The Role of Identity and Embeddedness in the Emergence of a Knowledge Cluster in Lithuania

This paper studies the emergence of a knowledge intensive cluster in Vilnius, Lithuania. It presents the first empirical findings of a longitudinal case study on how a group of Lithuanian universities and companies, in a close cooperation with the Vilnius City council, progressed in their attempt to build the first knowledge cluster Lithuania. For a theoretical framework, we draw on a social practice perspective and the concept of embeddedness borrowed from economic sociology. The social practice perspective suggests that for a new reality, such as knowledge cluster, to emerge the key actors and institutions involved in the creation of this project need to acquire new identities, develop new collective (collaborative) practices within and between organizations and adopt new principles for resource allocation. The embeddedness argument reveals the relational nature of the identity concept and helps to show how individual and institutional identities are manifested through different forms of embeddedness. Thus, in a complimentary manner, the embeddedness view suggests that cluster creation requires that the key research institutions and economic actors simultaneously engage in two parallel processes: dis-embeddedness from the old social structure and gradually embedding themselves into a new social structure. Our preliminary findings suggest that narrowly defined organizational identities, a lack of embedded collaborative histories, lack of cluster legitimacy in a wider society, limited resources available to the key actors as well as the absence of a powerful catalyst are the main barriers in building the knowledge cluster. Because collaborative capabilities and shared identities are not readily available, and because they can only be created through learning by doing, we predict that cluster creation will be difficult and slow process. However, this process can be enhanced and significantly speeded—up, if the cluster project receives significant financial and advisory support from the institutional sponsors, gains wider acceptance / legitimacy in a society and if it is able to attract a sufficient number of dedicated and altruistic Don Quixote-like institutional entrepreneurs, who have a different logic of action than what a mainstream economic theory has prescribed.