Clusters and internationalization: the role of lead firms’ commitment and RIS proactivity in tackling the risk of internal fractures

Abstract

ABSTRACTIn this paper, we discuss the growth potential of clusters and industrial districts (CIDs) in international markets. Over the past two decades, CIDs have gone under increasing competitive pressure while markets have progressively globalized. Lead companies, either foreign or home-grown multinationals, have globalized their operations while often reducing their commitment (e.g. investments) within CIDs. As a result, a number of second, third and fourth-tier suppliers disconnect from global value chains coordinated by lead companies, leaving the cluster fractured and jeopardizing local development prospects. Only a few firms in the CID cope with globalization. This situation represents a challenge that CIDs need to take on. In this paper, we inquire about the importance of two factors that may represent crucial conditions for the upgrading of CIDs within global markets. The long-term commitment of lead companies with the local economy, together with the dense interaction between the regional innovation system and the lead companies and their new global innovation network, are found to be crucial elements for the resilience of CIDs and their small firms. A few successful CIDs are considered vis-à-vis others that face higher risks of internal fracture. Relevant cases in Spain, Italy, and Costa Rica are analysed here.