The present study is confined to incorporate two particular factors determining localized industry formation relates, namely innovation (new economic knowledge production) and labour (skill) mobility. It becomes difficult for several of the small informal firms with their extended organizational networks at the local level to get easy access to new economic knowledge production through executing their own R&D due to their insufficient fund. One important access for them comes from the process of spatial (skill) labour mobility to grab the on-going innovation in the market. Therefore, it is a significant insight to detect the strategies the small informal firms do adopt to become familiar with the ongoing changes in the market in order to get access in the new economic knowledge production in order to ensure their survival within the industry by accruing their network in the process of on-going spatial labour mobility. The “network” migration serves as an effective mechanism for the small informal sector entrepreneurs to grasp the new economic knowledge production in the process of socialization in a cost-effective way, thereby promoting growth of the industry. The logical argumentation of the study is based upon literature support, case studies conducted and primary survey results with appropriate analyses.