Small firm industrial districts are increasingly being observed as being competitive in national and international markets. This paper explores one particular case of a successful Southern industrial district. It probes how a cluster of predominantly small firms have made Pakistan a key global player in the world market for stainless steel surgical instruments.
The paper argues that cheap labour is an insufficient explanation for international success. Instead, it is argued that clustering, and the collective efficiency gains that it generates in the form of passive external economies and actively pursued joint action benefits, can significantly enhance the ability of the cluster as a whole to compete and grow.
