Local Sources of Competitiveness

Everyday and everywhere, people start new businesses. Many of these small firms do not grow; many even go out of business.Enterprise death is all the more common in developing countries, where producers have to cope with additional problems which reinforce the disadvantages in resources of small firms. Local sources of Competitiveness addresses the question whether the spatial clustering of firms within a certain industry helps small manufacturers to survive and improve their performance, and if so, how. The clothing industry in Lima, Peru, has been examined, focusing on a cluster of almost 7,000 small firms in a neighbourhood near the old centre of Lima. In addition, this book develops a conceptual framework to refine our understanding of how different processes of clustering may affect the behaviour, strategy and performance of small firms. Insights are provided into the type of policies that can enhance the dynamism of small-firm clusters.