Human capital, cluster formation, and international relocation: The case of the garment industry in Japan, 1968-98

Abstract

This article examines the changing roles of human capital in the process of the formation of industrial clusters, changes in marketing Channels, and the relocation of the industrial base to less developed areas and abroad, based on a case study of a garment cluster in postwar Japan. We found, among other things, that experience as local traders played a major role in the cluster formation. However, formal schooling assumes greater importance in later stages, when direct transactions with large customers replaced transactions with local merchants, and the international relocation of the production base became a major management issue.