Industrial Clusters and Regional Business Networks in England, 1750-1970 (review)

Clusters, networks, and regions have taken on something of a life of their own in the past several years. Their continuing vitality largely is based on the promise that they may not only help to explain the success of certain small-scale industries during the era of mass production, but also to identify alternative paths to economic development. As such, these concepts may have both heuristic and practical value. The thought-provoking collection of essays under review here offers a timely evaluation of both the virtues and limitations of this 'regional turn' in British economic history. Significantly, the contributors to this collection do not accept cluster or network theories uncritically. The dozen or so empirical studies that comprise this volume constitute a set of 'test cases' in the truest sense of those words and, in many instances, the authors find that the theories previously propounded by economists have significant shortcomings when judged against the historical record. It is to the great credit of the volume's editors that they have largely succeeded in bringing together a coherent set of essays that treat an important topic in a meticulous and cautious manner.

The best essays here probe and question the extent to which network and cluster theory explains the historical development of regionally agglomerated industries. John F. Wilson and John Singleton's essay on Manchester, for example, ultimately questions whether flexible specialization, often considered a key characteristic of these regional business districts, was actually more adaptable to changes in the economic climate than large-scale, single-industry enterprises. Their findings, contrary to received wisdom, indicate that the early advantages achieved through regional clustering, including such 'multiplier effects' as the attraction of new industries to the area and the development of industrial and financial networks, eventually "fossilised and developed sclerotic tendencies" (p. 64). The very institutions, therefore, that were theoretically supposed to epitomize the unique flexibility of the industrial district eventually hardened into its shackles as networks defended declining older industries andinhibited innovative responses to competition and economic recovery.

In a similar manner, several essays question the extent to which business networks superceded or supplanted competitive market conditions. Clustering and network theory often links the external economies enjoyed by many small firms in an industrial district not only with the alleged advantages of flexible specialization, but also with the creation of an alternative business environment that emphasizes cohesion, coordination, and cooperation. These theories therefore often call special attention to the nature of the links that bind networks of entrepreneurs, merchants, or financiers together and suggest that entrepreneurs within an industrial cluster often exhibit a greater degree of mutual trust than is common under 'normal' competitive conditions. Francesca Carnevali's analysis of the mid-nineteenth century Birmingham jewelry trade shows something quite different, however. Here, the trade suffered from chronic problems of fraud, theft, and dishonesty, hardly what one would characterize as a high-trust community. Nor were such networks as egalitarian as one might expect. Andrew Popp argues that in the Widnes chemical district the chief network organization, the Widnes Traders Association, was always hierarchical "with strong leadership provided by a relatively small cohort of entrepreneurs drawn from the district's largest firms" (p. 223). Finally, Sue Bowden and David Higgins' analysis of the interwar cotton and woolen textile industries reveals that while trust may be an important element in determining the fate of regional business districts, it is often contingent upon many other factors, especially the prevailing economic environment. Obviously, it is always easier to maintain honor among thieves when markets are expanding and profits are high. During hard times, however, such trust, as exhibited by the actions of regional employers' organizations, was much less dependable.

In fact, the element of contingency that Bowden and Higgins' essay so artfully excavates in the case of the northern textile industries is also a critical perspective that ties many of these contributions together. Much...