Studies in Regional Economic Development
Edited by Charlie Karlsson, Börje Johansson and Roger R. Stough
Chapter 4: Knowledge sharing and network emergence in small firm clusters: an agent-based model of industrial districts
The notion of the industrial district (ID) was introduced by Alfred Marshall in 1919. In the concept of external economies, he identified the crucial factor of competitiveness for local systems of specialized small and medium enterprises. Becattini (1979) identified the ID as an elementary and autonomous unit of analysis. In the extensive relevant literature from the 1970s and 1980s (Aydalot, 1986; Becattini, 1989; Brusco, 1982; Camagni, 1989; Rullani, 1993), IDs are characterized by two central properties: 1. ID structure is based on a dense and strong network of relationships among autonomous and heterogeneous actors (that is, firms, families and local institutions). 2. ID competitiveness is the result of the co-evolution of the district's productive organization and of local formal and informal institutions. Piore and Sabel (1984) emphasized the ID model as an example of a production model characterized by flexible specialization and the ability to compete with large integrated enterprises. This approach focuses on transactions related to the productive interdependence of a district's firms rather than on an ID's informal coordination mechanisms, such as values and culture.
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