What to Know About Locating in a Cluster

Innovation flourishes when workers are in close proximity to each other, where face-to-face encounters and job changes foster the flow of knowledge and the exchange of ideas.

As Michael Porter of Harvard Business School has noted, many companies choose to locate in industry clusters—regional concentrations involving a particular industry—to gain an advantage in learning or in hiring workers with relevant skills and knowledge, and by being near suppliers and complementary businesses.

One of the most effective ways knowledge.....