Interactive learning is the touchstone of innovation while the strength of actors constitutes the capacity of each node of the system; however, very few studies exist on a quantitative measure of these interactions. This paper provides evidence on the microeconomic processes of interactive learning showing the key roles of human capital in current productivity of firms, their broad collaboration mechanisms and actions of state agencies in firm performance. Horizontal relationship between suppliers, traders and subcontractors is regularly formed in clusters. Education of owners, skill of workers and past productivity records are the key determinants of firm-level productivity.
Keywords: productivity, determinants, clusters, incremental innovation, firm collaboration, learning, policy