Exploring the factors of cluster linkages that influence innovation performance of firms in a cluster

Abstract

Clusters being considered as the proponents of innovation, there is a reasonable consensus among researchers and policy-makers that they are the sources of innovation. Therefore, of late, both researchers and policy-makers have increasingly focused on demystifying the factors driving innovation among the firms in a cluster, especially in a high-tech cluster. At the surface level, researchers have identified that the dynamism through interactions of a firm with other firms and associated institutions is one of the key drivers of innovation in a firm residing in a cluster. However, the factors that constitute degree of cluster interactions of firms that determine their innovation levels have not been explored adequately. Bengaluru being one of the highly ranked global hubs of technological innovation in Asia, houses densely interconnected network of high-tech manufacturing firms. It is in the context of Bengaluru cluster that this paper discerned the factors constituting degree of cluster linkages of firms that differentiated the innovation performance among the firms in a cluster. It was found that the ability of a firm to integrate global value chain both vertically and horizontally through extra-cluster linkages determines the innovation performance of a firm in a cluster.