ABSTRACT
Differing types of technological change discontinuities (sustaining versus radical) trigger the formation of component knowledge that creates a system of interconnected capabilities underpinning cluster-level competitive advantage. This study elaborates on cluster dynamic systems of capabilities using
managerial capability-based perspectives, and thus addressing dynamic cluster capabilities with the purpose of building up a framework through which to understand the mechanisms of cluster evolution and competitive advantage. Extensions of the capability-based approach from the firm to the territory or cluster level in the economic geography literature (e.g. Foss, 1996; Lawson, 1999; Lawson and Lorenz, 1999) have argued that territories can develop higher order capabilities (Foss, 1996). However, these works have been limited to using a competence or capability lens to simply conceptually describe clusters (a) without using a formal and dynamic approach drawn from the dynamic capabilities perspective and (b) without connecting the concept of cluster capability to that of cluster evolution. This is the purpose of this chapter.
