Intangible resources are the source of competitive advantage in theknowledge economy. Knowledge and intellectual capital within firms havegathered worldwide attention; theories and methods for knowledgecreation management have been developed for organizations and alliances.Economic reality shows the importance of industrial districts becausesocial systems in districts provide dynamic contexts of multifacetedrelationships. These dynamic contexts or district ba (Japanesefor place) enable firms to create and harness knowledge that resides innetwork relationships. The paper develops a theoretical frame of four kinds of district ba thatsupport four knowledge processes. Organizational networks within andbetween different district ba are conceptualized. The creationof knowledge within district ba is used to analyze differentlevels of interaction between firms in the same or different districtsand in the same or different industries. The case study of the JETROlocal-to-local program between Ishikawa prefecture in Japan and Como andVarese in Italy is used to illustrate the theoretical concepts. Districtba are used to analyze the knowledge creation dynamics withinand between districts and to identify possible strategies for districtgovernance. Copyright Kluwer Academic Publishers 1999
