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The Handbook of Service Industries

Edited by John R. Bryson and Peter W. Daniels

Service activities are now acknowledged as key players in economic development, societal change and public policy worldwide. This exciting Handbook not only contributes to ongoing conceptual debates about the nature of service-led economies and societies; it also pushes back the frontiers of current critical thinking about the role of service activities in urban and regional development and the important research agendas that remain to be addressed.
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Chapter 17: Understanding the Relationship between Information Communications Technology and the Behaviour of Firms Located in Regional Clusters

Grete Rusten and John R. Bryson


17 Understanding the relationship between information and communication technology and the behaviour of firms located in regional clusters Grete Rusten and John R. Bryson Introduction The growth of information and communication technologies (ICTs) and their application in the economy has played an important role in the ways in which firms are organised and orientated in the marketplace. Boundaries between organisations are becoming increasingly blurred as new forms of organising production develop, facilitated and enabled by ICT. Organisations ‘are becoming increasingly integrated into dynamic networks connected by time–space compressing information and communication technologies’ (Grimshaw et al., 2005: 1). ICT enables firms to be part of distributed networks of relationships with other firms and resource providers. In an increasingly competitive business environment, organisational survival is partially dependent on the quality and strength of a firm’s connections or relationships with other firms and institutions. Cairncross (1997) argues that the digital revolution is associated with the death of distance as new technologies increase accessibility. Nevertheless, many economic activities remain geographically concentrated and some co-located firms are part of a fully functioning localised cluster. According to Porter (2000) a cluster is defined as a relatively concentrated agglomeration of firms and organisations that are integrated through business transactions, collaboration, rivalry and knowledge transfer. Firms located in a cluster benefit from being geographically and socially close to one another as well as being able to exploit locally developed cluster-supporting infrastructure (local institutions, for example training establishments, local supply networks, access to raw materials) and...

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