Economic Clusters or Cultural Commons?: The Limits of Competition-Driven Development in the Ecuadorian Andes

We examine here two Ecuadorian towns and the state's efforts to support their development through competitiveness initiatives. Neoliberal, economic globalization is often equated with the insecurities of market competition. However, economic policy makers do not foment competition as much as competitive advantage. Whereas competition requires individual know-how, competitive advantage often involves cooperating to improve the underlying factors that help whole groups of firms. In Ecuador, policies have sought to engineer competitive advantage by creating industrial clusters. In our study, the town of Atuntaqui embraced the idea of clusters, uniting firms to work with international consultants and the Ministry of Industry. The economy has improved, but wealth shows signs of consolidation. The comparative case is a mechanized indigenous craft economy in Otavalo. Exploring how Otavalo's development has generated a set of shared resources anchored in a market plaza, we argue that its economy is best understood as a cultural commons. The experiences of both places have shown that economic development must take explicit measures to defend such commons if the gains of strategic cooperation are to be sustained in the long run.