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Why being local just isn't enough

For some industry clusters, being local may not be enough.

By Lilach Nachum and David Keeble 01 March 2002

For some industry clusters, being local may not be enough. A study of the media industries in the Soho district of central London suggests that global links are also essential.


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For governments, companies, entrepreneurs, financiers and many more, the dynamics of industrial clusters exert increasing fascination. Firms involved in local clusters of related activities hope to enjoy competitive advantages arising from the concentration in a tight geographic area of specialised labour and suppliers, and the presence of other firms engaged in similar or closely related activities. Such geographic concentration accelerates the flow of ideas and information between firms and gives rise to processes of collective learning that become embedded in the local area.

Cluster discussions tend to be dominated by the processes that take place in small areas and emphasise geographic proximity as a condition for their development. However, this interest in localised clusters has arisen at a time of rapidly growing globalisation, and is often related to firms engaged in intense international activity. The question arises as to what extent the processes that take place in local clusters can provide firms with the knowledge and expertise needed to compete successfully in international markets.


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