Cluster Relations in the Media Industry: Exploring the ‘Distanced Neighbor’ Paradox in Leipzig

Abstract

This paper uses a multidimensional cluster concept which views processes of knowledge creation as being decisive in explaining how clusters are established, why they grow and how they reproduce themselves. It is suggested that clusters can only create new knowledge and continue to grow if the cluster firm shave linkages with external markets and employ a mix of local and non-local transactions. The point made is that local interaction or ‘buzz’ and interaction through global or trans-local ‘pipelines’ create a dynamic process of knowledge creation which is key to understand a cluster’s growth process. It is argued that the lack of a reflexive mechanism of local and trans-local interaction is the reason as to why the Leipzig media industry cluster has stagnated in recent years after a decade of substantial growth. In this cluster, we are confronted with what I refer to as the ‘distanced neighbor’ paradox. Firms in the Leipzig media sector are neither characterized by strong pipelines to firms and markets outside the cluster, nor do they engage in intensive local networking and interactive learning. This paper explores the conceptual foundations of this phenomenon and applies it to the case of Leipzig.