The Emilia-Romagna agroindustry cluster, and the fruit and vegetable chain Alessandro ZAMPAGNA

1. The Emilia-Romagnaagroindustry cluster, and the fruit and vegetable chain Alessandro ZAMPAGNA Centuria RIT – Romagna Innovazione Tecnologia General Manager Adriatic Danubian Clustering Udine, 14 February 2011

2. 1. The cluster concept

3. Agro-food cluster NOT top-down planning But Self-originated and self-sustaining concentration of enterprises Fostered by local specialised services and funding The local government does not “create” clusters but helps the start-up and growth of the cluster through a support system composed of funding and especially services

4. Agrofood agroindustry cluster NOT a simple concentration of food processing enterprises But COMPLETE FOOD CHAIN SEGMENTS MACHINERY AND SERVICES INTEGRATION COMMON ROOTS

5. The agrofood sector development 1950-1970 : The modernisation of the agrofood sector GROWTH 1900-1950 1960 1970

6. The agroindustry cluster development 1970-2000 : The development of the Agroindustry Cluster INTEGRATION Farm machinery Processing machinery Refrigeration plants Packaging Logistics Biotechnologies (in vitro, biological control, fermentation, extractions) Information technology 1970 - 2000

7. The cluster r-evolution • The R-EVOLUTION of the new millennium: • The fall of agricultural product prices • The farewell of the sugar industry • La “vanishing” community funds • The Transport industry rationalisation • The opening international food product market • The “media” crisis (BSE, flue, dioxin) • Growing strategy differences of the three steps of the food chain: • Agriculture WHAT? What are we going to do? • Food HOW? How to be more competitive? • Machinery WHERE? Where to look for new markets? 2000 - ….

8. The cluster re-engineering • The REACTION: • The confusion of the farmers • Mergers of food enterprises (especially coop) • The new non-food chain • The internationalisation of machinery enterprises • Searching for integrated logistic • Which policy for the three segments of the chain? • Is it possible to re-integrate the cluster? • DOES THE AGROINDUSTRY CLUSTER STILL EXIST? 2000 - …..

9. The cluster re-engineering The 2000s cluster policy : INNOVATION Organisation Technology Agriculture Bigger farms New crops New networks Processing New commercialNew processes, solutions consumer-tailored products, ICT Machinery International growthHigh tech A POLICY TO INTEGRATE THE CLUSTER? Innovation & Services (information, networks, R&D, finance) 2000 - …..

10. The regional Service Centres Network Regional Administration ERVET ASTER Cluster B Agricultural farms Coops Processing companies Machinery companies Service companies ….. Cluster environment Centuria RIT CRPV, CRPA Experimental farms University & Research Centres Training Centres Labs Cluster A Agricultural farms Coops Processing companies Machinery companies Service companies …..

11. 3. The role of cooperatives in Emilia-Romagna agrofood clusters

12. Emilia-Romagna agricultural gross product amounts at 4,000 millions Euro. More than 50% of the agricultural produce is managed by cooperatives. Cooperatives have had a primary role in the development of the cluster. Agricultural Coops in Emilia-Romagna

13. How Coops were born FIRST-GENERATION COOPERATIVES • «Defensive» objectives: to protect members from market risks and to reduce costs through scale economies • “Decision Centre”: Board of Directors, composed of farmers, and Assembly «one head one vote" • Evolution: • Difficulties in maintaining margins • Develop new higher valued added activities along the chain (new-generation cooperatives) • Mergers or alliances to obtain greater scale economies

14. The evolution of Coops NEW-GENERATION COOPERATIVES • «Offensive strategy»: scale economies in activities closer to the consumers (processing, logistics, marketing), in order to get more value added. They try not to sell commodities but higher-value products. • Complete vertical integration, to obtain control of the whole chain. • Or strategic alliances with companies (even non coops) with synergic expertise.

15. The principles of New-generation Coops • Agricultural prices comes from the market; it is not realistic to think of control the agricultural product price. • Value Added is present all along the chain; every step of the chain to the consumer, gets a higher quota of Value Added. • To get more Value Added, it is necessary to invest in activities along the chain and get closer to the consumer. • Farmer income = agricultural product price + return from the investment along the chain

16. Some examples in the fruit and vegetable cluster

17. Diversificazione e segmentazione

18. PIU’ GUSTO AL BENESSERE

19. ricchi di fibre • basso contenuto di grassi

20. Ricchi di: • fibre • vitamine • composti antiossidanti

21. Il biologico e la tracciabilità

29. To foster internationalisation of fruit and vegetable cluster companies in the Mediterranean A bridge between the fruit and vegetable cluster and the Mediterranean

30. Mediterranean Fruit Company 27 Italian companies (in majority from Emilia-Romagna) in different businesses of the fruit and vegetable cluster, have decided to cooperate in order to promote their activities in the Mediterranean: • Fresh fruit and vegetable production and marketing • Packaging • Machinery • Services

31. M.F.C. offices MFC Italy MFC Egypt MFC Tunisia MFC Turkey MFC Russia

32. 3. The role of Centuria RIT Romagna Innovation Technology

33. The mission of Centuria RIT CENTURIA-RIT IS A SCIENCE AND TECHNOLOGY PARK AIMED AT ENHANCING THE COMPETITIVENESS OF THE TERRITORY AND OF LOCAL ENTERPRISES THROUGH INNOVATION It is at the same time: A crossway between institutions, enterprises and research to foster information exchange, technology transfer, contacts. A system of relationships, fed with added value services, to provide better access to knowledge, innovation, markets and capitals.

34. The environment sede di Faenza sede di Cesena

35. The environment INNOVATION INFRASTRUCTURES - University Agriculture, Food Science, Engineering, Information Science, Economics, Languages, Architecture, Psychology - Analysis and R&D Laboratories - Research centres - Training centres - Specialised international exhibitions - Available industrial facilities

36. The “soft” solution All the innovation infrastructures are present in the territory: No need for new incubators, laboratories, greenfield investments, etc. The need is to increase the relationship between the actors of the territory to increase innovation. Hence the “SOFT” solution: • Public private investment • Majority of private capital • No direct “hard” investment: • “Soft” activities only: networking, information, innovation brokerage, R&D project, etc.

37. The stakeholders Companies Leading companies Associations of entrepreneurs Banks 65% shares Research & training Local faculties of the University of Bologna CNR, ENEA Research centres Laboratories 0% shares Local government Municipalities, Provinces, Chambers of commerce Local health and environment authorities 35% shares

38. The logical framework INFORMATION AND NETWORK PROJECTS AND SERVICES News Info R&D Tech Transf Patent & tech monitoring Finance Intangibles Work groups Internationalisation Seminars conferences R&D COMMUNITY Tech Transf Publications Finance Area marketing New entrepreneurship MEMBERS

39. 1st activity: relationships network Information flow to the territory Selected information on patents and technology Commercial and joint-venture opportunities Selections of the competencies useful for the territory Information flow from the territory Area marketing Relationship with investors Common marketing operations Relationship inside the territory Between companies, laboratories, R&D centres, university, public administration, financial institutions Meetings, seminars, company open days Management of shared projects: start-ups, R&D, various collaborations

40. 2nd activity: Specialised services Institutions Banks Syndicates of entrepreneurs project management data mining market analyses technology transfer research and development business connections new business start up venture capital connections training JV development Universities R&D centres SME SME S.T.P. SME SME SME Big industrial groups SME SME

41. Concrete outcomes (projects, funding, patents, new companies, etc.) Satisfaction of the associates Low cost (flexible and light structure) No building(ex. laboratories, incubators), just offices No ad hoc public funding 80% of the investment in professional personnel and Information and Communication Technology The outcomes

42. Thank you