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The economic crisis has shown that being embedded in a local production system (LPS) is still a source of competitive advantage for firms. However, not all LPS are capable to sustain the competitiveness of embedded firms in the same way. There are some in which the economic crisis has emphasized the existence of structural constrains bounding it. The objective of this paper is to explore, in a preliminary fashion, which local factors have contributed most to sustain competitiveness of firms during this crisis. We argue that only LPS displaying an ecological character have been capable to sustain the development of local firms. That is, only LPS characterized by a diversified base on knowledge and competence, on the one hand, and open to external interaction, on the other hand, have been capable to limit the impact of the global economic crisis on the local firms. This result is supported both from a quantitative analysis of the economic growth in Italian LPSs and grounded on an historical analysis of their evolution. Three variables are addressed: local organization of social and technological relationships; forms of knowledge sharing and learning; local forms of governance. This evolutionary model is applied to different Italian LPSs to map their state development and address a set of customized policies to sustain their development.
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