Linking Local and Global Economies: The Ties That Bind

Linking Local and Global Economies: The Ties That Bind

Linking Local and Global Economies: The Ties That Bind

Linking Local and Global Economies: The Ties That Bind

Synopsis

Clusters of small and medium sized enterprises (SMEs) have to adapt continually to a fast changing environment. This new book recognizes the disparity between conditions in different countries and poses some interesting questions about what might be termed "post cluster globalization."

Excerpt

Global constellations of production and technology are changing in ways that are hard to analyse and difficult to predict. the traditional division of labour between a developing South, providing primary materials and cheap raw labour and a North providing capital, skill and technology intensive manufacturing and services is breaking down. There are now several developing countries that are competent producers of sophisticated products and technology-intensive services. Though such industrial and technological dynamism is limited to a few countries in South, the phenomenon does call into question the received analytical framework for analysing the global economy. New explanations of globalisation are growing apace, and form some of the most exciting areas of the analysis of development, trade, industrialisation and technical change.

This book explores these issues for small and medium enterprises. SMEs are flourishing in the new global economy, but their character is changing. They are finding new ways to compete and grow, to participate in the global value chains that increasingly dominate production and trade, and to tap the dynamics of information-based technical change. They are major exporters of products and services; they are important niche innovators; they are integral parts of the supply chain of large enterprises; and they are the most flexible and adaptable part of most economies. One aspect of their success, the ability to form active clusters and deliberately tap the benefits of agglomeration and collective action, has been intensively studied in the context of Italian industrial districts. Another has been the rise of high-technology sme clusters in industrial and developing countries. Since SMEs constitute the bulk of enterprise activity in any economy, it is of clear policy and analytical interest to understand the drivers of such success.

The contribution of this book lies in its focus on the process of technical change, development and competitiveness in SMEs, both in developing countries and South Europe. the approach is not the conventional one of comparing capital-labour intensities between large and small enterprises. It is to treat SMEs as a separate category of business organisation and to see what lessons their success offers, grounded in the technological capability approach. Some papers focus on the cluster element, others on linkages between small and large firms and others on their integration into global value chains. One theme that recurs in several studies is that an important - perhaps the most important in the future - way to gain

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