What Makes Clusters Decline? A Study on Disruption and Evolution of a High-Tech Cluster in Denmark

Abstract

Østergaard C. R. and Park E. What makes clusters decline? A study on disruption and evolution of a high-tech cluster in Denmark, Regional Studies. Most studies on regional clusters focus on identifying factors and processes that make clusters grow. However, sometimes technologies and market conditions suddenly shift, and clusters decline. This paper analyses the process of decline of the wireless communication cluster in Denmark. The longitudinal study on the high-tech cluster reveals that technological lock-in and exit of key firms have contributed to decline. Entrepreneurship has a positive effect on the cluster's adaptive capabilities, while multinational companies have contradicting effects by bringing in new resources to the cluster but being quick to withdraw in times of crisis.