Twenty-two years ago, Piore and Sabel (1984) identified a ‘second industrial divide’. The aim of this paper is to propose some reflections, starting from that work, on the interaction between industrial organisation and institutional configurations as it has evolved in Italy in the form of ‘industrial districts’ or ‘regional clusters’. Given that Piore and Sabel proposed a necessary change in institutions, our concern is whether the flexible specialisation model, characterising industrial districts and regional clusters, really requires institutions to have less of a stabilising effect. Contrary to Piore and Sabel, we suggest that such systems do not benefit from a general deregulation and from a substantial rise in uncertainty due to the demise of stabilising institutions.
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