The Importance of Clusters for Sustainable Innovation Processes: The Context of Small and Medium Sized Regions

The purpose of the current paper is to provide a critical state-of-the-art review of current research on clusters and its correlation to innovation dynamics in small and medium-sized regions. In particular, we focus on the systematization of the main concepts and theoretical insights that are tributary to the cluster overview in terms of its relevance for the sustainability of the innovation processes, knowledge production and diffusion, which take place inside small and medium-sized regions. The present working paper takes into account the initial studies on English industrial districts (in the nineteenth century), passing through the Italian industrial districts (in the 70s and 80s of the twentieth century), until the modern theories of business clusters and innovation systems. These frameworks constitute the basis of an approach to endogenous development, which gives a central role to the interaction between economic actors, the society and the institutions and to the identification, mobilization and combination of potential resources within a particular geographical area.