Section Three ECONOMIC AGGLOMERATION AND INDUSTRIAL CLUSTERING IN DEVELOPING COUNTRIES: THE CASE OF THE MEXICAN SILICON VALLEY

162 163 INTRODUCTION Economic agglomeration is a ubiquitous phenomenon that has been studied for more than a century by geographers and a rather narrow slice of economists that have been intrigued by the way production and commercial activities tend to concentrate in certain points of national territories over time. In recent times, in the last decade or so, some noted members of the mainstream economics profession have discovered the geographic dimension of economic processes and have thus focused their attention on the where and why of these processes, and specifically on the concentration of businesses and industrial plants in given regions and locales. It was a member of the scholarly business profession, however, who produced a theory that has become the conventional wisdom for the study of industrial clustering the world over, namely Michael Porter. Economic agglomeration in general, and industrial clustering in particular, tend to adopt different modalities according to the specific characteristics of the country or locale in question. Some basic, common elements remain, though, across locations and cases, which reveal recurrent patterns and permit the analyst to discern lessons and principles that can be useful for both advancing knowledge on and formulating policy guidelines to orientate new or ongoing processes of cluster formation in other latitudes. The aim of this report is to examine those phenomena by discussing some of the most influential theoretical accounts that have been developed to explain them with an eye to evaluate their relevance for developing countries. To this end, the case of Guadalajara, Mexico is analysed in detail, where a major electronics industrial cluster emerged and has developed in the last decades, which has led this city to be dubbed the Mexican Silicon Valley in national and international circles. This Latin American case is contrasted with others in East Asian developing countries as reported by Kuchiki and Tsuji (2004) and summarised in the prototype policy framework developed by Kuchiki (2004). 164 This report departs from the premise that Porter's widely accepted, but seldom critically evaluated, theory should be systematically assessed in order to learn about its limitations and intellectual inheritances from earlier theories of economic agglomeration and in this way to discern its actual explanatory and predictive capabilities and its true potential for strategy and policy formulation. The idea is to see through the halo of infallibility often assigned to it and thus to properly dispel the quasi magical powers usually …