Industrial Districts as 'learning regions'. A condition for prosperity

Bjørn Asheim

No 199503, STEP Report series from The STEP Group, Studies in technology, innovation and economic policy

Abstract: The future of industrial districts has been critically discussed during the last years. Some observers have raised questions about the long-run stability of industrial districts, arguing that they will be fragmented either through the take-over of the most successful SMEs by TNCs or the formation of hierarchies of firms inside the districts led by the most dynamic SMEs (Harrison 1994a, 1994b)). Others suggest that some industrial districts will develop a "post-Marshallian" organisation of production, i.e. to become Marshallian nodes within global networks (Amin, Thrift 1992). As this will imply a reduced level of vertical disintegration locally, one could ask how "Marshallian" such nodes would eventually become? (Harrison 1994b). The endogenous innovative capacity of the districts is of strategic importance for their future development. Bellandi sees "the assessment of the endogenous innovation capacities of the industrial districts ... (as) ... a key issue" (Bellandi 1994, 73). More specifically this means the capability of SMEs in industrial districts to break path dependency and change technological trajectory through radical innovations. In this paper factors enabling and constraining such structural change will be discussed. Special focus will be directed towards analysing the role and function of the specific "Marshallian" characteristics of industrial districts in the process of change. In my view the core of the question is related to the learning capacity of SMEs in industrial districts, which will be crucial to their future innovativeness and flexibility (Johnson, Lundvall 1991). Will the traditional "Marshallian" industrial district be able to secure a sufficient learning capacity, or will it rather represent a barrier to a successful transformation of industrial districts into "learning regions"?

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Chapter: Industrial Districts as ‘Learning Regions’: A Condition for Prosperity (2007)
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