A stage and eclectic approach to industrial district development: two policy keys for 'survival' clusters in developing countries

This article analyses the history of Italian industrial districts (IDs) to identify lessons to help small and medium-sized enterprise (SME) clusters in developing countries to move to higher stages of development. Transforming the 1990 seminal work of Brusco on distinct models of SME clustering into a stage approach, this article identifies a sequence of different maturity stages which the IDs passed through: initial craft production; industrialization through large firms; the fragmentation of production followed by the growth of smaller specialized units; and, finally, new routes to innovation and competitiveness. These phases help explain how development is a stage process which needs to be carefully considered and not rushed, through attempting to cross too many stages at once. Realistic steps are always necessary to create an effective base for growth. Furthermore, a theoretical framework is presented, which identifies three factorial levels that have intervened in the ID development process over the past 50 years. Economic, policy and social factors are identified and presented as drivers that work together to produce the structural changes that explain an effective development process. The final section emphasizes the relevance that this kind of analysis can have on the policy-making schemes being applied in developing countries, with special reference to less developed types of clusters.