Rise and fall of the Lyon silk cluster: a case study about entrepreneurial sustainability

Innovation is the key driving factor for economic growth and social wealth. Already Joseph Schumpeter emphasized the importance of innovation for entrepreneurial activities by incessantly revolutionizing economic structures in order to get better or more effective processes and products. So a lack of innovation may quickly lead into business failure or – even on a sectorial level – loss of market positions. An actual example is the textile design sector located in the city of Lyon, which rose together with the Lyon silk industry for centuries and collapsed and nearly disappeared nowadays, although it occupied the world leader position up into the 1970ies (Bonetto et al. 2014). Innovation is the specific tool for entrepreneurs to exploit business opportunities and innovation is also one of the key driving factors for economic grow and social wealth. Innovative products and services emerge more often as a result of cross-sectorial combination of technologies, design and business models, especially in the context of regional clusters (Drucker 1985). Already Joseph Schumpeter emphasized the importance of innovation for entrepreneurial activities by incessantly revolutionizing economic structures in order to get better or more effective processes and products. His famously words concerning “creative destruction” stressed already the close links between entrepreneurship, innovation and design (Schumpeter 1911). Numerous articles of scholars discuss how innovation procures substantial income on the international markets and allow benefiting from competitive advantages. This paper will focus on the fact how lacking investment in innovation and specific business culture lead to situations where disadvantages take a cumulative character which strengthens the process of decline of economic competitiveness and loss of market shares. In the case study about the life-cycle of the French silk industry and its related entrepreneurial activities in the area of textile design in the city of Lyon, it is illustrated how a lack of innovation related with a specific entrepreneurial behavior is leading to a collapse of the whole sector, which, until the 1970ies, occupied a world leading position in this field. The case study is based on interviews of experts and actors involved in this business, witnesses to the activity’s collapse, on desktop research and the study of documents which analyze the evolution to the currently existing situation. Currently, only isolated persons continue on a free-lance basis the traditional activity, most of them close to retiring age. A few companies, with significantly reorganized activities do as well continue their activity.