Exploring vs. exploiting advantages in industrial districts

Abstract

This paper proposes a theoretical integration of social capital and territorial perspectives for the study of industrial districts. Industrial districts benefit from fine-grained information and tacit knowledge exchanges and from norms and values that promote cooperation. These characteristics benefit individual firms for the exploitation, rather than exploration, of technologies and opportunities. We suggest that proximity facilitates the creation of third-party relationships, such as those between firms and regional institutions. These institutions provide individual firms with indirect links to sources of knowledge from outside the district. In order to give support to our theoretical argument we examine the Spanish ceramic tile industrial district and focus on the role played by the Institute of Ceramic Technology as an illustrative case.