Abstract
Theories on the emergence and functioning of industrial districts are discussed. It is stressed that networking between small firms is not only based on economic considerations, but also on social and cultural factors. The Herning-Ikast textile district in West Jutland is presented as a typical industrial district. Whereas the textile industry has been declining elsewhere, it is thriving here on the basis of entrepreneurship, flexibility, innovation and networking. Based on a questionnaire survey as well as on the findings of other researchers, these characteristics are highlighted.

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