Clusters in the Global Economy

For the last few decades, IDS has been a leader in research on clusters in developing countries. Initially, during the 1990s, this research was driven by the hypothesis that competitiveness depends on the quality of relationships in the clusters. The results of this work can be found on our Clusters and Industrial Development webpage

More recent research has concentrated on the interaction of local and global relationships. This work is driven by the following question: what is the scope for local upgrading strategies where clusters are inserted in global value chains. For the results of this work see below.

While the debate on industrial clusters and local innovation systems is mainly concerned with local linkages, this project examined the global linkages and how they affect local relationships. Examining clusters through this new lens transforms the understanding of local upgrading strategies and options.

A key question of the project was who sets the parameters for local producers. These producers do not just export into an anonymous global market; often they feed into value chains which are governed by powerful global players. They set and/or enforce the parameters under which other enterprises in the chain operate. Other parameters are set from outside the chain, notably the new quality and labour standards. In this project we asked whether and how they affect different upgrading strategies.

Key contacts

Project details

start date
4 January 1999
end date
31 July 2002


Supported by
Volkswagen Foundation

About this project

Research themes
Inclusive Economies


Image of Hubert Schmitz
Hubert Schmitz

Emeritus Fellow

Image of John Humphrey
John Humphrey

Professorial Fellow

Image of Lizbeth Navas-Aleman
Lizbeth Navas-Aleman

Honorary Associate

Recent work

Working Paper

The Struggle to Develop Regional Industry Policy: The Role of the Plastics and Auto Sectors in the Regional Chamber of ABC, São Paulo

Published by IDS

Much of the current policy debate on fostering the industrial upgrading focuses on the importance of local or regional policy networks. The question, which has been neglected in this debate, is whether conducting local or regional industrial policy is possible where local enterprises are part of a global production system.

1 January 2002

Working Paper

The Concept of the ‘World Economic Triangle’: Global Governance Patterns and Options for Regions

Published by IDS

This study investigates the scope of action open to regions in the world economy. Approaches concerned with the growing importance of 'regions in the global economy' seldom address the issue of altered global rule systems and governance structures. Instead, they focus on the challenges 'inside' regions, for example, the growing need for local networking among actors as a means of developing endogenous technological competence.

1 January 2002

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