Implications of the Internet for Knowledge Creation and Dissemination in Clusters of Hi-tech Firms

Recent advances in Internet-based telecommunication technologies have enabled firms to compete across their own regional and national borders regardless of physical presence, location and size. While studies on regional economics stress the importance of localized specialization for the creation and dissemination of knowledge, the Internet is introducing a new competitive landscape for the conduct of business through virtual networks. However, there is little research on the influence of the Internet on regional development of clusters particularly concepts and theories for explaining the role of the Internet in the creation and dissemination of knowledge -- as a source of regional competence. This paper draws on cases of Cambridge's high-tech firms in the United Kingdom to examine and develop concepts pertaining to drivers of Internet technology that facilitate the creation and dissemination of knowledge. The data analysis suggests the presence of four Internet drivers: open systems, virtual channels, multi-user engagement and extended customizability. The Internet facilitates communications, extends customization capabilities and presents new virtual channels that further strengthen the close and intensive interactions of spatial localization of firms for production and innovation.

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