Collective efficiency: A prerequisite for cluster development?

This paper is concerned with analysing the importance of collective efficiency for upgrading of clusters. The literature on collective efficiency ascribes it a crucial role in upgrading in clusters in developing countries. Little, however, is known about how insertion into global value chains affects the prospects of gaining collective efficiency hence, the paper analyses if Bangalore's insertion into global value chains has spurred or impeded collective efficiency in the cluster. Bangalore is considered a success case in terms of cluster upgrading in a developing country context. The paper finds mixed evidence of collective efficiency. Upgrading was mainly an aggregate outcome of an uncoordinated decentralised process managed by individual companies.