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Compared with a decade ago, there is now more optimism concerning the growth and export prospects of small manufacturers in developing countries. Recent research on industrial clusters has made a major contribution to this shift in the debate. There is increasing agreement that clustering helps small enterprises to overcome growth constraints and compete in distant markets but there is also recognition that this is not an automatic outcome.

One of the main objectives of this Special Issue is to specify the circumstances in which clustering boosts industrial growth and competitiveness. This Introduction stresses that such an undertaking needs to distinguish between incipient and more advanced stages of industrialization. It argues that clustering is particularly relevant for the early stage by helping small enterprises to grow in riskable steps. Some articles in this Special Issue show both the importance and limitations of this argument. Other contributions focus more on mature clusters that include medium and large enterprises. These contributions examine the ability of such clusters to cope with global competitive pressures and they help to specify the circumstances that make the difference between success and failure.