Human Capital and Multifaceted Innovation: Evidence from the Lahore Knitwear Cluster in Pakistan

Abstract

Clusters have the potential to grow, but their potential in Pakistan is rarely analyzed and examined. This study examines the knitwear cluster of Lahore in general and the performance of enterprises in particular. Most of the literature on clusters in Pakistan has not looked at the characteristics of the individual enterprises that play a pivotal role in cluster development. Using primary data collected from 59 finished-knitwear producers in Lahore, this study assesses the role of human capital in acquiring multifaceted innovations. We find that general human capital acquired by schooling and specific human capital acquired through operational experience is associated with the size of the enterprise. Additionally, specific human capital acquired through operational and marketing experience is strongly correlated with improved marketing channels.