Knowledge-based development and industry clustering: Spatial embeddedness of Sydney and Melbourne's software industry

This paper addresses the question of the degree to which the Sydney and Melbourne software industry clusters are spatially embedded and the role of knowledge production and exchange in this. The paper uses data from interviews with a stratified random sample of 50 software firms in the two cities. Embeddedness is examined via location reasons, sources of knowledge, the location of the main skilled labour pool, the main sales location, the importance of face-to-face communication from different sources, collaboration with other firms, the location of competitor firms, and attitude to the presence of similar firms nearby. The results suggest that opportunities for the exchange of tacit knowledge through customers, inter-firm collaboration and new and ex-employees are fundamental to the industry’s embeddedness at the metropolitan scale and at the local/suburb scale. Copyright © 2010 Inderscience Enterprises Ltd.