Small-industry clusters, accumulation of technological capabilities, and development : a conceptual framework

Research on clusters of small and medium industrial enterprises in developing countries is increasingly focused on the determinants of long-run competitiveness. This paper develops a conceptual framework to analyse this issue. It builds upon, and links up, research about collective efficiency in small-industry clusters and literature about acquisition of technological capability in development. It identifies the different agglomeration advantages that commonly occur in industrial clusters and then examines the ways in which these advantages may boost knowledge accumulation within firms in a cluster. Theoretical insights from literature about clustering, agglomeration advantages and technological development from developing and advanced economies are combined in order to make the assessment