The interplay of small and large firms in the concept of ID: an historical perspective

Despite the new interest shown by many economists, social scientists and observers of the changes of the modern socio-economical reality for the concept of the industrial district – ID – (or for analogous and related notions like clusters, industrial milieux, etc.) the analysis of this particular form of industrial structure is quite old, and dates back to the early studies of Alfred Marshall (1860s). Industrial district has become nowadays a conceptual category which can be contrasted to the idea of the large hierarchical firm which dominated the economic scene in the Fordist era, but it is also a modality of resource coordination which has been developed historically in many organisational “territorial variants” which include a diverse interplay of small and large firms. This was observed by Marshall himself when he wrote that an industrial district can be made either of large or small firms, even though the latter get more important advantages. Our analysis tracks back the development of the concept of ID along an historical perspective that considers not just Marshall’s but also the contribution of Sargant Florence with his “discovery” of the efficiency of “highly localised industries”, passing through the “evolution of localised industry” of others British economists belonging to the “old Cambridge school”, like Chapman and Robertson, since it will encounter the modern interpretative economic reflections on the clustering of economic activity.