Knowledge and social networks: New dimensions of economic interaction between firms

The paper explores the form and content of economic interaction of firms based on various concepts of agglomeration and social networks. It uses a case study of the machinery sector in the region of Styria as empirical background. Starting with types of clustering – the model of pure agglomeration, the industrial-complex model and the social-network model - the paper argues that certain geographical agglomerations allow different types of networks and different patterns of behaviour. Thus different forms of learning, knowledge sharing and knowledge creation. Some “stylized facts” in support of this perspective are derived from an analysis of a regional network. This network comprises individualistic open systems consisting of several areas which overlap. Physical linkages between these networks are weak, but intersections based on cooperative R&D and R&D infrastructure, qualification and informal exchanges are evident. From a regional perspective it can be seen to dominate. Despite evident sectoral concentrations direct links to the prevailing science base appear more significant as binding factors than long term supplier networks. These relationships are interpreted in terms of their need for proximity, their durability and above all their direction of knowledge dependency.