Industrial Clusters, Focal Firms, and Economic Dynamism: A Perspective from Italy

This paper discusses the role of clusters and focal firms in the economic performance of small firms in Italy. Using the example of the packaging industry of northern Italy, it shows how clusters of small firms have emerged around a few focal or leading companies. These companies have helped the clusters grow and diversify through technological and managerial spillover effects, through the provision of purchase orders, and sometimes through financial links. The role of common local training institutes, whose graduates often start up small firms within the local cluster, is also discussed.