What term describes the geographic clustering of firms in many industries?

The term that describes the geographic clustering of firms in many industries is regionalization of trade. This phenomenon occurs when businesses within the same industry locate in proximity to one another, often to benefit from shared resources, labor pools, and knowledge spillovers. Regionalization can enhance innovation and competitiveness, as companies can easily collaborate, exchange ideas, and access suppliers and customers.

This clustering is often observed in technology hubs, manufacturing zones, or financial districts where firms concentrate to leverage collective advantages. By fostering close-knit networks, regionalization can lead to improved efficiency and a stronger market position for the businesses involved.