Divide to Conquer? Limits to the Adaptability of Disintegrated, Flexible Specialization Clusters

This article investigates the role of disintegration for the adaptability of clusters. It develops a simulation model to test when disintegrated flexible specialization clusters can be more adjustable than those with firm centred, quasi-integrated production networks. The benefits to flexible specialization are conditional on limited product complexity and greater firm numbers. Moreover, flexible specialization increases the risk of firm failure. For the viability of such clusters, strong start-up dynamics are therefore required. These results provide an explanation for the contrasting evidence on flexible specialization and adaptability in Italian districts and the Silicon Valley Boston 128 case