Local Productive Systems, industrial districts, clusters Different designations for the same reality: an efficient organisation of small and medium size companies

The idea of an LPS, an industrial district or a cluster, applied to experiences in local economic development, embraces all the following characteristics (sometimes varying slightly according to circumstances):
- the concentration of small and medium sized companies in a region which is geographically restricted and defined by the location of the companies themselves
- specialising in one core business, around one trade or one product
- competing and complementary
- often supported by structures and partnerships with other economic players in the region

For the Datar, LPSs are defined as:
"a particular productive organisation located in a region which generally speaking corresponds to an area of employment. Such an organisation operates as a network of connections between productive entities engaged in similar or complementary activities which divide the available work between themselves (manufacturing or service center, etc.

(source: "Les systèmes productifs locaux" - Datar, La Documentation française, Paris 2002)

Other specific definitions for LPSs, industrial districts and clusters:


British clusters : "A cluster is defined as a group of companies in the same economic sector, strongly competitive and with a real geographic connection"

Italian industrial districts : "The Italian model has several specific features, in particular the historical roots and the strong collaboration between entrepreneurs who draw on a network of informal relationships. Thanks to their entrepreneurial spirit and their particular financial methods, these geographic groupings of companies in the same economic sector are notable for their capacity to adapt to changes in the market and their low unemployment rates"

Local productive systems : "A group of enterprises and institutions in close proximity to one another, collaborating in the same economic sector"

(source: glossaire de "Les systèmes productifs locaux" - Datar, La Documentation française, Paris 2002)