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Through the1990s, the clustered locational basis of the majority of
innovation systems received explicit attention producing the dominant
view that innovation is closely associated with places in which
relevant economic resources are most easily accessed by firms that are
in close proximity to each other. The contemporary focus on clusters
as objects of analysis owes much to Porter (1990) who emphasizes four
local factors interrelated within a "diamond" of related and
supporting industries, factor input conditions (including scientific
and technological infrastructure), firm strategy and rivalry, and
demand conditions. Porter is concerned with the dynamics of clusters
thus his thinking is tied directly to ideas on regional innovation
systems. His ideas have garnered substantial attention in policy
circles3, and this is probably because the locational components of
his diamond such as the presence of capable, locally based suppliers,
and vigorous competition among local rivals are expressed in normative
language. In many clusters, however, some of these local diamond
conditions are weak suggesting a mismatch between observed
relationships and the way Porter’s expectations are constructed. The
need for “sophisticated and demanding local customers”, for example,
is met much easier when a national or large regional definition is
used for the cluster rather than the local scale. In this and other
ways, Porter’s model strongly reflects a large economy perspective and
may not be a good fit to metropolitan scale research in a small open
economy such as that of Canada, which is dependent on its
international trade. The term cluster, as used here, is a recognizable
industrial strength of a particular urban region (whether one industry
or a group of related activities). It is a form of industrial
organization that relies on networks of highly specialized, inter-
related private sector firms and public sector institutions whose
final production reaches markets outside the metropolitan region
(Egan, 2000).

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