There is a widespread belief that knowledge diffuses more evenly and more rapidly among a localized community than among a highly dispersed community (Breschi and Lissoni 2001a; Pinch et al. 2003). As stated by one researcher, knowledge traverses corridors and streets more easily than continents and oceans (Feldman 1994: 4) so that even if knowledge ultimately diffuses, the fi rst sharing of knowledge occurs locally (Feldman 2000). When combined with the perceived importance of knowledge and learning to business growth, a strong policy conclusion can result: economic development agencies should aim to build conditions that will maximize knowledge generation and learning, as these sources of competitive advantage are at low risk of immediate imitation. The ideas of the British economist Alfred Marshall are frequently cited in support of the possibility that an industry’s secrets can be shared locally without risk of dispersing further afi eld. Among other judgements, Marshall observed that:
When an industry has once chosen a locality for itself, it is likely to stay there long: so great are the advantages which people following the same skilled trade get from near neighbourhood to one another … if one man starts a new idea it is taken up by others and combined with suggestions of their own; and thus becomes the source of yet more new ideas.