The cluster literature suffers from a number of shortcomings: (1) by and large, cluster studies do not
take into account that firms in a cluster are heterogeneous in terms of capabilities; (2) cluster studies
tend to overemphasize the importance of place and geographical proximity and underestimate the role
of networks which are, by definition, a-spatial entities; (3) most, if not all cluster studies have a static
nature, and do not address questions like the origins and evolution of clusters. Our aim is to overcome
these shortcomings and propose a theoretical framework on the evolution of clusters. Bringing
together bodies of literature on clusters, industrial dynamics, the evolutionary theory of the firm and
network theory, we describe how clusters co-evolve with: (1) the industry they adhere to; (2) the
(dynamic) capabilities of the firms they contain; and (3) the industry-wide knowledge network they are
part of. Based on this framework, we believe the analysis of cluster evolution provides a promising
research agenda in evolutionary economic geography for the years to come