver a competitive economy.

² Gross Value Added (GVA) has been calculated on two bases: (i) the same basis used by KMPG (2005), which is as 31 per cent of expenditure. We refer to these as the ‘KMPG assumptions’; (ii) the basis used by the Office for National Statistics, which is the residual of total output (or revenue in the following tables) less intermediate consumption (which is expenditure less employment costs or wages). This can also be calculated as the sum of Gross Operating Surplus (profits) and costs of employment (wages); this is labelled ‘Based on definition used by ONS’.

³ It is estimated that there are about 2500 horses in training around Newmarket, slightly more than in the NWD AONB (National Horseracing Museum, 1999).

⁴ The multiplier applied to the GVA is the Output Multiplier. It measures the change in the total economy output caused by an increase in demand for a product, in this case the horseracing industry. The Leontief Inverse multipliers applied are 1.823 for trainers and racecourses (industry group 121) and 1.913 for stud farms and livery yards (industry group 1) (Source: 1995 Current Price Input Output: Analytical Tables Leontief inverse (Product by Product), updated 10 May, 2002).

⁵ Source: Office for National Statistics, UV34.