The evolution of business networks and clusters

Clusters can be seen as evolving on several different levels. This chapter seeks to integrate literatures from business history, strategy, economic geography and innovation studies to illustrate the evolution of the idea of the cluster and speculate on current developments and appropriate policy formulations. It examines the evolution of business clusters. In recent years the evolution of the cluster concept has seen changes in the ways in which knowledge flows – from simple face-to-face flows based on proximity and localized labour markets to facilitated cluster organizations and the use of information and communication technologies (ICTs). Once the cluster is growing, the next stage is a period of sustained development usually described in terms of growth. Clusters often have their own governance structures and leadership – sometimes emergent leadership from within the business community, sometimes a form of imposed leadership from within the regional policy community in the form of a specialized cluster agency.