Mysteries of the region: knowledge dynamics in Silicon

For more than a century, commentators have predicted that industrial "clusters" would disappear with improvements in communications technology. Yet still clusters form, most noticeably in Silicon Valley, at the heart of the latest revolution in information technology, the Internet. How can such clusters be explained? We argue that collaborative practices and their contribution to the dynamics of knowledge are more important than communications technologies in explaining clusters. We advance a unitary, practice-based, account of both internal and the external flows of organizational knowledge. We then use this account to explain the importance of proximity to the movement of knowledge and hence the advantages of clustering, despite the disadvantages that come from losing knowledge to competitors. We sketch a matrix view of clusters and suggest that the details of the matrix explain why networks of knowledge have variable density and topography. In conclusion, we replace this simple matrix view with a richer ecological view of knowledge in regions. This helps explain both why regions are so strong and why they are so difficult to imitate. The mysteries of the trade become no mysteries; but are as it were in the air