Diffusion of knowledge and skills through labour markets: evidence from the furniture cluster in Metro Cebu (the Philippines)

A skilled and flexible labour force is often given recognition as one of the key features of industrial clusters of similar enterprises. In clusters of small enterprises, knowledge and skills are not embedded in firms, but in the local labour force and the movements of a skilled and flexible labour force serve as a channel for knowledge transfer between enterprises. Surprisingly, few studies have looked at how knowledge transfer through the labour market takes place. This paper uses the furniture cluster in Metro Cebu ( the Philippines) as a case in point to identify the transfer of knowledge and skills between workers in the context of a low-technology cluster. While knowledge and skills are transferred easily between workers, there are a number of difficulties for the labour market to serve as a model for the generation of new knowledge and hence upgrading of the Cebu cluster. The difficult combination of traditional artisanal knowledge and skills with formal knowledge on furniture-making hinders the effective utilization of the labour force as the key asset for competitiveness of the cluster.