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Labor force in Bangladesh has been growing tremendously due to high population growth rate. To reduce poverty and to attain sustainable economic growth, it is imperative for Bangladesh to develop industries so that a growing labor force can be absorbed into non-farm industrial activities, since agriculture sector in Bangladesh has already been over populated and suffering from the problems of disguised and seasonal unemployment. However, there is no consensus on how to develop industries in rural areas of developing countries. In this study, using primary data collected from an informal hosiery industry cluster in a lagging behind northern district in Bangladesh, I have explained how local tradition combining with rural infrastructure and human capital of the rural entrepreneurs contribute to the development of a vibrant informal hosiery industry that creates job opportunity for more than 10,000 rural poor in a lagging behind northern district in Bangladesh.