especially for training and innovation. The VDI had to organize the education ofengineers at polytechnics, since engineering was difficult to establish at universitylevel throughout the 19th century (Keck 1993). Although Germany had 27% of theworld production of machinery in 1913 (ibid), the education of engineers wasconsidered a second-rate science.However, in Stuttgart and Württemberg engineering constituted a way out ofagrarian backwardness; the polytechnic school in Stuttgart had been transformedinto a Technische Hochschule (allowing university level technical education) as earlyas 1876. The consequent specialization in engineering disciplines helped the industrycompete successfully against British and US firms. The relevance of singularengineers and inventors like Gottlieb Daimler, Ferdinand von Zeppelin, WilhelmMaybach, Ferdinand Porsche or Karl Benz cannot be denied for the region.However, increasingly important was this general scientific approach towardsinventions in the field of machinery construction. The University of Stuttgartestablished chairs for motor vehicle construction and aviation technique in the firstquarter of the 20th century.As Keck (1993) has shown, higher education was generally important inGermany after 1870, but the specific specialization of Stuttgart and Württembergneeded additional instruments of collective goods provision, even in such wellestablished fields as worker training. For larger firms it has always been importantand possible to develop such skills via in-house production; in 1925 Daimler hadestablished an in-house apprenticeship school (Werksberufsschule) which on averagehad 200 apprentices obtaining their certificate every year (Daimler-Benz 1998). It hasalso been claimed that inter-firm cooperation, even between competitors, has alsobeen important (Herrigel 1987; 1996a). This has recently been contested, otherscholars denying that regular cooperation among competitors can be found(Braczyk, Schienstock and Steffensen 1996; Kerst and Steffensen 1995). Although weshall show that such cooperation began to rise under the pressure of increasingcompetition in the 1990s, in general clustering of machine tool firms does notprimarily result from cooperation among small firms, but from that between largecustomer firms and SMEs – from the networked firm rather than from networks offirms (Crouch and Trigilia 2001).