Small enterprises and the process of globalization and regional integration

Developed countries and countries of the Third World look to South East Asia as a model of regional economic vigour, where the small-scale business sector has flourished. This article suggests that positive aspects of the region's economic success, such as co-operation and linkages between firms in a sector, need to be emulated, rather than the low levels of work-force organization, which have kept labour costs down at the expense of poorly paid workers. The article describes the great potential of clusters of entrepreneurial small firms to transform a city or region through strategies that have been described by concepts of 'flexible specialization', the 'new competition' and 'industrial districts'. An alternative industrial development strategy is suggested, combining elements of all these ideas.