Since 1956 IBM established subsidiary company in Taiwan, software firms had highly clustered in the metropolis area, especially in Taipei. This article analyzes why Taiwan software firms cluster in Taipei and the following aspects are considered to explain the phenomenon: 1. The construction, maintenance and the relation of industrial network. 2. How dose the formation and flow of the technological community influence the industrial innovation and technology diffusion? 3. How dose communication infrastructure, start-up fund system, industrial management system influence the learning and innovation capability of firms? In knowledge economy age, the transformation and diffusion of knowledge is extremely fast. The learning capability is essential to be competitive. The accumulation of knowledge often becomes the unique advantage of the region and also enhances the learning capability. This kind of learning that integrates different kinds of knowledge into new knowledge is the origin of many important innovations. The relation that constructs by industrial network and interpersonal network let learning carry on. Learning not only let codified knowledge easy to imitate, but also let tacit knowledge easy to learn by close interaction. The network between firm and firm, labor and labor provides the channel that tacit knowledge flow. Actors share and learn knowledge and technology by close interaction, and integrate different kinds knowledge into new knowledge. This makes innovation possible. Such learning by close interaction depends on firm clustering. In other words, social network help the collective learning of Taiwan software firms effectively. In the process, relational asset including special custom, trust, and value, make Taipei metropolitan more than a spatial vessel but a learning region that enable ideas flowing and collective learning happening.