Urban manufacturing and the role of industrial relatedness in sustaining it: the case of the Brussels Capital Region.

This article investigates the role of industrial relatedness in supporting the productivity of manufacturing firms in urban areas, focusing on the Brussels Capital Region (BCR) from 2009 to 2015. Using two distinct measures of industrial relatedness—one based on input–output linkages (resource flows between industries) and another on product similarity within industry classifications—the study finds that industrial relatedness is the primary agglomeration force enhancing urban manufacturing performance, with input–output relatedness having a stronger positive effect than product similarity. The analysis, employing a two-step quantile regression model, reveals that related variety benefits manufacturing firms differently across productivity levels and firm sizes, with small manufacturing firms ("urban makers") particularly benefiting from input–output relatedness and local industrial concentration. The findings suggest that urban manufacturing’s knowledge spillovers are better captured by interindustry input–output relationships rather than hierarchical industry classifications, highlighting the importance of tailored urban policies that support industrial specialization and relatedness to foster manufacturing reshoring and economic resilience in post-industrial cities like Brussels.