| Recent literature on industrial clusters and other local production systems has theorized the institutional foundations of sector-specific production, learning and upgrading processes. Concepts such as the industrial district and the learning region place varying levels of emphasis on the respective roles of the state, associational and firm actors, and basic agglomeration effects in maintaining competitiveness. This dissertation draws on field research to examine the micro-political economy of upgrading across three handloom textile clusters in the state of Andhra Pradesh, India. Particular attention is paid to the place of firms within their own clusters and national and international value chains. The dissertation develops the new analytical construct of the "belt", identified as an organizing feature for participants in regional labor, production and market relations. This scalar level is used both for market analysis and for examining governance activities and outcomes across clusters. Evidence from the three clusters points to important roles in product, process, and functional upgrading played by both private and public actors, as well as the need for improved use of socio-economic, spatial, and value-chain analysis in policy planning. Central to the analysis is the role of formal and informal institutions (e.g., wage regimes, training mechanisms, buyer networks, and subcontracting) as well as state interventions in upgrading functions. State design and training interventions are found to be most effective in the early stages of a cluster, while large-scale procurement and heavy state intermediation distort larger clusters' market orientation over time. Results indicate that upgrading is driven by lead firms (and to a lesser extent by external actors) who play a key role in shaping cluster orientation and competitive behavior. The role of formal cluster organizations in upgrading is found to be less significant: these exist mainly as hybrids of traditional forms of social organization regulating labor-capital relations and concessions from the state. Given the evidence of increasingly hierarchical cluster evolution, the study suggests there remains a role for the state in offering public good services, such as geographical-indications patent protection and capacity development in export standards, for firms of varying sizes. |
