This paper addresses the question of 'how and why some places develop expanding industrial complexes while others move along other trajectories', with reference to localized high technology enterprise. It is argued that concern with local resource endowments has led to the neglect of chance events and cumulative processes, key features of path dependence. The emerging industrial ensemble can be conceived as a complex open system, characterized by interdependent activities, sensitive to initial conditions and subject to irreversibilities. In such systems, the relationship between initial conditions and subsequent innovative developments is unpredictable, though common dynamic processes can be detected. The systems approach can address the multidisciplinary features of the innovative milieu, where economic, cultural and political dimensions form an interdependent whole. Copyright Joint Editors and Blackwell Publishers Ltd 1998.
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