Innovation, learning and cluster dynamics

This chapter offers a theory and method for the analysis of the dynamics, i.e. the development, of clusters for innovation. It employs an analysis of three types of embedding: institutional embedding, which is often localized, structural embedding (network structure), and relational embedding (type and strength of ties). The analysis is conducted from a perspective of both competence (learning) and the governance of relational risk, which includes risks of dependence and spillover. It employs results from earlier research in organizational learning and innovation, and in the management of inter-organizational relations. A basic proposition is that innovative clusters face the challenge of combining exploration and exploitation. Hypotheses are specified concerning differences between networks for exploration and exploitation, and concerning combinations and transitions between them. Arguments are presented that in some important respects go against the thesis of the ‘strength of weak ties’. Some empirical evidence is presented from recent studies.