The selected evidence discussed in this paper suggests three interrelated propositions. First, there is no one best model for organising an industrial district or an industrial cluster, since a diversity of institutional arrangements is possible and each has proved successful in different circumstances. Second, clusters are not cast in iron, but they evolve over time. Third, globalisation reshapes the upgrading options for SME-based clusters, by providing a variety of international knowledge linkages. In a nutshell, globalisation changes both the concept of proximity and the scope of competition: a necessary prerequisite for competitive survival is the capacity to foster the co-evolution of local and global linkages and networks, and to develop new interactive modes of knowledge creation. This paper presents original evidence on Taiwanese and Italian SME-based clusters. A key explanation of the success of SMEs competing in globalised high-tech industries, supported by our survey evidence, is the co-evolution of domestic and international knowledge linkages.
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