A Mechanism Framework for Cluster Enterprise Innovation: A View of Co-Governance

Since 1990s, there has been a growing concern about the role of industrial cluster in stimulating a regional and in turn a national competitiveness. Especially in the context of emerging technologies and related knowledge-economy business models, linking stakeholders in dynamic clusters is believed to enhance competition and regional innovation (OECD, 1999). Whilst industry cluster contains a huge number of small and medium enterprises (SMEs) varied in the fields of technology, production and marketing, the highlighted issue is to deal with the integrated mechanism of innovation, collective learning, networking and collaboration. By applying a perspective of co-governance, this paper has suggested a functioning framework of innovation mechanism for SMEs, in specific, the four key supporting mechanism - the driving mechanism based on market-oriented governance and internal governance, the learning mechanism based on value chain governance and network governance, the incentive mechanism based on entrepreneur governance, and the constraint mechanism based on government governance - have been analyzed in depth. In addition, the purpose of this paper is to contribute new empirical evidence and theoretical analysis to the given issues through a case study of Xiqiao textile cluster enterprises.