Promoting Supplier Clusters

SME clusters have long been recognised as dynamically efficient local production systems (Marshall, 1916). An examination of the institutional arrangements that underpin the original “Marshallian” industrial district model — networks of SMEs linked into local large enterprises as sub-contractors, a plethora of local education, training and related support institutions, local social structures fostering the rapid interchange of ideas and experiences within the business community reveals that such structures largely arose spontaneously and over a considerable time. For SME clusters to emerge in a particular locality therefore required efficient market dynamics, patience and some luck.