The territory : An important factor in local development

Abstract

This article outlines the evolution of the concept of "territory" from a simple space serving as a support for economic activities, as viewed in orthodox economic theory, to a key development actor within the new political economy of territories. The Fordist model, in crisis, failed to explain how certain areas, sometimes with limited resources, manage to forge their own development paths and even achieve competitiveness in the international market. A review of the theoretical landscape highlights the various socioeconomic and institutional mechanisms driving this local performance. The analysis reveals that a territory’s success is not solely the result of geographical proximity; rather, it depends on the interplay of organizational, social, cognitive, and institutional proximities. This dynamic fosters trust, lowers transaction costs, and establishes processes for collective learning and innovation. Studies of Marshallian and Italian industrial districts, localized production systems (LPS), technology districts, and clusters reveal an effective, hybrid governance model rooted in both cooperation and competition. In this context, the territory plays a central role, alongside local history and the creation of specific assets that cannot be replicated elsewhere. The article addresses the lack of resilience shown by certain structures in the face of global market demands. It also illustrates the complementarity between the local and the global, achieved through the development of specific assets that meet global market needs while preserving local identity. Finally, the article presents a synthetic and analytical matrix comparing the presented concepts of the territorial configurations.