Cluster-Based Advantages in the Innovation Process: The Diffusion of Nanotechnology in Two Chinese Cities

Researchers have shown that “cluster” is a more useful unit of analysis than “nation” in innovation studies. Clusters are characterized by interconnected organizations, shared resources and frequent knowledge flows. Within national boundaries, multiple clusters with different relative advantages may coexist, and exhibit very different innovation patterns. Yet, in studies of innovation in emerging economies, there remains little attention on cluster-based advantages, and how these advantages generate distinct patterns of innovation. To bridge this gap, this study analyzes the diffusion patterns of nanotechnology in two Chinese clusters—Beijing and Shanghai. With different relative advantages, the diffusion of nanotechnology has been oriented by different levels of “imitation” and “innovation” forces in the two Chinese clusters. This study applies the Bass Model to quantify imitation and innovation forces, and compare the resultant diffusion patterns of nanotechnology in the two clusters with other technologies. Supplementary qualitative data is also provided to show how Chinese scientists perceive their relative advantages in different clusters. Among other things, the findings suggest that scientists of emerging economies favor the learning-by-doing principle while utilizing external networks.