ABSTRACT
The success of some regional clusters such as, the Silicon Valley and Prato region in Italy have triggered attention to the role of knowledge and local environment in stimulating the competitiveness of networks of firms. The ever declining cost of transporting goods and people by air and the improved surface and shipping transportation has led to physical boundaries becoming less important. Industrial districts capture the attention of a substantial body of researchers and policy makers across a wide range of countries and organizations. According to Marshall (1922), the availability of common resources to a number of firms then enhances their size and diversity as both capital and labour are attracted to such areas to exploit the larger markets for their services. Piore and Sabel (1984) argue that industrial districts are also dependent upon the creation and operation of regional institutions that balance the cooperation and competition among firms, to encourage permanent innovation.
