The Nexus of Industrial Clusters and Poverty

This chapter is the literature review of the book, which locates it within the existing theoretical literature. It begins by demonstrating the links between industrial manufacturing pathway, employment, and living standards. It provides key stylized facts supporting industrial manufacturing as a source of economic growth, followed by manufacturing’s impact on employment and poverty. After that, it touches on the nature and pattern of employment, whether formal or informal and its importance to labor’s well-being. It further provides insights on institutions in cluster development. Finally, it narrows down on clusters as a unique form of industrial organization and an entryway to linking industrial dynamism, social protection, and labor’s welfare outcomes. It highlights actors, mechanisms, and institutions considered in impacting productivity and human development in the industrial cluster literature and the likely role this can play from a social protection frame. Importantly, the chapter provides the justification for this work and presents the explanation for a focus on the nexus of clusters and poverty and why the gaps that currently exist in the cluster and poverty literature merit scholarly and policy attention.