Flexible specialisation, the new competition and industrial districts

Abstract

Flexible specialisation, the new competition and industrial districts are concepts reviewed in this article to determine whether they can provide an alternative for the description of the industrial sector as a system of mass production. The concepts mentioned are discussed and criticized in this article. All three concepts stress the importance of a certain division of labour, of interfirm relations, of cooperation (versus competition), of technological development and innovation diffusion, of flexibility, the role of small enterprises and a local value system. However, a number of differences between the concepts are also highlighted, as well as the problems to use them in empirical research. It is concluded that the three terms are complementary and could be used in combination. The ‘flexible competitive districts’ would provide an alternative type of industrial organization, somewhere between the large scale integrated enterprise and the atomized self-contained individual firm. The challenge lies in turning the positive theory into a normative one. How can industrial development in Eastern Europe and Third world countries be turned into the development of flexible competitive district, which contribute significantly to the development of these countries and allow for an important role for micro, small and medium enterprises? It is argued that this can be done in the framework of urban and regional development policies, but this requires a different role for the government and the provision of an adequate infrastructure.