Dynamics in the world economy since the 1970s have provoked a debate between proponents of industrial district and corporate dualism theories of economic change. This article investigates how well the two theories fit economic development trajectories in Tokyo and Osaka and draws lessons for North American economic revitalization efforts. District and dualism analysts both claim Japanese industrial organization fits their thesis. Findings by Japanese researchers and results from our own field work suggest that Japan's development pattern (a) combines elements emphasized in both theories, but (b) district theory fits contemporary Tokyo and Osaka much better than dualism. Place-based, small-firm networks, supported by local institutions and strategic government policies, have been a vital ingredient in Japan's manufacturing success. The range of internationally effective competitive strategies is thus wider and more fluid than what the new dualism theorists allow.
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