Organisations, Innovation and Complexity: New Perspectives on the Knowledge Economy

University of Manchester
9-10th September 2004

Conference Aims | Paper Abstracts | Programme | Further Information

Cluster, Value Network and Business Ecosystem: Knowledge and Innovation Approach

Mirva Peltoniemi

mirva.peltoniemi@tut.fi

Institute of Business Information Management,
Tampere University of Technology, Finland

Abstract

The way we perceive the business world around us is affected by various models originating from consulting, developing in academic publications and finally finding their ways into wider acceptance. In this paper two well established models, cluster and value network, and an emerging model of business ecosystem are assessed. Especially, knowledge creation, knowledge transfer and innovation aspects in each model are discussed.

Cluster is a term introduced by Porter (1990). Clustering is a phenomenon linked to geographic concentrations of national industries which origin from vertical or horizontal relationships between companies. According to Porter (1990) the power of clusters lies in fierce competition within them, which obliges the companies to elevate their standards of performance. Value networks, on the other hand, are concentrated in creating value in each node. The strength of a value network originates from cooperation and interaction among participating companies. Business ecosystems (Moore 1996) base their success on both competition and cooperation. It is argued in this paper that self-organization and co-evolution are significant phenomena in the development of business ecosystems. These ideas are drawn from the emerging paradigm of complexity (see e.g. Mitleton-Kelly 2003) as well as from the well established school of evolutionary economics (see e.g. Nelson & Winter 1982).

Regionality or locality is often defined as a major characteristic of a cluster (see e.g. Arbonies & Moso 2002, Scheel 2002, Tallman et al. 2004). Cluster features also include the concept of an industry. A cluster is a part of a specified industry (see e.g. Dayasindhu 2001, Tallman et al. 2004). Value network is not seen as bound to certain region - it can even be global. The concept of industry is included in the discussion of value networks, but companies inside a value network can be parts of different industries. Business ecosystem rejects both regionality and the concept of industry. Moore (1996) claims that modern communication technology and global competition reduces the importance of geography. Moore (1996) also wishes to abandon the concept of an industry, since the fast-paced development of technology makes it difficult and fruitless to define such industries.

References

Arbonies, A.L. & Moso, M. 2002. Basque Country: the knowledge cluster. Journal of Knowledge Management. Vol. 6(4), pp. 347-355.

Dayasindhu, N. 2002. Embeddedness, knowledge transfer, industry clusters and global competitivness: a case study of the Indian software industry. Technovation. Vol. 22, pp. 551-560.

Mitleton-Kelly, E. (eds.) 2003. Complex Systems and Evolutionary Perspectives on Organizations: The Application of Complexity Theory to Organizations. Pergamon. 272p.

Moore, J.F. 1996. The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems. HarperBusiness. 297p.

Nelson, R.R. & Winter, S.G. 1982. An Evolutionary Theory of Economic Change. The Belknap Press of Harvard University Press. 437p.

Porter, M.E. 1990. Competitive Advantage of Nations. London, Macmillan. 855p.

Scheel, C. 2002. Knowledge clusters of technological innovation systems. Journal of Knowledge Management. Vol. 6(4), pp. 356-367.

Tallman, S., Jenkins, M., Henry, N. & Pinch, S. 2004. Knowledge, clusters, and competitive advantage. Academy of Management Review. Vol. 29(2), pp. 258-271.

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