Complexity, networks and knowledge flow

Because knowledge plays an important role in the creation of wealth, economic actors may attempt to skew the flow of knowledge in their favor. Managers of a firm may seek to spread knowledge widely within their organization but prevent its diffusion to rivals. Regional planners may strive for rapid diffusion of knowledge within a local economy but not beyond it. We ask, "when will knowledge developed in one area of dense social connections such as a firm, a geographic locale, or a technological community tend to diffuse to the edge of that area but not further?" Marrying an understanding of social networks with a view of knowledge transfer as a search process, we argue that the degree of knowledge inequality across social boundaries depends crucially on the nature of the knowledge at hand.