Co-evolution of Firms, Industries and Networks in Space

TERWAL A. L. J. and BOSCHMA R. Co-evolution of firms, industries and networks in space, Regional Studies. The cluster literature suffers from a number of shortcomings: (1) it often neglects that cluster firms are heterogeneous in terms of capabilities; (2) it tends to overemphasize the importance of geographical proximity and underestimates the role of networks; and (3) it hardly addresses the origins and evolution of clusters. The authors propose a theoretical framework that brings together the literature on clusters, industrial dynamics, the evolutionary theory of the firm, and network theory. It is described how clusters co-evolve with: (1) the industry with to they adhere; (2) the capabilities of the firms they contain; and (3) the industry-wide knowledge network of which they are part.