Industrial clusters – even those in the same sector – can develop in different ways according to how they are embedded in their regional innovation system. Whilst, on the one hand, the pharmaceutical industry in Germany manifests a strong geographical concentration, on the other, these pharmaceutical clusters show a different regional economic development. The present paper takes the example of the pharmaceutical clusters in southern Hesse and Upper Bavaria to demonstrate this phenomenon. The reasons for the regional differences observed include the specific industrial structures into which the pharmaceutical companies are embedded and differences in the overall knowledge base of the two German states of Hesse and Bavaria.
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