Cluster Life Cycles - Dimensions and Rationales of Cluster Development
46 Pages Posted: 2 Nov 2007
Date Written: October 30, 2007
We present a model that explains how a cluster moves through a life cycle and why this movement differs from the industry life cycle. The model is based on three key processes: the changing heterogeneity in the cluster describes the movement of the cluster through the life cycle; the geographical absorptive capacity enables clustered companies to take advantage of a larger diversity of knowledge and the stronger convergence of clustered companies compared to non-clustered companies results in a reduction of heterogeneity. We apply these processes to four stages of the cluster life cycle: emergence, growth, sustainment and decline.
Keywords: cluster evolution, life cycle, heterogeneity
JEL Classification: R11, O30, L25
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