Investigation of Skill-Training and Employment in Industrial Clusters: A System Dynamic View

Business clustering is a modern approach which has attracted much attention in both political and research circles. According to scientific research, industrial clusters can result in employment increases and wealth creation in regions. They can also reinforce skill training to supply skilled workers for local businesses. The mechanism of producing this result is not clear yet. This study aims to provide a holistic and comprehensive view  to clear the processes of employment and training in clusters. A system dynamic approach has been adopted to clarify variables and relations. Variables extracted from literature and causal loops drawn using system dynamic standards. The research method is descriptive survey using system analysis techniques. The study shows that two major causal loops (employment and skill training) have common variables with the same effects unless technology which has a different effect on employment and skill level. The study recommends enhancing demand level in order to enforce the natural employment level in clusters.