Clusters in developing contexts: Exploring new determinants of failure in conglomerative actions KataishiR,, Valle 1,, Romano, S. National University of Tierra del Fuego, Argentina Introduction This work is focused on recent experiences regarding the implementation of conglomerative actions in developing contexts. Particularly, it will refer to the latest attempts to develop productive clusters in Tierra del Fuego, Argentina, the southern urban center of the planet. The literature on clusters’ goals, conformation, implementation and limitations is notoriously abundant, involving a wide set of tools and examples that put in consideration how these policies are able to transform the productive reality of specific contexts. The heterogeneity of experiences derived from literature brings several strategies to achieve success on conglomerative actions (or to avoid inconvenient dynamics that may affect negatively the cluster behavior) This work aims to stress a two-sided issue: the first is to review nature of existent “formulas” on cluster development and implementation, especially considering the approaches promoted by international organizations (which are, in general, those that funds these initiatives); the second, the main contribution of this work, is driven by the need of additional reflections on how these policies take form in remote places within developing contexts and, specially, what are the problems that are not been taken on consideration by the former approaches from both, the conceptual and the empirical perspectives.Theoretical Framework Much of the current literature on clusters development pays particular attention to the theoretical aspects that justifies their implementation. There is a consensus among social scientists and economists that clusters and, in general, conglomerative actions tend to foster innovation activities through the promotion of higher connectivity and knowledge generation, codification and circulation derived from the first (OECD, 1999). Within this literature, it is assumed that firms are involved in a technological cycle that is driven by the Schumpeterian creativedesctruction dynamics (Shumpeter, 1947, 1943; Metcalfe 2010}, in which the acquisition, translation and implementation of new pieces of knowledge lead to novel technologies that are usually manifested in innovations and, hence, extraordinary benefits (Biais, 2010; Kim and Mahoney, 2007). The context from which knowledge is acquired is a key element of this perspective, defining particular innovative environments (Vale, 2004) with specific features anchored in countries, regions, and particular territories that are able to nurture or limit several aspects of the learning dynamics (Giunta, Lagendijk and Pike, 2016). ‘What we know about associative initiatives, and in particular about clusters, is largely based upon empirical studies (Bergman and Feser, 1999; Martin and Sunley, 2003) that investigate how different types of conglomerative experiences manifest differently according to the territory, the actors, the institutions and, in general, the particular environment in which the actions take place (Rocha, 2004). The outcomes of these experiences, even with similar funding and strategies, may vary largely according to the context characteristics, making necessary the assumption of triakerror processes during the implementation processes (Porter and Sterns, 2001). Some issues have been emerging from this conceptual approach and methodology and are related specifically to the unpredictability of many dimensions derived from context and actorspecific situations in which policies are applied (Feser, 1998). Traditionally, it has been argued that this kind of heterogeneity actually boosts the reasons to interact (Roelandt et al., 1997) and raises the possiblity of richer, better outcomes derived from the cluster implementation (Tédtling and Trippl, 2005). However, in spite of the efforts put on the standardization of conglomerations methodologies, some (in some particular contexts, many) of these processes tend to fail, especially within remote regions of developing countries. Results: the case of recent clustering attempts in Tierra del Fuego, Argentina This work takes the form of two case-studies of cluster implementation in developing contexts. Both took place in Tierra del Fuego Province, the southern region of Argentina and the ‘American Continent. They were implemented in two different cities, Ushuaia (estimated population of 100.000) and Tolhuin (estimated population of 7000), which are 100 km. away one from each other, focusing the intervention in two particular sectors: the wood production chain and the crafted fishing activity. Both qualitative and quantitative methods were used in this investigation. The data collected is based on in-deep interviews to key actors within the production chain, workers, institutional representatives (of the municipality and province levels) and specialist that had experiences in the mentioned areas. The first case regards the wood production chain, oriented to a variety of tree named Lenga, which is one the traditional activities of the Province since its very first modern population, dating of more than a hundred years ago. The goal of the conglomeration policy was to enforce the conformation of an internal production chain, linking different producers in order to integrate their efforts and generate the emergence of new business opportunities. These efforts were driven by the Municipal and Provincial Governments since year 2000, with multiple funding sources (including local, national and international lines). Romano (2015) draws on an extensive range of elements to assess the multiple levels of incongruences and tensions that limited the development of the conglomeration activities. Inparticular, she addresses three main aspects to underline that find determinant in the explanaition of the case. These aspects regard capacities issues, coordination failures and institutional problems, In her analysis of the micro conditions of the wood sector, Romano (2014) identifies five characteristics of the firms that are involved in this production chain. The first has to do with costs and labor incentives to work within the sector, showing that wages of the wood sector are notoriously lower than in other industrial activities (and other activities in general, leading to the lack of incentives to work in the area, and generating a labor supply problem. This element leads to a second problem related to the limited formation of the workers and their ‘weak relation with the jobs, causing inefficiencies in almost all the linkages of this productive chain, The important weight of individual agents in every linkages of the productive chain turns the collaborative strategy into a very volatile and sporadic dynamic. This particular situation is accentuated by the use of the wood production to finance other commercial business not linked to the chain, leaving behind the interests on further developments towards efficiency gains within the activity. Additionally, there are tensions underlined by Romano’s work, stressing the co-existence of multiple actions that tends to enter in conflict: the sustainability of the activities in ecological terms, and their lack of complementarities with other primary activities; the lack of information on the sector, their capacities and their incentives, leading to policy actions vaguely designed; last, the enforcement of the vast set of norms that are currently operating is very weak, in part due to the large extensions of land to cover and partially due to budget restrictions in particular offices, drastically affecting the role of control that the State embodies in the use of natural resources. The case of crafted finishing activities was studied by Valle et. al. (2016), after a World Bank funding to consolidate a productive cluster in the south of Ushuaia City. This case refers tosmall producers and entrepreneurs that are dedicated to supply Ushuaia’s restaurants with premium quality oysters, molluscs and fish. The main restrictions found on this experience relate a weak integration of the linkages and, specially, deficiencies in micro-level capabilities. Especially upwards in the chain, in which relatively more complex manufacturing processes are needed, the weaknesses were more notorious. The capital required to implement this kind of integration involves a minimum level of formality and regularity in the supply, not present in the value chain due to weather conditions, ships availability and, specially, regularity on the labor force that works in the sector. At the firm level, several training sessions, courses and in-field experiences were carried, however, the adoption of new techniques was hardly manifested (even in cases in which were oriented to the sea sustainability). Inertia that makes prevail previous behavior, power share and market share are one of the most critical issues identified, not only at the firm level, but also at the institutional and academic dimensions inertial behavior was also recurrent. Conclusions and Final Remarks ‘The purpose of the current study was to determine some common aspects on experiences that aimed to develop a productive cluster in remote areas of developing countries. Despite its exploratory nature, this study offers some insight into the cluster dinamics and implementation problem. The study has found that generally the restrictions on the implementation of these conglomerative actions can be understood as a multi-level problem, composed by the micro-level and the meso-level problems. ‘Taken together, the micro level conclusions suggest that there is an inertial behavior that limits the involvement of the private sector in associativist mechanics, even if the results report a gain in profit for them. The main reasons behind this behavior can be found in the trend to maintain the previous status quo, in which firms were operating with a customer base, amarket share and a set of political relations that were working before the conglomeration process. The possibility of the raising of new players, the empowering of other firms and the involvement institutions that were out of the production system before the clustering initiative is, indeed, one of major restrictions identified. The meso-level of restrictions are related toboth, the institutional side of the implementation, and the generation of incentives towards the permanence of the practices carried in the implementation of the conglomerative actions over time. Two institutional features play a major role in this kind of problems: the capabilities of the personal involved, which give form and dynamic to the government-privates interaction; and the continuity of actions after the specific program deadline (or the government cycle), which give the opportunity to explore in a deeper way the determinants of success and the restrictions on the implementation of these types of initiatives. Collectively, this study outlines a critical role of context specific dynamics in the cluster conformation policies design. In general, it seems that private practices that bring some kind of success before the clustering are very difficult to transform, in particular if the relations amongst actors are deeply engaged in personal terms (typical scenario in very small cities) This research has thrown up many questions in need of further investigation, in particular regarding how policies are able to modify these conducts in both, institutional and private actors, that tend to lead to failure the conformation of productive clusters.Bibliography Bergman M, Feser EJ. (1999). Industrial and regional clusters: concepts and comparative applications. Economic Development Quarterly 9 (3): 225-37. Biais, B. (2010) innovations, Rents and Risk. Toulouse School of Economics WP 10-200. Feser E, (1998). Old and new theories of industry clusters. University of North Carolina at Chapel Hill Giunta A,, Lagendijk A. and Pike A., (2016). Restructuring Industry and Territory: The Experience of Europe's Regions. 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