Cluster mapping as a catalyst for competitiveness and entrepreneurial ecosystem development: evidence from the Old City of Jerusalem

Purpose This study aims to create a cluster map for the souvenir sector in the Old City of East Jerusalem, positioning it as a vital catalyst for enhancing competitiveness and improving the ecosystem for sustainable development. Design/methodology/approach The methods for identifying and facilitating industry clusters constantly evolve and incorporate new techniques. This research contains meso-level analysis, which examines employment and industry concentrations, and micro-level analysis, which includes personal interviews and case studies. A structured questionnaire was given to a random sample of 189 participants to ensure accurate data. An exploratory factor analysis (EFA) and descriptive exploratory analysis were conducted to accurately estimate and interpret the findings while revealing the underlying relationships between variables. The study employsed simple random sampling, with 105 responses from 189 attempts, representing a response rate of 55.6%. Findings The research underscores the links between the cluster mapping process and the dynamics of Porter's diamond model: factor conditions, demand conditions, related and supporting industries and the context for firm strategy, structure and rivalry. While these elements are pivotal, they often remain overlooked, with neither shop owners nor the government taking proactive measures to bolster cluster mapping. The analysis revealed interesting cross-loadings between factors, with some unexpected results that enrich our understanding of how Porter's diamond applies in fragile contexts. Research limitations/implications This case study of East Jerusalem has limited generalizability, highlighting the need for research in other geographic areas. Recommendations include micro-grants for shop owners, collective branding, procurement platforms, low-data digital tools and cluster management organizations to enhance coordination. Comparative studies in other fragile economies could improve the findings’ external validity. Practical implications While cluster mapping can enhance souvenir shops’ operational efficiency and competitiveness, its success in promoting competitiveness and improving the entrepreneurial ecosystem for sustainable development in East Jerusalem depends on a stable, cooperative and supportive ecosystem for all stakeholders. Originality/value This study contributes to the existing body of knowledge by establishing connections between theoretical frameworks, including Porter’s Diamond Model and cluster theory, and real-world contexts in a challenging environment. This synthesis of theory and practice enhances the relevance and application of cluster mapping methodologies, thereby introducing a novel and insightful perspective to the discourse surrounding competitiveness and the entrepreneurial ecosystem within the souvenir industry of East Jerusalem.