More than two decades ago, Harvard Business School professor Michael Porter pioneered the concept of clusters, which are geographic concentrations of companies and their suppliers and service providers in certain industries. A classic example was the proliferation of advertising agencies along Madison Avenue in New York.
According to Harvard’s Institute for Strategy and Competitiveness, clusters enhance productivity, better enabling companies to compete.“For example, clusters may not simply reduce the cost of production but the cost of exchange, by enhancing trading relationships and the transparency of local input and output markets,” Porter, along with Temple University’s Mercedes Delgado and the Massachusetts Institute of Technology’s Scott Stern, wrote in March 2011 paper. “The impact of local knowledge spillovers likely does not simply accrue to a single firm in an isolated way; rather, related local discoveries may simultaneously enhance the knowledge base of multiple local firms.”
Lease rates cheaper than malls
"... running a business on a busy street is usually more cost-efficient than leasing space in a shopping centre, where retail tenants are responsible for covering cost of space shared by everyone."
“Sometimes, it can be 30 percent of the rent, whereas on the street, the common-area maintenance is very low,” [Retail consultant Richard] Wozny says. “You’re not looking after a big parking lot and internal mall corridors.”
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