The diminishing impact of clusters in global supply chains

An article in the Economist (April 16, 2011) describes the diminishing fortunes of clusters in Italy – cotton fabrics, jewelry, brass fittings etc.  Italy has over 100 such clusters, developed around generations of skill development and access to natural resources. Clusters were prized as aiding productivity improvement and innovation by Michael Porter.  But the dwindling fortunes of such agglomerations as their buyers turn to global sources demonstrates their fragility. As individual firms move away from focused industries to a portfolio of products to ensure survival, the question arises: Are clusters too fragile to be justified in a global supply chain ? Is there an alternative grouping of companies with differing skills that may be more appropriate in a global supply chain context than firms with similar skills ?  How should clusters in Italy evolve to survive their current challenges of higher cost and not enough intellectual property to be globally competitive ?

About aviyer2010

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