The Role of Human Capital in the Development Process of Industrial Clusters: Evidence from Metalworking Clusters in Sri Lanka


  • The author is grateful to his supervisor, Seiichi Katayama, Professor of Economics at Aichi Gakuin University, Japan, for his helpful advice, comments and suggestions.

H.M. Nihal Padmasiri, Graduate School of Commerce, Aichi Gakuin University, Japan. Email:


This article seeks to explain how human capital assists industrial development through the developmental process of metalworking clusters in Sri Lanka. For this purpose, an individual firm’s data set collected by the author is used. The study yields four major findings: highly educated and experienced managers in the cluster tended to use brand names; the managers’ human capital as accumulated through formal education and experience positively influenced the firms’ performance; the engineers and machinists who comprised the most skilled labour made a positive contribution to the size of the firm; and the managers’ education played a crucial role in accessing international markets.