Knowledge management strategies and spatial structure of geographic industrial clusters: a simulation approach

Abstract

Mainstream economic literature has often neglected spatial issues. Marshall having initiated the study of agglomeration economies, these were then only further pursued in specialized lines of research in economics and economic geography. General interest in them was revived by the “new economic geography” when it applied new economic tools and concepts to their study. However, in order to understand the dynamics of the information economy, we need to introduce the underlying mechanisms of knowledge spillovers into economic models of agglomeration. We propose to do it through the construction of agent-based simulations that implement a theoretical framework designed to understand knowledge flows: the I-Space. Along these lines, we present a simulation model of geographical industrial clusters in which we can study the interrelation between knowledge management strategies and the spatial agglomeration patterns of populations of firms. The application of the model to two well-known high-tech industrial clusters, Silicon Valley and Boston Route 128, offers us insights into the different cultural dynamics of the two clusters. These focus on knowledge transfer and on role played by information and communication technologies (ICTs) at different levels of development.