The risk of cascading breakdown in industrial cluster innovation networks: A complex networks perspective

Abstract

It is of significantly concern that an industrial cluster would be broken down due to the bankruptcy of a very few enterprises through the cascading failure process. Based on the complex network theory, the evolution mechanism of cluster innovation networks is analyzed, and a model of cascading failure in the cluster innovation networks is developed. This study shows that: (1) there is a close relation between the evolution mechanism of cluster innovation networks and the risk-resistant capability of the networks, and the process of evolving based on the principle of “preferential attachment” brings about the scale-free character of the cluster innovation networks; (2) the uniform distribution of enterprises strength contributes to improve the invulnerability of the innovation networks; (3)there is a threshold of inter-firm connection density that intensive inter-firm relationship contributes to the risk-resistant ability of innovation networks up to a threshold and beyond which more intensive inter-firm relationship can lead to a decrease in risk-resistant ability of innovation networks. Finally, it is found that the key factors causing the cascading breakdown of cluster innovation networks can be summarized into three areas: the distribution of inter-firm connections, the distribution of firms' risk-resistant capabilities, and the innovation capabilities of the enterprises within the cluster. Some recommendations regarding to improving the robustness of cluster innovation networks are proposed in order to avoid the occurrence of cascading breakdown in industrial cluster.