The competitiveness of firms and regions is increasingly dependent on their capabilities to organise knowledge processes that unfold between different knowledge providers. In this article it is argued that this knowledge management in networks is a cognitive process that uses different dimensions of proximity. As much of the knowledge required is 'tacit' in character, 'embedded' social interaction becomes crucial. There are, however, conflicts of interest in business networks. The organisation of knowledge processes thus becomes a complex governance task that depends to a large extent on the characteristics of the learning processes of the sectors involved. This paper offers some empirical evidence from the service sector with the case of M&A activities and from the manufacturing sector with the case of automobile design

Among the variety of old industrial areas, districts involved in the production of light consumer goods are a special case. Taking the single still-surviving footwear-production district in Germany as an example, the author makes an attempt to reflect on the long-term decline of an industrial district and the resulting path dependency of regional development. An evolutionary approach is taken which starts from different institutional bases and reveals a complex mix of temporalities and spatialities in the development path of enterprises and the region. The major empirical findings contrast two dominant types of strategic response to decline: firms either stayed in the industry, but left the region; or stayed in the region, but left the industry. The author concludes by mapping implications for territorial development.

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