the evolution of italian industrial districts: challenges and perspectives
TRANSCRIPT
Els clústers industrials italià: reptes i perspectives de futur
I Workshop d’Economia Valenciana Universitat Politècnica de València
4/11/16
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
Agenda
• The (persistent) relevance of IDs for the Italian economy • The key transformations that affected IDs in the last 15-20
years and how they affected the Marshallian configuration • Interpreting the change: key trajectories of ID evolution in
Global Value Chains • The determinants of trajectories of ID resilience in the global
economy
I Workshop de la Economia Valenciana 4/11/16 Valentina De Marchi
The Italian anomaly of the ‘70s and ‘80s
• Traditional sectors • Low technological content • Small or micro enterprises
BUT • High growth rates • Leadership in international
markets • Flexibility, innovation,
customization
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
(Marshallian) industrial districts: backbone of the Italian economy (1)
Industrial districts
• A population of firms (mostly SMEs) • Specialization in a specific business field
• Limited territorial area • Division of labour and inter-organizational
relationships
(Marshallian) Industrial districts
• Interpenetration between production and social structures
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
(Marshallian) industrial districts: firms and employment growth (2)
Source: Elaboration on ISTAT CENSUS data
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
0 200 400 600 800
1000 1200 1400 1600 1800
1961 1971 1981 1991 2001
Local firms (bars, left axis) and employees (lines, right axis) in the gold jewellery IDs
AREZZO ALESSANDRIA VICENZA
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
(Marshallian) industrial districts: innovation (3)
I Workshop de la Economia Valenciana 4/11/16 Valentina De Marchi
1970 (Tecnica) 1974 (SIDI) ‘70 (Alpinestar)
1982 (Roces) 1982 (Lotto)
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
A persistent relevance for the Italian economy…
Source: Intesa San Paolo (2015). 2014 data Source: ISTAT Census 2011. 2011 Data
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
…But under different premises
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
0 200 400 600 800
1000 1200 1400 1600 1800
1961 1971 1981 1991 2001 2011
Local firms (bars, left axis) and employees (lines, right axis) in the gold jewellery IDs
AREZZO ALESSANDRIA VICENZA
Source: Elaboration on ISTAT CENSUS data See also: De Marchi, Gereffi, Lee (2014), European Planning Studies
Local clusters in global chains: understanding the key
transformations at stake
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
IDs at the globalization challenge: why the Marshallian configuration is fading out
MARSHALLIAN IDs
Interpenetration between
PRODUCTION and SOCIAL structures
a) LARGER FIRMS EMERGING (higher concentration)
b) DECREASING NUMBER OF FIRMS AND EMPLOYEES (reduction in the ID population)
Exte
rnal
Inte
rnal
1. Global competition of intermediate and final goods & international organization of productive activities
2. Rising importance of global lead firms and concentration of distribution activities
3. Increasing presence of immigrant entrepreneurs and workers
4. Local entrepreneurship shortage
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
1. Global competition of intermediate and final goods & riorganization of productive
activities at the global level (1)
Source: OSEM (2008). Survey data
Share of firms of the Montebelluna ID that have delocalized production activities, by size class
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
2. Rising importance of global lead firms and concentration of distribution activities
• Global lead firms focusing on higher value-added activities (mostly retailing) orchestrating production across global chains: ! IKEA – With 31.9 billion sales in 2015 (+114.1% as of 2005) is by far the largest
furniture retailer worldwide. Its home-furnishing articles are realized mostly by 978 suppliers (subcontractors) based in 50 countries (just 13% of employees working in production units).
! Wal-mart, Nike, Apple, LVMH,….
• Estimates suggest that now 80% of world trade depend on such global chains (UNCTAD, WIR 2013) • Increasing relevance of groups and medium/large sized
companies within the IDs
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
Prato Textile
Bassano Furniture
Belluno Eyewear
Montebelluna Sportsystem
The fading out of the Marshallian model: an increasing heterogeneity across and within IDs
Source: Intesa San Paolo (2015) “Economia e Finanza dei distretti industriali”. Note: size of the circles indicate firms’ turnover in 2014
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
The fading out of the Marshallian model: an increasing heterogeneity across and within IDs (2)
Bassano Furniture
Livenza Furniture
Source: Intesa San Paolo (2015) “Economia e Finanza dei distretti industriali”. Note: size of the circles indicate firms’ turnover in 2014
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
Is there still a ‘ID effect’ or which IDs are still characterized by a ID effect?
Turnover variation (median values)
International competitiveness and innovation (2014)
Share of Exporters
Patents every 100 firms
Source: Intesa San Paolo (2015) “Economia e Finanza dei distretti industriali”. Note: median values reported
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
2. R
educ
tion
in th
e ID
po
pulat
ion
High Decline Hierarchization
Low
Reproducing ID
1. Concentration at firm level
Low Med/High
MARSHALLIAN
Out of the Marshallian configuration: is it possible to identify trajectories?
See also: De Marchi and Grandinetti (2012), Studi Organizzativi; De Marchi and Grandinetti (2014), Competition & Change
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
High
Low/null
Low/null High
Is it possible to identify trajectories? An application to the Veneto region
Decline
Source: Our elaboration based on Movimprese and AIDA data
FOOTWEAR
MARBLE
SPORTSYSTEM LEATHER
GLASS FURNITURE (TV)
CERAMICS FURNITURE (VR)
JEWELLERY
EYEWEAR
0%
10%
20%
30%
40%
50%
60%
0 500 1,000 1,500 2,000 2,500 3,000
Hierarchization
Reproducing ID 2. R
educ
tion
in th
e ID
pop
ulat
ion
(num
ber o
f firm
s, 20
04-2
014)
1. Concentration (turnover, HH index on 2014 data)
-
-
-
-
-
-
Investigating the determinants of the trajectories: lessons from
selected Veneto IDs
I Workshop de la Economia Valenciana 4/11/16 Valentina De Marchi
Footwear (Riviera del
Brenta)
Eyewear (Belluno)
Sport System (Montebelluna)
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
The Belluno eyewear: few home-grown global lead firms driving to hierarchization
Belluno
eyewear Var firms 04-14 -49.8% Var. employment 04-14 28.0% Turnover by top firm 46.9%
Activities mostly performed locally
Pre-production, production & post
production activities
Upgrading trajectories Vertical Integration, control of retailing
activities
Key local companies Global leaders (Luxottica, Safilo)
Global lead firms Homegrown
Firms Incidence on ID turnover
Large (turnover >50mil) 7 97.5%
Medium (10-50mil) 6 0.7%
Small (<10 mil.) 81 1.8%
Source: Own elaboration on AIDA data. Note: data refer to 2012 and to limited liability companies only.
ID composition, by size
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
The Montebelluna sportsystem: evolution via diversification, innovation, branding (1)
Belluno eyewear Montebelluna Sportsystem
Var firms 04-14 -49.8% -12.6% Turnover by top firm 46.9% 27.9%
Activities mostly performed locally
Pre-production, production & post
production activities
Pre-production (some post-production)
Upgrading trajectories Vertical Integration, control of retailing
activities
Product diversification, internationalization of
sourcing, branding (OBM)
Key local companies Global leaders (Luxottica, Safilo)
Internationally recognized OBMs; global leaders (Geox); suppliers of
services, machineries
Global lead firms Homegrown Homegrown and foreign
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
The Montebelluna sportsystem: diversification (2)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
1985
19
86
1987
19
88
1989
19
90
1991
19
92
1993
19
94
1995
19
96
1997
19
98
1999
20
00
2001
20
02
2003
20
04
2005
20
08
Winter shoes Technical shoes Other (shoes+clothing)
Source: Own elaboration on OSEM data
Apre-ski boots, trekking shoes, ski boots,…
Football, tennis, moto shoes, rollerblades,…
ID turnover by market segment, ‘85-’08
City shoes, clothing
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
The Montebelluna sportsystem: key actors of the change (3)
A number of capable OBM renowned on global markets (niche), developing global supply chains and retaining selective relationship
with other ID firms
KIBS or other specialized suppliers, relying on the ID as context for sperimentation but working mostly for global firms
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
The Riviera del Brenta footwear: evolving by manufacturing for global brands (1)
Belluno
eyewear Montebelluna Sportsystem
Riviera del Brenta footwear
Var. firms 04-14 -49.8% -12.6% -2.4% Turnover by top firm 46.9% 27.9% 21.2%
Activities mostly performed locally
Pre-production, production & post
production activities
Pre-production (some post-production) Production
Upgrading trajectories
Vertical Integration, control of retailing
activities
Product diversification, internationalization of
sourcing, branding (OBM)
From OBM to OEM (producing
for global brands)
Key local companies Global leaders (Luxottica, Safilo
Internationally recognized OBMs; global leaders (Geox); suppliers of
services, machineries
Capable OEMs
Global lead firms Homegrown Homegrown and foreign Foreign
Source: De Marchi, Gereffi, Grandinetti (2017) Routledge
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
The Riviera del Brenta footwear: manufactu- ring capabilities attracting global brands (2)
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
What the key determinants of the different ability to find a suitable position in the new
global context?
Decline Hierarchization Reproducing
Glob
al le
ad fi
rms
Homegrown (inside-out) Present Present
Foreign (outside-in)
Loca
l dy
nam
ic a
ctor
s
Capable OEMs (manufacturing cap.)
Present (variety)
Highly-specialized suppliers (specialized
manuf. cap.) Capable OBM (post-
production capab.)
Capable local institutions
Trajectories of evolution in Italian IDs: what lessons for local development?
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
ID reproducing (on different premises) in global markets: getting back to the firm
• Italian ID transforming out of the Marshallian model: ! Shrinking population & local relational fabric ! Increasing importance of larger firms
• Globalization spurring increasing heterogeneity across (and within) IDs: ! Decline, hierarchization, reproducing trajectories
• Moving the focus from the system to (key) firms: ! Global lead firms ! (Variety of) local dynamic actors
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
Local clusters in global chains: still a role for (manufacturing) SMEs?
• Variety of (dynamic) SMEs necessary for ID resilience ! Integrating local and global knowledge & supporting
(selective) local relationships ! Beyond the (solo) ‘local lead firm’
• Finding a suitable position in GVC via different roles, depending on key assets (manufacturing – OEM; branding & retailing – OBM; innovation - specialized suppliers)
• Back to manufacturing (again)? ! Innovation-production nexus ! Anchor for global lead firm presence ! Diversification and new markets development
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
Evolving evolutionary trajectories: what roles for policy making?
• Different trajectories, which may evolve over time ! tailored policies supporting the achievement of thriving trajectories ! Role of (entrepreneurial) district institutions
• Vulnerable actors ! enabling consolidation (e.g., via network contracts)
• Global knowledge integration (vs. over-embeddedness) ! supporting integration with ‘beneficial’ global actors
• Supporting reproducibility of key assets attracting (local and foreign) companies ! Maintaining (e.g., ‘make’ skills training) ! Communicating & nurturing (e.g., context for global awareness & trust
recreation
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
Veneto region and Comunitat Valenciana: space for comparison?
• Several commonalities opening up space for experiences exchange: ! Manufacturing and ID relevance ! Embedding in Global Value Chains ! Entrepreneurship (in diversified sectors) ! Innovation capabilities ! Reproducing IDs and local dynamic actors
I Workshop d’economia Valenciana 4/11/16 Valentina De Marchi
References
• De Marchi, V., Grandinetti R. (2012). "Dove stanno andando i distretti industriali? Un tentativo di risposta a partire da un'indagine in Veneto", Studi Organizzativi, 2, 142-175
• De Marchi V., Lee J., Gereffi G. (2014), "Globalization, Recession and the internationalization of industrial districts: evidence from the Italian gold jewellery industry", European Planning Studies, 22(4): 866-884.
• De Marchi, V., & Grandinetti, R. (2014). “Industrial Districts and the Collapse of the Marshallian Model: Looking at the Italian Experience”. Competition & Change, 18(1): 70-87.
• De Marchi V., Grandinetti R. (2016) “Lo Sportsystem di Montebelluna: il distretto dalle sette vite”, Economia e Società Regionale, 34(1)
• De Marchi V., Gereffi G., Grandinetti R (2017) “Describing the change: evolutionary trajectories of industrial districts in global value chains”, in De Marchi V., Di Maria E., Gereffi G. (eds) “Local clusters in Global Value Chains: linking actors and territories through manufacturing and innovation”, Routledge
• Intesa San Paolo (2015) “Economia e Finanza dei distretti industriali” • OSEM (2008) “Rapporto OSEM 2008 e previsioni 2009” • UNCTAD (2013) “World Investment Report 2013. Global value chains: investment and trade
for development”