The New Complexity of Local Production and the Enlightened Role of Industrial Policy

Within this specific contribution we focus on a group of structural transformations that take place within local production systems, namely clusters and districts. This change represents one of the responses of the western economies to the challenges put forth by the emerging powers (e.g. China and the likes). The central idea of this work revolves around the concept of cluster, which created a heated debate over the past two decades. In fact, some stressed the relevance of the width of the interconnected activities and institutions that compose a specific cluster, whereas others tended to equate the concept of cluster with that of district in key aspects such as geographical reach and width of activities. Within this debate, this work offers two meaningful elements. First of all, we focus on new cluster formations that represent the new industrial complexity of local production systems across the western world (mainly Europe) that respond to new challenges set by globalization. In this way, we may thus verify whether former conceptualizations are definitive or may incorporate new features. Secondly and simultaneously, the relevance of a proactive regional policy approach is discussed as a means to build up such competitive response to globalization.