Knowledge Creation and Diffusion in a Modern Industrial District

One problem with the concept of industrial district and with the description of knowledge creation and diffusion emphasised in the literature based on the evolution of the industrial district is that the theory does not explain with rigour how knowledge and particularly tacit knowledge is transferred or exchange over time in industrial districts. Particularly, the theory does not explain how innovation also happens. This paper aims at explaining the knowledge creation and diffusion in a modern industrial district through the application of Nonaka and Takeuchi’s model. We choose the Nonaka and Takeuchi’s model because of the vast literature on the industrial district that does not explain how knowledge transfer happens or changes over time in industrial districts and how innovation happens, too. This paper purpose is to overcome this gap through the application of the Nonaka and Takeuchi’s model (NTM) to the modern industrial district. We start with the industrial district literature and we describe how knowledge and consequently innovation are created and diffused in a traditional industrial district and in a modern industrial district. But in reality a strong theory about it does not exist and the gap in explanation, particularly about innovation, is strong. This gap is filled by Nonaka and Takeuchi’s model. In this context the NTM is used not only to underpin the knowledge creation and diffusion in an industrial district, but also to explain how innovation happens in a firm and in an industrial district, even if the NTM has various shortcomings when it is used in this way