This book looks at two-stage industrial cluster theory and new innovation models in the context of the IT-ization and servitization of products. The formation of industrial clusters, such as export processing zones and special economic zones, has been the preferred mechanism for developing countries to boost their industrial development and export performance for the past several decades. Existing literature related to development economics cites numerous benefi ts of industrial clusters, and several countries have demonstrably reaped such benefits.

The book goes beyond an evaluation of the development of traditional industrial clusters by promoting the idea of the formation of two-stage clusters. Moreover, it takes into consideration new innovation models, with ideas promoted that are based on empirical evidence available through evaluations of Chinese and Taiwanese firms in the consumer electronics and automobile sectors.

Finally, the book looks at company strategies in a new business environment dominated by the servitization of industrial products. It proposes that firms integrate manufacturing and services to a greater extent, and, to substantiate these arguments, presents empirical evidence from India, Taiwan, and Bangladesh. Furthermore, the study contends that innovation and knowledge acquisition strategies are infl uenced not only by the size of fi rms but that they also vary with market preferences.