Abstract: This paper proposes an analytical method for the
dynamics of generating firms- alliance networks along with business
phases. Dynamics in network developments have previously been
discussed in the research areas of organizational strategy rather than in
the areas of regional cluster, where the static properties of the
networks are often discussed. The analytical method introduces the
concept of business phases into innovation processes and uses
relationships called prior experiences; this idea was developed in
organizational strategy to investigate the state of networks from the
viewpoints of tradeoffs between link stabilization and node
exploration. This paper also discusses the results of the analytical
method using five cases of the network developments of firms. The
idea of Embeddedness helps interpret the backgrounds of the
analytical results. The analytical method is useful for policymakers of
regional clusters to establish concrete evaluation targets and a
viewpoint for comparisons of policy programs.