ABSTRACT

Industrial clusters 1 have exhibited a high-growth phenomenon, both in developed and developing countries. A case in point is that of the industrial districts of ‘Third Italy’ 2 (Humphrey and Schmitz 1995: 3). Here, small and medium enterprises (SMEs) producing ‘mostly traditional products’ 3 excelled during the international recessionary trend of the 1970s and the 1980s, when large integrated firms producing comparable products were finding it difficult to live up to the ‘fast changing and increasingly customized consumer pattern’ (Das 1996: 1). Performing SMEs producing mostly traditional products and situated in geographical concentrations were noticed in developing countries too, although to a lesser degree. It has been emphasized that the issue of ‘cluster’ is very contextual even in the current era of globalization, competition, and, above all, information technology due to various critical locational advantages (Enright 1998: 4–8).