Edited by Giacomo Becattini, Marco Bellandi and Lisa De Propis
Chapter 50: External Economies, Specific Public Goods and Policies
Marco Bellandi 1. Introduction Industrial districts (IDs) are localities characterised by the economic and social prominence of a cluster of small to medium-sized enterprises (SMEs) embedded within the social relations of the area (Becattini 2004a). Steady paths of development in IDs, as those associated to the model of the so-called Marshallian industrial district (MID), are characterised by a virtuous link between the SME cluster and the locality. In these cases the social core of the cluster is a set of independent producers sharing: (a) a bent towards trust in reciprocal exchanges; (b) a diffuse attitude towards value producing (against rent-seeking) entrepreneurship, proactivity of workers on the job and joint action on shared interests; and (c) cognitive proximity, that is similarity of some basic know-how among the producers. Producers are ‘embedded’ locally in the sense that, living and working in the district, they develop qualities that allow access to, and give contribution to such common subjective tracts (a ‘cooperative nexus’). They better understand when one of them can be trusted; they look for the acknowledgement of their economic success and innovation within the group; and the sharing of familial, civic and school experiences makes it easier to understand and compare the ‘mysteries’ of the industry, as noted by Marshall. This systemic foundation of the district helps economic agents to realise productivity gains specifically in the form of ‘district external economies’, and pulls them to reinvest largely in locally-centred productive plans. This accumulation is consistent with an enlarged reproduction of an ID’s...
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