Knowledge and Knowledge Barriers

Abstract

This paper investigates spacial clustering of entrepreneurship and considers work advanced by David Andersson in the field. It assesses the influence that knowledge, in the form of insight, has on creating local economic opportunities, and relates how knowledge is used to advance the theory of spacial clustering to other economic models. A survey of how knowledge is used in some of our economic theories is performed to see if its use in the spacial clustering proposition is consistent. In reviewing how knowledge influenced the spacial nature of entrepreneurship, it was determined that alertness of local economic opportunities plays an essential role in determining successful economic endeavors and supports a core management construct that accurate information is fundamental for effective decision making.

The review of how knowledge is used within many of our current economic theories is enlightening. Entrepreneurial knowledge with local time and space information incorporated was found more persuasive as a basis for investments than centralized technical knowledge. Alertness of profit opportunities was found to be the type of knowledge that will consistently reduce investment risks. Knowledge, in its many forms, is not necessarily reducible to entrepreneurial alertness, but rather, is merely a factor that helps explain when discoverable profit opportunities are available to entrepreneurs. Entrepreneurs must still have perfect foresight and overcome knowledge barriers. This paper concludes that spacial clustering of entrepreneurial innovation, despite the introduction of new networking technologies that facilitate near-universal distribution of information, is an appropriate economic model that takes into account the face-to-face nature necessary for maintaining entrepreneurial alertness.