Beyond Clusters : Current Practices & Future Strategies

In the mid 1980s, U.S. development agencies were seeking ways to help their struggling industries compete with the modern and remarkably efficient production facilities of western Europe and Japan. That search eventually led them to northern Italy, where scores of technologically advanced but small artisan firms were capturing large shares of European and global markets. I first learned about the now legendary Italian region of Emilia Romagna in 1987, where 40,000 small manufacturers with an average of six employees were able to operate with the efficiency and scale of U.S. multinational corporations. In 1988 I organized a study tour for the Southern Technology Council—science and technology advisors of the governors of the Southern states—to Emilia Romagna, Denmark and Germany’s Baden Wurttemberg. We found that in each place competitiveness was tied to specialization, external economies, and public sector support for both. The specialization was most pronounced in Italy where large numbers of similar and complementary businesses located in close proximity to each other shared resources and cooperated to their mutual advantage. No one had yet applied the word “cluster” to these agglomerations; they were called industrial districts. But under any name, local specialization was the key to their success.