Cluster Decline and Resilience - The Case of the Wireless Communication Cluster in North Jutland, Denmark

Abstract

Most studies on regional clusters focus on identifying factors and processes that make clusters grow. However, sometimes technologies and market conditions suddenly shift, and clusters decline. This paper analyses the process of decline of the wireless communication cluster in Denmark, 1963-2011. Our longitudinal study reveals that technological lock-in and exit of key firms have contributed to impairment of the cluster’s resilience in adapting to disruptions. Entrepreneurship has a positive effect on cluster resilience, while multinational companies have contradicting effects by bringing in new resources to the cluster but being quick to withdraw in times of crisis.

Keywords: regional clusters, cluster decline, resilience, wireless communication industry

JEL Classification: R11, R12, O33, L26