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Knowledge Networks and their Implications for the Growth of Industrial Innovation Clusters

Author Jisoo Kim, Changuk Byeon Date 2019.06.28 Series
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A cluster is a geographic concentration of interconnected companies and associated institutions in a particular field. It is widely accepted that clusters generate better economic performance than simple aggregations of companies, as mutual influence between clusted firms makes knowledge sharing and diffusion much easier. In this process, the novelty and diversity of accumulated knowledge is an important source of sustainable innovation and growth for the cluster. The more diversified the combined knowledge, the greater the scope and possibility of new knowledge creation.
The heterogeneity of knowledge accumulated in a cluster changes with the life cycle of the cluster and contributes to the evolution of the cluster. In the stage of cluster formation, various combinations of knowledge are actively produced through the integration of companies and their interactions. This gives the cluster a competitive advantage to help firms cope with changes in the external environment and thus to grow further. As the cluster matures following the stage of formation, clusted firms come to resemble one another as their relationship lasts for a long time. In this process, clusters that have lost their competitive edge due to the technological lock-in suffer stagnate or decline. Successful clusters, on the other hand, adopt and recombine new knowledge and skills to adapt to changing environments and expand their dynamic growth path.

This makes it possible for clusters create new paths for re-growth, not just follow a single path such as emergence-growth-decline.