Radical Innovation and Technology Diffusion in Traditional Clusters

Academic literature has emphasized how firms in regional clusters exploit both place-specific local resources as well as external, world-class knowledge respectively to strengthen their competitiveness expanding the influence of regional systems of innovation. Innovation based in more complex technologies tends to be based in more open systems utilising the clusters external networks. However, in general, cluster literature has associated clusters with incremental innovation. This chapter analyses the determinants of radical innovation development in traditional (low and medium tech) clusters caused by high-tech located industries. It analyses the case of the development of breakthrough innovation and its diffusion in the tile ceramic Spanish cluster. It examines how market demands, customer orientation, technology diffusion from other industries, and industry competitiveness, as well as cluster internal and external networking facilitate the development of a complex technology within a common set of social capital, shared cognitive schemes, and understandings.