Upgrading in Asian clusters: Rethinking the importance of interactive-learning

This paper is concerned with unpacking the role of clusters in supporting the move from competing on low-costs to competing on innovation in the global value chain; special attention is paid to clustered SMEs. By comparing 4 clusters in different industries in Asia, we highlight significant differences in the learning paths of clustered SMEs. The paper contributes to current discussion on upgrading in clusters in developing countries by a) providing an explanation on how localized interactive learning and thus clustering relates to upgrading b) discussing under which conditions upgrading requires interactive learning and c) identifying the linkages between particular types of interactive learning and different upgrading strategies