Economic science /6. Marketing and management

Zhunusov K.M., Candidate of economic science, technical sciences PhD

Kostanay State University after A.Baitursynov

The regional cluster concept of an effective development in agricultural sector

The regional or interregional cluster is a set of interrelated sectors of the economy including the basic industries (profiling for the region), the suppliers and consumers sector of their product, as well as manufacturers of appropriate equipments and services.

The founder of the cluster theory, Michael Porter, underlines cooperative and complementary company groups of attended industries and institutions can improve national and regional competitiveness in the world market.

The cluster as an intersectoral production complex is a mid-level of the economy.

From our point of view, the cluster concept develops the theory of multilevel economy substantiating the mechanism for involving the qualitative resources on the basis of interindustry interactions. However, it is the subject of heated dispute in economic literature. The radical-liberal economists support a maximal limitation of intervention by government in economy; they deny any ideas of selective support the industrial sectors ("point of increase"), as well as in principle, the state is not able to assess correctly which sectors will determine the development of economy in a long-term outlook.

The experience of Finland and other countries of the Northern Europe, confirms the value of the other concept: the state and its regional authorities are called for facilitating selection, formation and development of clusters. From our point of view, it should be underlined the other important issue that cannot be solved on the basis of inertial development under the influence of spontaneous market forces; it is critical and dangerous differentiation of the regions’ progress in Kazakhstan and including development of agricultural sector.

According to the conclusions of M. Porter about competitive advantages, the clusters reflect tendency towards integration and socialization of economy.

Nowadays the issues of overcoming raw material orientation of exports and the share raise of sectors with medium and high value added quota is not resolved without support of the regional structure of business entities with a certain geographical proximity, and interrelated attitudes of the consumer and the supplier and being based upon innovations and human resources with high-level potential, it is relevant to any scope of activity, as well as the agricultural sector.

Food industry is characterized by effects of economies scale, notably the manufacturers reduce its prime cost by increasing the scale of production of outputs. At present the processes of horizontal integration is taking places in the global food industry therefore.

For instance, it is needed to highlight the flour-milling industry sub-sector in Kostanay oblast, Kazakhstan. Flour and cereal products have a sufficient volume of exports to the neighbouring regions of Central Asia, the Caucasus, the Arabian Peninsula, Europe and Russia. There is in fact a powerful cluster with well-developed infrastructure and the enterprises which have sufficient facilities for production of flour and cereals. But anyway we must confess that manufacturing work with a higher extra cost has been at a low level yet; it is not applied innovative know-how in reprocessing of grains and cereals.

The development of corporations occur vertically-integrated structures and diversifying aggregations in the agricultural sector of Kazakhstan. It is shown in the management structure, industrial and investment activities most of the largest holding companies and corporations in the agro-industrial complex of Kazakhstan, e.g. KazAgro national governing holding, "Ivolga – Holding" Ltd, "Alibi Holding" Ltd, JSC "Tsesna Corporation", JSC "Kazexportastyk" and etc.

The main organizational economic form of interregional economic integration of clusters development in agriculture and accompanying sectors of food industry as a whole should become corporations and companies vertically integrated.

The capital aspect of forming a sustainable competitiveness in the agricultural sector is the progress of agro-industrial clusters as a system of independent manufacturing and/or service companies (including their suppliers), technology and know-how creators (universities, agricultural research institutes), binding market institutions with consumers, and interacting with each other in the network of a single value chain in agriculture.

Bibliography:

1. M.Porter. Competitiveness. – St.Petersburg: “Williams”, 2002. – p.495

2. Porter M. The competitive advantage of nations. N.Y., Free press, 1990.
3. Reinert E. Competitiveness and its predecessors-a 500-year cross-national perspective. Oslo, 1994.
4. Barkley O., Henry M. Advantages and disadvantages of targeting industry clusters. Clemson, 2001.