Prospects for flexible specialisation in less developed countries: The case of small-scale footwear production in Cibaduyut, Bandung, Indonesia

Abstract

The small-firm variant of flexible specialisation has been promoted as a viable alternative for revitalising clusters of traditional industries in less developed countries (LDCs). However, this avenue remains controversial because of various problems in the conceptualisation and implementation of this system of production. Previous findings remain equivocal. Therefore, any claims must be examined critically.This study explores the significance of the concept of flexible specialisation for future industrial and economic development in LDCs. It presumes that flexible specialisation has better prospects (or is more likely to arise) when the right preconditions, propensities and developmental processes exist. It uses a comprehensive model to capture and assess the potential of flexible specialisation in LDCs. The model operates mainly at the firm level with implications for the interfirm or the cluster level. It centres on entrepreneurs' efforts to interpret stimuli, make proper responses and produce intended outcomes, using internal and external resources. It combines entrepreneurial processes and macro contingent factors. This model facilitates inferences about the flexibly specialised status of enterprises and the cluster where they are situated. Extension of these inferences informs developmental processes towards a flexibly specialised cluster(s), leading to regional economic progress. Investigations are undertaken in the case of small-scale footwear production in the Cibaduyut cluster, Indonesia.This study shows both potential and constraints of flexible specialisation in a particular cluster of small-scale industries. The prospects for flexible specialisation in revitalising small-scale industries in LDCs are also clarified. More specifically, it has revealed that uncertainty and resource dependency are not sufficient for fostering collective actions. Entrepreneurs require a supportive local milieu and macro contingent factors to produce expected outcomes. Furthermore, it has indicated that, given likely shortcomings in entrepreneurial processes and unsupportive environments, flexible specialisation in clusters of small-scale industries remains a remote possibility in most LDCs. Yet, it does not necessarily mean that the nominated system of production is without value. Dynamic flexibility and collective efficiency remain valuable as developmental objectives for clusters of small-scale industries. The study indicates areas of interventions to achieve these intermediate objectives.