ABSTRACT

An industry cluster represents a life cycle (EC 2002; Rosenfeld 2002; Sternberg et al. 2004). Cluster upgrade thus has at least two meanings: one is the natural evolution of the cluster from its embryonic stage to maturity. The other concerns the cluster in decline or decay, i.e. how to overcome the lock-in effect and achieve an evolutionary update to become a new cluster. In the periodic growing process of clusters, they may face the ‘Distanced Neighbor’ Paradox (Bathelt 2005). This requires building local ‘buzz’ and ‘pipelines’, as well as ‘globalizing’ regional development (Bathelt et al. 2004; Coe et al. 2004; Yeung 2005) . Local interaction or buzz and interaction through global or trans-local pipelines produces a dynamic process of knowledge creation which is the key to understanding a cluster's growth process (Bathelt 2005). With regard to the upgrade of clusters in the stage of decline, the process focuses on how to escape negative regional lock-ins (Grabher 1993; Schamp 2005; Hadjimichalis 2006; Martin and Sunley 2006; Wei et al. 2007; Wei 2011).