From “Firms of a Feather Flock Together,” an article on new research from Washington University in St. Louis:
“High-tech firms locating close to each other benefit from the proximity,” says Barak S. Aharonson, visiting assistant professor of organization and strategy at the Olin Business School at Washington University in St. Louis. “The potential for frequent face-to-face interaction, serendipitous encounters and easy scrutiny are facilitated by being near firms that are working on similar things and are open to sharing information.”
These “knowledge spillovers” happen more frequently the closer firms are to each other, and dissipate as the distance between companies grows. In fact, Aharonson said, the benefits of agglomeration are strongest within 500 meters (about 0.31 miles) and fade quickly over distances.
This should be of interest to any area pursuing high-tech, cluster-based economic development strategies.