How do mature manufacturing sectors in a high wage context remain competitive? This dissertation addresses this question by examining the case of New York City women's wear. Drawing on seventy-five in-depth interviews and a comprehensive survey, the study finds that women's wear manufacturers have remained innovative by drawing on an extensive institutional and organizational infrastructure that has emerged in the midtown Manhattan Garment District. This infrastructure (or 'innovation system')---which consists of design schools, buying offices, forecasting services, trade associations, competing and complementary firms, and the institutions (habits, rules, norms) that shape their inter-relations---supports the manufacturers' innovation process by providing market-sensitive information and the capacity to utilize the information in the design and marketing of products. The spatial concentration of institutions and organizations helps to promote the development of shared understandings and conventions, which facilitate the exchange of information between District actors. The agglomeration of activities also benefits manufacturers in indirect ways, by enabling them to monitor the performance and solutions of rival firms as well as rival production systems. While most theories on industrial agglomerations cite the economic significance of consensus and system coherence, this dissertation argues that it is a balance between stability and an openness to novelty that underlies the Garment District's innovative capability. It concludes with a discussion of the theory and policy implications that this case suggests for promoting industrial agglomerations.
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