2. Industrial Clusters: A Critical Reading of Different Theories
2.1Standard Agglomeration Theory, From Marshall Onwards
Marshall, in his writings on Sheffield, Lancashire and other British regions, viewed the main source of external economies as the ‘commons’, the infrastructure and other services from which each individual firm in an industrial district might draw (Marshall, 1921). Examples include, in modern terminology, improved job search and job matching, more favorable access to capital finance and inter-firm labor migration. The availability of such common resources to a number of firms then enhances their size and diversity as both capital and labor are attracted to such areas to exploit the larger markets for their services. This in turn leads to reductions in factor prices and/or increases in factor productivities. These are the ways in which the external benefit to firms of a location in the industrial district manifests itself. Unit production costs will be lower within the industrial district than out with it.
