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The Italian Industrial Districts : evolution and features

The Italian Industrial Districts : evolution and features. Global and Local Development Regional Economic Policies 2014/2015 Professor Cristina Brasili. Endogenous Growth Model.

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The Italian Industrial Districts : evolution and features

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  1. The Italian Industrial Districts: evolution and features Global and LocalDevelopment RegionalEconomicPolicies2014/2015 Professor Cristina Brasili

  2. Endogenous Growth Model In Italy endogenous growth theorists focus on the role played by the Small and Medium Enterprises (SME) and especially, the local economic systems they engender - i.e. the industrial districts • Why is that so? • Signorini in Lo sviluppo locale (2000) names it the “Structural Paradox of Italy”, that is: • an industrial basis made up of micro and small enterprises specialised in traditional sectors • A sharp North-South Dualism differentiating the socio-economic system of North from that of the South of Italy • Production mostly at low-technological and low-capital content

  3. The Industrial Districts (IDs) • In the Principlesof Economics(1919) Marshall wrotethat an area with a high concentration of small firms can be definedasdistrictwhen: • production is flexible. Firms in the district make the most of efforts to meet the clients’ needs; when dealing with wholesalers strive to produce the whole selection of products required by these clients; • there is a concentration of flexible small and medium firms in particular localities; • some of the small and medium firms operating in the district sell directly on the market, while other produce intermediate products that are functional to the final production of the district; • there is no strict distiction between firms producing final products and other producing intermediate components; a firm can be both producer of final products for some of its production and subcontractor for other production; • cooperation and competition are intertwined in the district; firms tend not to compete, rather make efforts to ensure a slice of the market for themselves without having disruptive effects on other fir s and within the district; • the districtisembedded in small area characterised by a core production; • thereis a strong interdependencebetween the district’s performance and activities and the social and economic life of the geographic area whereitislocated.

  4. The Industrial Districts (IDs) From the Marshall’s definition of the District ……... To the synthetic definition of Becattini (1990), “a social and territorial entity that is characterized by the active presence of both a community of people and a group of enterprises in a natural and historically determined area”

  5. Structure of Production in EU countries(values in %) See More: PierluigiBersani & Enrico Letta, Viaggionell’economiaitaliana, Saggine, Donzelli Ed. 2004

  6. The declineof large enterprises in Italy(% of employment in large enterprises) Source: Censimenti Istat

  7. The Industrial Districts (IDs) Industrial Districts in the Italian Economic Development (GiacomoBecattini ) Onekeyfeature of the Italian industrial system The industrial specialization of the Italianindustryisnotcentered on high technology and capital intensive industrial sectorsrather on sectors with high levels of know-how, design, “creativity” and low and medium technologicalcontent. e.g.furniture, shoes, leather, fur, jewelry, etc. In this way Italyfaces high competition from bothemergingmarkets and industrialisedcountries.

  8. The Industrial Districts (IDs) Industrial Districts in the Italian Economic Development (Il Sole 24 ore, 1992 ) • First mapping of the Italian Industrial Districts: • higher presence in the North, at an early stage of development in the South, only a few in the Centre of Italy • No sectorial analysis available. • Three types of prodution: • Personal Durable goods (related to “materie prime”) • Home Durable goods (home appliances and equipment) • Food Products and machineries related to food production

  9. The Industrial Districts (IDs) “Made in Italy” e distretti industriali(Becattini, 1998 ) • Itisananswer at the specialiseddemand • The production “Made in Italy” realized in the districts is of two types: the production of final consumer’s goods and the production of machinery and intermediate products connected to the realization of the final products.

  10. The Industrial Districts (IDs) • Territorial organisation and changes in the 1990s: • Industrial districts face the globalisation; what the effects? • Has Globalisation pushed towards a progressive de-localisation of production? • Three possible answers: • De-localisation of production towards low-cost markets • De-localisation of some stages of the production • Some of the more traditional districts become “tertiary districts” asprovide collateral services and perform supporting activities, while the production goes outside the borders of the country. • The geographic concentration of production remains important also in the 1990s despite the globalisation See More: Luigi Burroni Carlo Trigilia (2001), Local Production Systems in Europe: Rise or Demise?, Oxford University Press ,2001

  11. The Industrial Districts (IDs) Local Labor Systems (2001 Census) L’Istatreleased information on the Local LaborSystems that had been classified and defined thatnks to a methodology that measures the daily movement of people between the place of resience and one other specific place (data provided by the 14th Population Census). It has just been completed the 15th Census of the Industry, whose data have been just recently made available.

  12. Italian Districts’ regulation • Increasingrelevanceofeconomicterritorialanalysisbutnotof SME’s. • In Italy in 1991 wehave the recognitionof ID Article 36 Law 317. • 21 April 1993 therewasan executive decreedefining the variablesfor the identificationof the IDs. The law and the decree are based on the MarshalliandefinitionofIds. The identificationof the districtitisn’t a mechanicalprocess • Beforeof the contemporaryapplicationof the fivecriteriaitneeds the analysisof the regional and nationalterritory.

  13. The IDs in Italianlaw • Article 36 Law n. 317 1991. • April 1993executive decree law 317, identification of the districts: • Reference parameters for the Regions: • Istat Labour Local System: one or more in which there is verified contemporary: • An employment manufacturing index more then 30% of Italian one;

  14. The IDs in Italianlaw • Entrepreneurship rate in terms of Local Units more then Italian average; • Productive specialisation in a sector of activity in terms of employments respect to the employments in the total manufacturing sector more then 30% of the same Italian rate; • A level of employment in the manufacturing specialisation activity more then 30% of the manufacturing employment in the considered area; • A rate of employment in the SMEs in the specialisation area more then 50% of employment of all the enterprises in the considered area

  15. The IDs in Italianlaw The law “Norme in materia di attivitàproduttive” (Article 6.8) 1999 May 11 gets trough the 5 parameters to identify the IDs. The Regions could be define the local productive systems where is a relevant concentration of enterprises and IDs the local productive systems with high productive specialisation.

  16. The IDs in Italianlaw The Italian economist SylosLabini: Italy needs a reform of IDs. In 2005 he developed and published in the “Sole 24 Ore” newspaper a draft law.

  17. About the reform of the IDs and Draft Bill issued by CNEL in October 2004 Art. 1 The Reform of the system of industrial districts “Il sistemadeidistretti, disciplinatodallalegge del 1991, vieneriorganizzatoneimodi e nei termini stabilitinellapresentelegge. Le normesiapplicanoalleimpresecheoperanoneidistrettiesistenti. Possonoessereapplicate, previoparerefavorevoledell’organo di cui all’articolo 2, alleimpresechesicostituisconopressoidistrettinuovi e delleimpresecheoperanofuoridaidistretti, con particolareriguardoalleimpreseinserite in filiereproduttive”.

  18. Art. 2 The creation of a body for the coordination and management of the district “In seno a ognidistrettovieneistituito un organodistrettuale di coordinamento e di indirizzo, d’ora in poi definito “organodistrettuale”. Le modalità del funzionamento di tale organoverranno definite per mezzo di un protocollod’intesafra le partisociali – associazioni di industriali, artigiani e commercianti e sindacati – e le Regioni, cui spetta un ruolo di granderilievo. Il criteriofondamentale, non derogabile, è di utilizzarelavoratori o tecnicigiàoperanti in ciascundistretto o comandati da enti di ricerca e da Università, sulla base di rapportiindicatinell’articolo 6. L’organodistrettualepromuoveirapportidirettifra le imprese del distretto al livelloorizzontalenellefiliereproduttive e irapportiverticali, fra le imprese e glientichesioccupano di ricerca e di formazione e promuove, in ciascundistretto, la creazione di scuole e istitutiprofessionali e, d’intesa con le università, corsi di laurea e master post-laurea”.

  19. Art. 4 Mandate of the District “All’organodistrettualesonoattribuitecinquemansionifondamentali. Esecuzione per contodelleimprese di tuttigliadempimentiamministrativinecessari per l’avvio e l’attivitàdelleimprese, fornendoservizid’informazione e di consulenzalegale, amministrativa, tecnica, finanziaria e fiscale. Servizi di consulenza e di promozionedelleinnovazioniprovenienti dal sistemadellaricercapubblica. Promozionedeirapporti con l’Unioneeuropea. Sostegnoorganizzativo, anched’intesa con gliorgani di altridistretti o con organismieuropei, per progettiinnovativi di specialerilevanza. Infine, dovràcollaborare con le imprese e gliorgani del governocentrale per favorireglisbocchideiprodottilocalisianelmercatointernoed in quelliesteri.

  20. Art. 6 Applied Research “L’organodistrettualepromuoverà la riorganizzazione e lo sviluppodellaricercaapplicata, tenendocontodellavocazionedominante in ciascundistretto e promuovendo un centro di ricerca per la gestionedeilaboratori e per regolareirapportifrail Centro, di cui al primo comma, glialtriorganidistrettuali, glienti di ricerca, come l’ENEA e il CNR, le Università e icentri di ricerca e gliorganieuropei. L’organodistrettualefavorirà la collaborazione con gliorganiprofessionali, a cominciare con quellodegliingegneri”.

  21. Art. 9 Employment education and training "L’organodistrettualeèautorizzato a promuovere, d’intesacoisindacati, con gliindustriali e con le Regioni, ilrafforzamento e lo sviluppodellaformazione di lavoratori, anchespecializzati, e di amministratori. Puòinoltresostenereisindacatiqualoraintendesserorafforzareedintegrare, sulla base delleleggiesistenti, ilsistemadellaprotezionedeilavoratoricontrogliinfortuni”. Art. 10 Provision of ad-hoc Infrastructure “L’organodistrettuale, d’intesa con le Regioni e coiministericompetenti, prenderà le misureutili a facilitare la costruzione o l’ampliamentodelleinfrastruttureutili per idistretti”.

  22. Art. 11 Public Procurement “L’organodistrettualestudierà, insieme con le imprese, le modalitàadatte a evitarecateneeccessivamentelunghe e complicate di appalti e subappalti, cheaggravanoicosti e favorisconoillavoronero”. Art. 12 Energy “L’organodistrettualeindividuerà le formepiùadatte per rendereefficienteedeconomicol’approvvigionamentodell’energia per le imprese”.

  23. A policy for the industrial districts , isitfeasible? One may wonder whether and how is possible to recreate industrial districts in other areas, so that to export this “model” to other contexts. Is this a viable policy ? Although firms embedded in industrial districts (IDs) have demonstrated to perform better than others outside them, still the IDs are not an economic miracle. So far it has not been discovered a unique, well-defined and reproducible mechanism able to engender the IDs.. The law 317/91 set out various types of support for the IDs – for the most , it stays at the Regions the responsibility to provide such forms of support. In Italy there are a number of instruments and contributions given to small firms. This system has contributed to exacerbate the structural characteristic of the Italian industrial structure – that is its hig fragmentation. In this socio-economic context • local authorities play a fundamental role • a properly designed regulatory framework alone is not sufficient (Source: L.F. Signorini in Lo sviluppo locale, 2000)

  24. Local and Global Development RegionalEconomicPolicies 2014-15 • Industrial districts, innovation and I-district effect: territory or industrial specialization? Rafael Boix, 08.07, University of Barcelona, pp. 1-8 • BjørnAsheim Industrial districts as ‘learning regions’. A condition for prosperity? R03 1995 • IL DISTRETTO INDUSTRIALE MARSHALLIANO COME CONCETTO SOCIO-ECONOMICO, Giacomo Becattini, in Stati & Informazioni, Rivista Trimestrale sul Governo dell’Economia, 1991 • (in alternativa al 3) BECATTINI, G. (2001) The caterpillar and the butterfly. An exemplary case of development in the Italy of the industrial districts. Firenze: Felice Le Monnier. • Brasili C. Fanfani F., 2005, AgrifoodDistricts: Theory and Evidence in De Norhonhaet altri eds. The newEuropeanruralityStrategyforsmallfirms. Ashgate

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