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Hot Spots and Blind Spots: Geographical Clusters of Firms and Innovation

Richard Pouder and Caron H. St. John
The Academy of Management Review
Vol. 21, No. 4 (Oct., 1996), pp. 1192-1225
Published by: Academy of Management
Stable URL: http://www.jstor.org/stable/259168
Page Count: 34
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Hot Spots and Blind Spots: Geographical Clusters of Firms and Innovation
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Abstract

Hot spots are fast-growing geographic clusters of competing firms. Drawing on several literature streams, we develop an evolutionary model that contrasts hot spot and non-hot spot competitors within the same industry. Initially, economies of agglomeration, institutional forces, and managers' mental models create an innovative environment within the hot spot. Over time, those same forces create a homogeneous macroculture that suppresses innovation, making hot spot competitors more susceptible than non-hot spot competitors to environmental jolts.

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