Abstract
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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