Marshallian industrial district

The concentration of specialized industries in particular localities. A. Marshall (1922) initially envisaged a region where the business structure consists of small locally owned firms, making local investment and production decisions, a substantial part of whose trade is carried out within the district, often on the bases of long-term contracts, and trust, and where low economies of scale prevented the rise of large firms. The distinguishing feature of this model is the local labour market, which is internal to the district and highly flexible. Individuals move from firm to firm, and owners as well as workers live in the same community; they appear to be committed more to the district rather than to the firm, so that labour out-migration is minimal. The district is seen as a relatively stable community which enables the evolution of strong local cultural identity and shared industrial expertise. Italian examples include the textile industry in Carpi and Prato, and the furniture industry in Brianza and Cascina.

The indispensable features of the successful industrial district are the links between the local system of small producers and the external final markets of their products, and the interplay of production activities and daily life. Thus, the success of the industrial district depends not only on the construction of strong links with the final markets, but also on the evolution of a unique local cultural identity.