Abstract
The innovation mechanism within service-oriented clusters is different from the traditional industrial cluster in which the focus is primarily on knowledge spillover. Based on the case study of Taipei 101 Retail District, we find that firms innovate via cobranding from dynamic alliance in a common service milieu to satisfy the changing (and/or to create new) customer demands. Servicescape, cobranding and service milieu provide a demand-derived perspective of innovation within clusters. Since service-oriented clusters of firms have increasingly become prevalence in recent decades, our findings offer a compatible framework to interpret the industrial reality, as well as providing new insights for firms located in service clusters to gain and sustain competitive advantages.
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