Collective efficiency, policy inducement and social embeddedness: Drivers for the development of industrial districts

Abstract

Where is the future of traditional industrial districts in global markets where competition is fiercer every day? This paper presents the case of the furniture district of Forlí, Italy, as a means to explain the development process, the constraints and the growth prospects that involve this industrial district and, perhaps, a wider variety of districts and SME-based clusters. We hypothesise that development is more likely to be generated when three main drivers, taken from the main bodies of literature on districts and clusters, are taken together: ‘collective efficiency’, ‘policy inducement’ and ‘social embeddedness’. The case study of Forlí helps to identify the trajectory of one among many Italian industrial districts and its solutions to deal with the new competition. Yet, our approach highlights some of the main difficulties that this district is facing nowadays and the related challenges for future development. The general lesson derived from this analysis is that traditional ways of regarding cluster development on the basis of collective efficiency need to be supplemented with an adequate weighing of the social embeddedness driver, as well as of the national and local policy environment. This approach delivers strategic analytical tools to interpret the reality of districts and to target effective development actions.