Dimensions of proximity in knowledge-based networks: The cases of investment banking and automobile design

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.