The Competitive Foundations of Localized Learning and Innovation: The Case of Women's Garment Production in New York City*

Abstract: This article considers the relevance of the “local” for firm learning in New York City's Garment District. By documenting the design innovation process in the district's women's wear industry and the ways in which designers draw on the district's specialized services and institutions to assist in the process, the article examines how a localized agglomeration or “cluster” facilitates the development of shared conventions and practices. It also shows how the district confers benefits on firms in indirect ways. Since apparel manufacturers operate in a U.S. regulatory framework that inhibits cooperation, the Garment District's support institutions serve as production intermediaries, providing firms with a means to monitor and observe rival firms' performances and solutions. As such, the case of the Garment District poses interesting challenges to the prevailing conceptions of the “local” as a site for cooperation and suggests the need to rethink the relevance of competition for learning and innovation.