This article is concerned with unpacking the role of the cluster supporting the SMEs’ move from competing on low costs to innovating in the global value chain. By comparing four clusters in different industries in Asia, we highlight significant differences in the learning paths of the clustered SMEs. The aricle contributes to current discussion on up-grading in clusters in developing countries by (a) providing an explanation on how localised interactive learning, and thus clustering, relates to upgrading; (b) discussing the conditions under which upgrading requires interactive learning; and (c) identifying the linkages between particular types of interactive learning and different upgrading strategies.
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