This article argues that conventional approaches to infrastructure reform in developing countries underestimate the agency of local actors and organisations in assisting small and medium-scale enterprises (SMEs) to surmount problems. It uses case study material based on Sialkot’s City Package Project to illustrate how state initiatives combined with SMEs’ efforts engendered a group-based coordination process for an endogenous solution to upgrade infrastructure. This process generated social benefits for the entire industrial district. By using ideas from the learning-centred approach, this article analyses the micro-processes and institutional arrangements of building state–SME relations for solving infrastructure problems. It concludes by reflecting on the need to rethink the strategic role of actors and institutions for SMEs’ infrastructure needs in industrial and regional development.
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