ABSTRACT
In recent years industrial districts have generated a great deal of interest among development economists [Schmitz, 1989]. Traditionally, in less developed countries, small firms were seen as socially desirable, but their viability remained in doubt. Their role was to create jobs, to be a seed-bed for indigenous entrepreneurship, to make use predominantly of local resources, to create local markets for satisfying the basic needs of the poor, and to contribute to a more equitable distribution of income. Rarely, however, were small firms seen as able to become internationally competitive. The success of industrial districts in the West was thus taken as a sign that small firms could be economically viable and strongly contribute to the industrial growth of their country. The concept of the industrial district was then introduced in the study of industrial development in the Third World, both at the empirical and theoretical level [Rasmussen et al., 1992].
