Knowledge bases, innovation and multi-scalar relationships: which kind of territorial boundedness of industrial clusters?

Innovation is a highly interdependent process nowadays where firms rely on distributed knowledge sources at various spatial scales. It has been argued that innovation interactions are shifting increasingly from local and regional towards global scales, and that the region as a space for supporting innovation and competitiveness of firms is losing in importance. We suggest, however, that firms and clusters rely on various kinds of knowledge bases and factors for their performance that differ in geographical mobility and territorial boundedness. Whereas codified knowledge, particular goods and services, investment capital, and people have become mobile at a global scale, due to modern transport- and communication technologies and lower trade barriers, we find other factors that are still territorially bound. These are e.g. tacit knowledge that is exchanged in local and social networks, as well as institutions and regulations that are confined to territories. We argue, furthermore, that industries differ in this regard and investigate to what extent driving factors for cluster development and innovation have become non-local or foot-lose, or remain territorially bound in specific types of industries. This has relevance for regional and innovation policies that try to enhance the competitiveness of clusters and regional economies.