The term was used the first time by Alfred Marshall in The Principles of Economics (1890, 1922). and in "Industry and Trade". Marshall talks of a.... "thickly peopled industrial district".
The term was also used in political struggle. The 1917 handbook of the Industrial Workers of the World states:-
The term also appears in English literature. For instance, in a short story of 1920 by D. H. Lawrence, You Touched Me (aka 'Hadrian'):-
The strong specialisation of the workers and an appropriate support of public goods and institutions are supported by an "Industrial Atmosphere" related to a locally developing division of labour. Competences and knowledge are shared in informal way with processes of learning by doing and learning by using, and this promotes innovation over time. Local firms, families and civic organisations are connected by way of both market mechanisms and non-market mechanisms, like trust within bilateral or team exchanges, and collective action supporting the availability of local industrial, social and environmental infrastructure. Also, the notion that firms located in geographical proximity benefit from agglomeration effects in having a common or collective infrastructure is frequently mentioned as one of the main bases in the industrial district literature.
Within the study of economics, the term has evolved. Giacomo Becattini rediscovered the concept to describe the Italian industrial configuration of the middle of the 20th century. Since the 1980s, the dynamic industrial development in NEC (North, East and Centre) of Italy, where after the Second World War geographical concentration of specialised small and medium-sized enterprises (SME) raised up, led to an increasing attention to the Marshall' seminal works. A growing literature with an accompanying cloud of definitions of what is meant as an industrial district characterised the international dabate, e.g. Cluster. Industrial districts in Italy have a coherent location and a narrow specialisation profile, e.g. Prato in woollen fabric, Sassuolo in ceramic tiles or Brenta in ladies' footwear.