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The purpose of this research is to aim to understand how the dynamic of knowledge creation takes place within a small‐firm network (SFN).

The research, qualitative in nature, was developed through the case study of the Clothing Industries Association, called AGIVEST, formed by 35 small clothing industries located in southern Brazil. This article attempts to offer a more comprehensive approach towards the creation of organizational knowledge, by shifting from an endogenous process of the individual firm to a multidirectional exogenous process within networks.

The research presents evidence that the context of a cooperation network may provide an environment of collective learning, represented above all by the interaction dynamic that occurs between the firms through the creation of several types of ba (specific context in terms of time, space and relationship), which support the process of knowledge creation.

This approach should consider the tacit, complex, interdependent and contextual nature of knowledge, overcoming the eminently IT‐oriented view defended by the Western perspective of knowledge management. It is intended that the evidence presented encourages debate and a critical attitude concerning the concepts of knowledge creation, cooperation and SFN in the academic community.