The decline of a model? Challenge and response in the Italian industrial districts

Abstract The article presents an extensive critical review of recent debates on the restructuring of Italian industrial districts in the 1990s. It shows that, despite consensus on the empirical 'facts' of district restructuring, there remains extensive disagreement over appropriate public policies. This debate fundamentally turns on analysts' interpretations of how, or indeed whether, strong institutions and localized subcultures allow territorial networks of small firms to compete successfully with larger and more highly capitalized multinational corporations. But perhaps the most crucial and contentious issues are questions about the past adequacy of the districts' regulatory and service institutions in overcoming structural difficulties of the model, and, more importantly, about further innovations that may be required given recent changes in the external economic context. Keywords: ItalyIndustrial DistrictsIndustrial RestructuringInterorganizational NetworksInstitutional InnovationRegional Development