The Cognitive Limits to Economic Cluster Formation

There has been increasing interest in the social dimensions of economic clusters. The literature now includes select examples of social network analysis plus an extensive discussion of learning regions. Unfortunately, much of this work treats the network as the primary unit of analysis. It may be that network attributes such as density, centrality, and power are primarily dependent on human limitations and not instituted factors. In other words, a human’s limited ability to process information may be a better determinant of cluster success than economic or network theory. The purpose of this paper is to highlight human limits in cluster formation. To do this, we draw on recent developments in the cognitive psychology and communications literatures. We explain that many of the factors that lead to underperforming cluster policies are the result of a human’s inability to develop and sustain a large number of social interactions. Any cluster policy must be cognizant of such limitations and carefully address these limits in the formation of the initial strategy.