Paper to be presented at the Workshop on Agglomeration and Growth in Knowledge-based Societies, April 2007, Kiel, Germany

Non-market interactions are increasingly regarded as key explanations for spatial concentration. Consistently, both innovation and local knowledge spillovers play a central role in recent theories of agglomeration. According to these theories, exchange of localised knowledge gives firms an innovative advantage which results in better economic performance. However, it has turned out to be difficult to open the black box of economies of scale using empirical tests. Since interactions get considerable attention in recent agglomeration theory, social network methods and theory are promising approaches to research spatial agglomerations. Even more so because simultaneously, there is an increasing emphasis on interfirm ties in the network field. The goal of our research is to explore how interfirm networks influence the development of agglomerations. Firstly we provide a review on network and innovation literature in the field of spatial clusters. Secondly, we discuss measurement issues related to networks and innovation and ways to overcome them. Finally, we present preliminary results of our network study among high tech firms in the Dutch region of Twente.