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cent conceptual discussion on clusters has focused on the process of knowledge generation and dissemination (Bathelt et al. 2020). Malmberg and Maskell (2020: 442) argue that at the horizontal and vertical dimensions of cluster relationships, distinct mechanisms work to enhance learning dynamics. Thus, strong interfirm rivalry at the horizontal level alongside more trustbased relations at the vertical level can work together to promote learning. This may be further facilitated through an institutional dimension of a cluster. It is widely acknowledged that a strength of clusters reside in the rapid use, replication and circulation of knowledge within the cluster’s boundaries (Nadvi 1999a). Technological similarities of firms and social coherence of personal actors can promote such patterns of learning (Bathelt et al. 2020). However, the circulation, absorption and modification of already existing knowledge within the cluster rarely alter the stock of knowledge in more than an incremental way (Humphrey and Schmitz 2020). In fact, a concentration on internal mechanisms and a ‘regional gaze’ that fails to look beyond the boundaries of the cluster are elements of recent critiques of previous work on industrial clustering (Lagendijk 2020). Radical upgrading, be it technological, processual or functional in nature, often requires a bination of external and internal knowledge (Bell and Albu 1999, Bathelt et al. 2020). It is argued, that even worldclass clusters need external ideas and inspiration to retain their dynamism, and cannot rely on their own expertise to bring about sustained technological developments. Thus, the longterm success of a cluster is tied to the ability of clustered firms to build channels to external partners providing plementary and new knowledge. This emphasis on external and internal linkages in understandi ng cluster dynamics requires a conceptual framework to analyze local and global ties. The value chain approach provides a useful model (Gereffi 1994). It shows how the distinct functions involved in turning a raw material into a final product can be mapped onto the plex interrelations that exist between local suppliers and their global buyers. The approach emphasizes the role of governance, or conscious coordination, of distinct activities within the chain. This highlights the significance of power in the chain (Gereffi et al. 2020, Bathelt and Taylor 2020). The influence of actors in the chain can vary, affecting their ability to determine the parameters of production –including what is produced, how, when, and at what price (Humphrey and Schmitz 2020). Coordinating interfirm relationships can involve work arrangements between relatively equal partners who share plementary skills and abilities。 or hierarchical vertical integration (Humphrey and Schmitz 2020). These distinct forms of chain governance explain how a chain is structured, and where and how value is added and appropriated. Chain governance also impact on the scope for local actors to promote upgrading and growth. These studies highlight the significance of external links to cluster dynamics. They point to the differing ways in which global chain ties can effect local cluster upgrading. However, they do not address the role of intercluster ties, nor how production and knowledge flows between clusters influence cluster dynamics. The global surgical instruments industry and local clusters Historically, handheld steel surgical instruments were manufactured in regions known for traditional artisanal metalworking. The distinct production tasks promoted a division of labor whereby small firms flourished and local clusters emerged. Thus, in the early twentieth century, clusters of surgical instrument