Get documents about "The Role of Clusters in Local Economic and Social Development the
Document Sample
The Role of industrial clusters
in Local Economic and
+Social Development:
the Italian Experience
Some issues from the Marche
Fabrizio Costa, Director Industry, Handicraft and
Energy, The Marche Regional Administration
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 1
Summary
The Marche Region development is often
considered as a typical Italian “cluster
driven” experience
The “cluster development path”: main
elements and a focus on the Marche Region
“model”
What kind of “knowledge” and “warning”
may come from this experience?
May a cluster be exported to other areas?
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 2
Framework of this presentation
1. A BRIEF PORTRAIT OF A SMALL BUT STRATEGIC
REGION
2. THE MARCHE ECONOMY TODAY: STRUCTURE AND
COMPARISON
3. FIRMS AND CLUSTERS IN THE MARCHE REGION’S
DEVELOPMENT
4. AN OPEN ECONOMY: EXPORT AND FOREIGN
INVESTMENTS AS A RESULT OF CLUSTERS
5. “PORTABILITY” OF THE CLUSTER DEVELOPMENT PATH
6. AN EXAMPLE OF COOPERATION: Projects in course
in Brazil
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 3
1. A BRIEF PORTRAIT OF A SMALL BUT
STRATEGIC REGION
• In Central Italy
• On the Adriatic Sea
• A gate to South and
Eastern Europe
• An ancient link to
Mediterranean Sea
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 4
1.1 The Marche Region: a few data
Area: 9,700 km2
Population: 1.48 million
Capital town: Ancona
(~100,000 inhabitants)
4 Provinces
(Pesaro e Urbino,
Ancona, Macerata,
Ascoli Piceno)
246 Municipalities
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 5
1.2 The Marche Region: the present
situation
Regional GDP: US$ 40 billion
GDP per person : US$ 27,200
Life expectancy at birth: 81 years
(male: 78 – female: 84, the higher in Italy)
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 6
2. THE MARCHE REGIONAL ECONOMY
TODAY
Low agriculture
employment rate
and GDP share
Competitive
manufacturing
industries’ sector
(the regional rate is
higher than the
national one)
Extensive services
and trade share
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 7
2.2 A Region focused on Europe
EU 25
Source: European
Commission (2004),
Third Report on
Economic and
Social Cohesion
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 8
2.3 Welfare and economic performance
The Welfare index rank performs better than the economic index rank!
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 9
3. FIRMS AND CLUSTERS IN THE MARCHE
REGION’S DEVELOPMENT MODEL
.
As shown in the previous slides, TODAY the
Marche may be considered as a developed
and rather well balanced Italian area, with a
good population welfare.
But UP TO WW2, the situation was very, very
different:
The Region was one among the least developed
areas in Italy
Underfeeding caused infant mortality
Thousand of young people emigrated to Latin
America’s pampas and North Europe’ mines.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 10
3.1 Which reason for such a change?
Basically, two main reasons have been singled out
to explain this development path:
1. an original blending of creativity and entrepreneurial skill,
often provided by the “share-cropper” (métayer or
mezzadro) who firstly transformed himself into a
craftsman and later into a small business-man, thanks to
community values focused on
• aid exchange among families
• emphasis on savings and on hard work
2. many diffused local systems of Small and Medium
Enterprises (SMEs) : the “clusters” or “industrial/productive
districts”
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 11
3.2 The first character:
a very “entrepreneurial” region
Number of Firms (December 2005) : 175,413
(+1.06% vs. 2004)
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 12
3.3 COERENCE OF REGIONAL PLANNING TO SUPPORT SMEs:
the Three Year “Productive Activities” Regional Plan
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 13
3.4 the Three Year “Productive
Activities” Regional Plan
the Three Year “Productive Activities” Regional Plan
The Plan, moving from an assessment of the local development perspectives (and
difficulties) and the consequent analysis of enterprises’ need, is centred on
identifying:
Same strategic objectives of the regional policy, to be addresses by all specific
measures:
Productive system competitiveness
Sustainable development
Local GNP increase
Stable and better quality of job
As well as same specific objectives which represent the relevant factors for local
competitiveness
Productive development
R&D, quality and innovation
Environmental innovation, energy saving, energy ef f iciency and renewable energy
Promotion of local production, internationalization and external investment attraction
SME Financial equilibrium and innovative f inance
Better relation with PA, simplif ication, liberalization and “one store shop”
An finally, operational objectives, both to better assess the SME support instruments
efficiency and to facilitate the establishment of “relations” among companies (in
particular policy related to productive clusters, networks and chain in connection with
the new strategy adopted by the central government)
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 14
3.3 The “share-crop” or mezzadria:
why is it so important in regional history?
The “share-crop” (métayage or mezzadria) is a job contract
between the land owner and the head of a family (often a large
family) providing the labour. All the products coming from the
labour had to be shared on a fifty-fifty basis between the two
“partners”
The farmer house was on the land property (not in the village)
and it was provided with a stable, a small machinery and a
joinery shop
As a result, in order to increase his own “half gain” from
agriculture and other rural activities, the farmer was
stimulated to improve the yield
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 15
3.4 The second character: the “cluster”
of SMEs
The “cluster” (or industrial district) is an area where the
“scale economies” (typical of bigger industries) are efficiently
replaced by “external economies”
Costs are cut down, thanks to a peculiar social and
economical situation (such as workers availability, context
knowledge, a diffuse entrepreneurship, frequent spin off,
enhanced competition but also co-operation among firms,
wide process innovation, wide imitation and emulation
effects)
This way of production allows to make up for vertical
integration of bigger industries keeping safe the quality of life
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 16
3.5 The “cluster” impact
A cluster involves a distribution of production phases among
many firms, highly specialized in every step
The firm specialization is usually linked to either a
technological or an operating area
Many industries are traditional and not hi-tech: this situation
involves low entrance barriers, due to low plant costs
The innovation jump is often allowed by a plant renewal
The firm dimension remains small, but the high specialization
allows good earnings
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 17
3.5 The “cluster” impact
The rationale behind the rapid growth of the districts is that of
bottom-up development logic, which constitutes the strategic
component of this quality improvement: local environment greatly
facilitated the possibility of establishing new enterprises, business
ideas which have over the years contributed to the success of the
Region, generating a virtual multiplier effect, which in turn has
broadened the district development system.
Moreover, companies in the districts may remain small as the
environment provides the various resources, competences and
services needed. While entrepreneurs only had to concentrate on
their “core business”, being small (but often thinking great) for many
years necessitated only a limited working capital while the income
produced generated extra welfare. In the end, the many criticisms
raised on the small business attitude of Italian enterprises
underestimated this important feature: the industrial district is
basically a nursery which not only feeds the companies in respect of
their business needs but also constitutes a laboratory (the right or
“enabling” environment….) for testing new schemes of social
cohesion as well as innovative ideas in terms of labour organization
especially with reference to succeeding generations.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 18
3.7 Cluster and development routes:
a “valley” model ?
• URBINO
The
Comb • CIVITANOVA
• FABRIANO MARCHE
Wood - Furniture • S.BENEDETTO
DEL TRONTO
Mechanics
Footwear - Clothing
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 19
3.8 Main clusters in the Marche Region
Local Economic Systems
Mechanics
Footwear and leather
Wood-furniture
Textile-clothing
Food-processing
Others (electronics, plastics,PL VI, Policies for
KEF VII,
etc.)
Fabriano, 180608 Regional Innovation 20
4. AN OPEN ECONOMY: EXPORT AND
FOREIGN
INVESTMENTS AS A RESULT OF CLUSTERS
An open economy is a policy target for a Region
focused on high production clusters
The Marche economy is today very open, thanks to
her manufacturing industries mostly involved in the
“made in Italy” production
An open economy may be a great opportunity, but it
may also be a risk, if there isn’t a “control” on the
foreign capital used in the national territory
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 21
4.1 Foreign Direct Investment in regional
development path
In 60’s and 70’s, many firms came and settled in the Marche
Region from other Italian regions or foreign countries, because
of low labor costs
The know-how acquired over time, the capability to set out small
but incremental innovation, the relationship among local
businesses (clusters) made a real new “model”, often named
with the region’s name: “the Marche Region model”
In 90’s many regional firms began participating in foreign
businesses, most of all in their own manufacturing sectors, such
as metal-mechanics industry, agricultural and industrial
machinery, clothing and footwear, electrical material and
supplies
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 22
5. “PORTABILITY” OF THE CLUSTER
DEVELOPMENT PATH
The Marche Region development path, in the last 60
years, appears to show some similarities with the
present situation of many other geographical areas:
A post-war situation
Rural territory
Large labor forces percentage in the agricultural sector
Manufacturing and “hand labor” capability
BUT
What kind of “knowledge” and “warning” may come
from this regional experience?
May a cluster be “exported” to other areas?
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 23
5.1 Some policy remarks (1, specific and,
may be, exclusive, features)
The cluster is mainly based on a cultural
approach:
creativity and entrepreneurship are the ground
skills for the spin-off
imitation and emulation effects push the
newcomers
competition & cooperation allow distribution of
production phases among many firms
traditional and not hi-tech industries involve low
entrance barriers
high specialization in each production step needs
a low plant cost
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 24
5.2 Some policy remarks (2, a case of
public-private partnership!)
The cluster is an endogenous and self-governing phenomenon:
the public role is rarely a decisive start-up factor
Nevertheless, the policy maker may offer a strong support to
strengthen the external economies (the core of a cluster!)
External economies change continuously: establishment areas,
basic services, workers availability and suitable education,
material and immaterial infrastructures, quality and
environment certificates…
As the cluster grows, the governance becomes more and more
relevant: in the Marche Region the “Technological Center
System” as well as the “District Council” are composed by all
local stakeholders (such as representatives of Public Boards
and social and economic actors)
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 25
5.3 May an Italian-type industrial cluster
be “exported” to other areas?
Not likely!
The cultural effects are strong: no public policy is able to change it in
a short period
A cluster is a typical local and bottom-up phenomenon
The production sharing in many specialized steps depends on local
needs
Probably some policies!
While we believe it is unlikely to “export” a cluster based on Marche
Region experience we had several positive experiences in helping
partner regions to build up industrial policy program, focused on
qualified clusters of Micro, Small and Medium enterprises (SMEs) and
based on the transfer of knowledge and associated policies, related to
technological services
The basic presumption is that, if the economic environment presents
clusters of SMEs, organized to produce goods or services to be
marketed outside the “district”, it is feasible to generate or accelerate
the creation of externalities essential to the productivity or the value
aggregation process – method on which Marche has an extensive
experiencel.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 26
5.3 A case of industrial cluster policy to
be “exported” to other areas
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 27
A case of industrial cluster policy to
be “exported” to other areas
•The strategic repositioning of the Centres really took
place in light of backdrop changes in the last few
years (globalization and growing integration of
technological innovation processes; the development
of the immaterial economy and of ICT services etc.).
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 28
An open economy: export and foreign
investments as a result of clusters
•An open economy is a policy target for a Region
focused on high production clusters
•The Marche economy is today very open, thanks to its
manufacturing industries mostly involved in “Made in
Italy” production
•An open economy may offer great opportunity, but it
may also hold a risk, if there isn’t “control” on the
foreign capital used in the national territory
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 29
From “General Services”
to “Technology Transfer”
Market transformation resulting from globalization.
Move from local development of a defined
territorial area to trans-local development in order
to consolidate or create new conditions of
competitiveness .
Move from an inward looking production and
added value chain network to an outward looking
network.
The Region of Marche and the “Technological
Centre System”.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 30
The Rational
The “Technological Centre System” intervenes to:
analyse needs
propose solutions
in complex socio-economic situations, which
present difficulties in the development of local
industries with otherwise strong potential for
growth at a national and international level linked
to the locally available resources.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 31
An External Economy
The role of the “Technological Centre System” in
the development of local industry:
to be an operative local point of reference;
Facilitate the process of internationalisation of firms;
Offer firms experience and advanced competence.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 32
The Methodology
The “Technological Centre System” is actively
involved in:
coordinated processes for broaching
entrepreneurial and managerial development in
firms.
development of new products/processes through
investment in technology, quality,
organisation/management, design, and human
resources.
development and organisation of permanent
specialized structures aimed at offering firms
continuity, stability and adaptability for initiatives of
economic and local industrial development
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 33
Example of Cooperation:
Projects in course in Brazil
Quality, technological innovation, specialized
training, design for the Amazonian wood-
furniture industry
Research, technological innovation, quality and
specialized training for the mechanic industry in
the state of Sao Paolo
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 34
Projects in course in Brazil
These projects were founded in an environment of
initiative and collaboration between the Brazilian
government and the four regions of Central Italy:
Emilia Romagna, Marche, Tuscany, and Umbria.
The initiative provides for social and economic
cooperation aimed at transferring new models of
local development.
The Marche Region has launched under different
national laws of cooperation (L. 212/92, L. 84/01, UE
interregional Programme such as Interregg, TACIS
IBPP etc.) several projects of cooperation and
technical assistance with emerging and former
command economies in Europe, North Africa and
South America based on the transfer of some of the
“tools” of industrial policy relative to the regional
productive clusters (industrial district) experience.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 35
Context of the project
A complex socio-economic situation with relative
difficulty for the development of local industry due
to various factors:
cultural
technological
infrastructure
financing
logistic
with otherwise strong potential for growth at a
national and international level linked to the
availability of an immense natural resource.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 36
Strategy
Increase the added value chain for local SMEs
production within an environmentally sustainable
situation, extending it to include the
transformation phase, both of semi-manufactured
products destined for a world scale market as well
as final product, destined primarily for the Brazilian
market and more generally the Central and South
American market.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 37
Guiding policies
Promote and sustain development
(technological, productive, commercial,
organisational-managerial) of the wood-
furniture firms in the Amazonian region,
considering however the differentiation and
specific conditions of departure relative to the
area of Manaus in respect to that of Belém.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 38
Guiding policies
Undertake interventions of a structural nature to
activate and reinforce the endogenous factors
of development to ensure continuity of the
processes of economic, cultural and social
growth apart from completion of the
intervention;
Involve all significant elements of the socio-
economic and institutional systems on the basis
of sharing objectives and strategies for the
attainment thereof within a vision of the
medium long-term evolution of the territory
itself.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 39
Line of Action
Coordinated processes for broaching
entrepreneurial and managerial development
in the wood-furniture sector;
Differentiate the actions in Manaus (where
fundamentally the objective is to create a local
industry for semi-manufactured goods) and
Belém (where fundamentally the objective is to
reinforce the local furniture industry), within a
commodity chain starting with the Amazonian
resource wood and including machinery
producers and working systems in the area of
Sao Paolo;
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 40
Line of Action
Construct permanent structures for specialised
services (Technological Centres for Quality and
Innovation), differentiated for the areas of
Manaus and Belém, to provide continuity,
stability and adaptability for initiatives and to
support economic development and local
industry.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 41
Project proposals
Composed of a set of project lines, each
interrelated and synergetic in a system logic;
these lines are:
Technology
Quality
Organization/company management
Human Resources
Design
Entrepreneurship
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 42
Project proposals
Alongside a project line dedicated to:
Social situation/Sustainability.
Each project line is in turn divided into a series of
actions that, distributed in various ways, over time
culminate in the realisation of permanent
structures (Technological Centres for Quality and
Innovation) dedicated to giving continuity to the
actions for sustaining development of the wood
furniture production systems in the Amazon.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 43
Direct and Indirect Beneficiaries
Time Planning
Local Entrepreneurial System with particular
reference to small businesses in the Amazon
wood-furniture commodity chain
Local Public Administration
Education System at high school and university
level
Small businesses in the Italian wood-furniture
commodity chain
The duration of the project is 48 months.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 44
Research, technological
innovation, quality and
specialized training for the
mechanic industry in the state of
Sao Paolo
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 45
Context of the project
An interesting process guided by a few leading
companies (international brands) in the
automotive and electrical domestic appliance
sectors, who serve as the motor in the local
production system inducing technologically
complex production processes.
The demand for parts and components, often not
met by the businesses in the local territorial
system, is addressed elsewhere (foreign suppliers).
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 46
Context of the project
The need to project local mechanic businesses
into long relational networks (trans-local
cooperation) in order to extend the production
and added value chains so as to face the new
conditions imposed by the international market.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 47
Strategy
Increase the local added value production chain,
in part through the creation of stable relationships
of collaboration with Italian companies, within a
situation of environmental sustainability in order to
increase the critical volumes in terms of turnover,
production specialization and organisational and
managerial attention, capable of projecting the
firms into the most ample and ambitious markets
directly or indirectly (the large production
companies for goods destined to the market)
present in Sao Paolo or other states in Latin
America.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 48
Guiding policies
Promote and sustain development
(technological, productive, commercial,
organisational-managerial) of business in the
(extended) mechanic sector in the State of Sao
Paolo.
Undertake structural interventions to activate
and reinforce the endogenous factors of
development so as to ensure continuity of the
processes of economic, cultural and social
growth apart from completion of the
intervention.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 49
Guiding policies
Involve all significant elements of the socio-
economic and institutional systems on the basis
of sharing objectives and strategies for the
attainment thereof within a vision of the
medium long-term evolution of the territory
itself.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 50
Line of Action
Coordinated processes for broaching
entrepreneurial and managerial development in
the enlarged mechanic sector aimed at three
principal categories (integrated businesses,
specialized businesses, small and medium
businesses with a technological base), acting
primarily with specific initiatives.
Construct permanent structures for specialised
services (Technological Centres for Quality and
Innovation), capable of translating basic
research into applied research and pre-
competitive development,
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 51
Line of Action
supplying rapid and efficient innovative service
on specific themes and technology in order to
guarantee effective initiative to support
economic development and local industry.
The Centre operates as a technological
translator on a twofold level and between
different actors: between the large specialised
companies with heavy technological needs
and the embedded network of autogenous or
localised foreign small and medium sized
businesses; between the basic research
undertaken in universities and the technological
requirements expressed by the firms.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 52
Project proposals
The areas for intervention:
Technological innovation, Engineering and
Design
Research and development
Quality
Organization/company management
Human Resources
Internationalisation
Social Situation/environmental sustainability
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 53
Project proposals
The centre is to serve as a referent for rapid and
cost effective responses based on the following
factors:
possibility of rapidly and efficiently drawing on
basic research sources
possibility of utilising instrumentation and
laboratory equipment already present in the
territory
possibility of acquiring instrumentation that is
either inadequate or not present in the territory
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 54
Project proposals
presence of highly capable technological staff
capable of elaborating technical responses
immediately utilisable
relational capacity with local/national
institutions aimed at promoting specific
programs of intervention for sustaining the
diffusion of research and technological
innovation in the small and medium businesses
of the state
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 55
Direct and Indirect Beneficiaries
Time Planning
Small, medium and large mechanic businesses
in the State of Sao Paolo
Local Public Administration
Local system of research, technological
development and specialized training
Small and medium sized Italian businesses of the
sub-supply chain in mechanics; electrics and
electronics; instrumental machinery; moulds
and pressing; agricultural machinery; lighting
technology; industrial fridges etc.
The duration of the project is 30 months.
KEF VII, PL VI, Policies for
Fabriano, 180608 Regional Innovation 56
