Clusters are geographic concentrations of various industrial, scientific and governmental actors, and have been found to trigger and improve the innovative performance of firms inside. This paper gives a review of prevailing cluster theories, as well as several examples from the real economy. Knowledge spillovers, inter-firm linkages and reduced business risks for start-up firms present some of the advantages that foster firms’ innovative activity in clusters. The success of prominent clusters such as the Silicon Valley has encouraged governments to support the formation of clusters; however, technological changes might as well lead to failures of clusters. Despite the advances of a globalized economy, physical proximity in clusters has been shown to transmit input for innovation more successfully than virtual innovation networks.
Table of Contents
List of abbreviations
List of figures
1. Introduction
2. Cluster and location theory
2.1 Defining clusters and cluster participants
2.2 Identifying regional clusters
2.3 Underlying theory
2.3.1 Classical location and agglomeration theories
2.3.2 Contemporary cluster theories
2.4 The ceramic tile cluster in accordance with Porter’s diamond model
3. Clusters as trigger for innovation
3.1 Enhanced innovative performance in clusters
3.1.1 Knowledge spillovers, inter-firm linkages and reduced risks
3.1.2 Innovation through advantages in capital, labor and firm structure
3.2 Cluster policy and practical recommendations
3.3 Failures due to retarded innovation and technological change
4. New approaches through technological advances and globalization
4.1 The death of distance
4.2 Virtual innovation networks
4.3 Globalizing vs. localizing: the location paradox
5. Conclusion and outlook
References
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