ABSTRACT
Regional studies have increasingly highlighted the importance of clustering among firms and supporting institutions in sustaining innovativeness within a regional economy. In developed countries, the interest in clustering was fuelled particularly by the experience of the Third Italy since the late 1970s (Piore & Sabel 1984; Scott 1988). The resurgent Marshallian concept of industrial districts was used to capture the success of agglomerations of small firms in the Third Italy (Becattini 1989, 1990). The 'harmonious' picture in district theory has been a spatial economy made up of industrial districts, which is able to meet the new challenges in international trade with its flexible production structure (Lagendijk 1997). The following attributes of industrial districts are summarized from a useful international debate on the Italian experience: geographical proximity, sectoral specialization, predominance of small and medium sized firms, close inter-firm collaboration, inter-firm competition based on innovation, a socio-cultural identity which facilitates trust, active self-help organizations, and supportive regional and municipal government (Humphry 1995).
