Recent Evolution of The Use of The Term
Within the study of economics, the term has evolved and now implies the ways in which economic specialisation arises through clustering in a particular industry-zoned urban area. Since the 1980s, the term has become connotated with an important element of dynamic industrial development in Northern Italy, where after the Second World War clusters of small and medium-sized enterprises (SME) experienced strong growth. Industrial districts in Northern Italy have a coherent location and a narrow specialisation profile, e.g. Prato in woolen fabric, Sassuolo in ceramic tiles or Brenta in ladies' footwear.
The success of SME-based Italian districts was one of the many factors that motivated economic development organisations across the world to adopt cluster promotion as an approach to stimulate growth and job creation.
More recently, Italian industrial districts have been linked to Italy's poor growth performance. Firms in industrial districts battle to internationalise production, and they have only limited resources to invest in research and development.
Read more about this topic: Industrial District
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