Twin Brothers in Marshallian Thought: Knowledge and organization

The development of Marshallian thought in the realm of business theory has contributed to the appearance of a new branch of economic theory: Industrial Organization, as pioneered by Stigler. This theory relies, to a large degree, on the idea that a mutually beneficial relationship is produced in the industrial environment between the creation of new information and the organizational improvement of related firms. This symbiosis between knowledge and organization is the driving principle behind the ‘industrial districts’ which Marshall announced a century ago, and is most recently embodied in the contemporary industrial clusters such as Silicon Valley. However, Marshall distances himself from his equilibrium model when dealing with the issues of obtaining and managing information within the firm itself, creating a weak link in his own argument.