Knowledge and Innovation in Manufacturing Sector: The Case of Wedding Dresses in Southern Italy

The neoclassical production function assumes that economic growth depends on exogenous factors of production centred on capital, labour and technology. However, residual variables, notably social capabilities and knowledge, are neglected. This study seeks to highlight that, in fact, they are key variables for understanding the economic growth and recent structural changes of an industrial cluster, both in technical and organizational terms. In this work, the peculiarity of knowledge and in particular of tacit knowledge form a crucial element in the social capabilities that are associated with enlarging knowledge learning processes and network diffusion. The aim of this research is to analyse the key role that knowledge and innovations play in the local wedding system of Bari in Puglia. They are the decisive factors in the survival of firms in a global market for the creation of competitive advantage and provide a basis for continuous innovation. The relationship between innovation and knowledge is discussed in the theoretical part of the paper, while the empirical aspect remains based upon results of consumer and producer surveys. The objective is to show how innovation, including demand-driven, can influence companies’ behaviours.