Budapest, 24th March 2004

Paola MaccaniPaola MaccaniHeadHeadLocal Development Initiatives Local Development Initiatives

INNOVATION IN TRADITIONAL INDUSTRIES AND LOCAL DEVELOPMENTINNOVATION IN TRADITIONAL INDUSTRIES AND LOCAL DEVELOPMENT

Emilia-Romagna. Some IndicatorsEmilia-Romagna. Some Indicators

20022002• PopulationPopulation 4.059.4164.059.416

• Total labour forceTotal labour force 53,4%53,4%

• Total unemployment rateTotal unemployment rate 3,3%3,3%

• Female labour forceFemale labour force 42,9%42,9%

• Female unemployment rateFemale unemployment rate 5,3%5,3%

• GDP per head (€)GDP per head (€) 30.03830.038

• Employees in theEmployees in themanufacturing industry manufacturing industry 645,648 645,648

• Manufacturing local unitsManufacturing local units 94.817 94.817

• Manufacturing av. sizeManufacturing av. size 6,86,8

• Firms with less than 50 empl.Firms with less than 50 empl. 59,8% (1996) 59,8% (1996)

Emilia Romagna positioningEmilia Romagna positioning

Source: Eurostat Archivio RegioSource: Eurostat Archivio Regio

European regions ranked for GDP per-head decreasing (class. Nuts 1) 2000European regions ranked for GDP per-head decreasing (class. Nuts 1) 2000

GDPGDP(Meuro)(Meuro)

GDPGDPper headper head Europe=100Europe=100

11 Bruxelles-capital Region Bruxelles-capital Region 47.233,9047.233,90 49.331,8049.331,80 218,5218,5

22 LuxembourgLuxembourg 19.317,5019.317,50 43.803,9043.803,90 194,00194,00

33 HamburgHamburg 69.443,1069.443,10 40.737,30 40.737,30 180,4180,4

44 Ile de FranceIle de France 391.147,40391.147,40 35.509,0035.509,00 157,3157,3

55 LondonLondon 241.309,50241.309,50 32.982,6032.982,60 146,1146,1

66 BremenBremen 21,144,0021,144,00 31.718,4031.718,40 140,5140,5

77 AlandAland 810,33810,33 31.507,7031.507,70 139,6139,6

88 LombardiaLombardia 282.097,90282.097,90 31.118,3031.118,30 137,8137,8

99 Emilia-RomagnaEmilia-Romagna 119.506,10119.506,10 30.038,5030.038,50 133,1133,1

1010 HessenHessen 175.378,80175.378,80 28.981,6028.981,60 128,4128,4

Productive systems well consolidated, dynamic and Productive systems well consolidated, dynamic and renowned at international level (mechanical engineering, renowned at international level (mechanical engineering, packaging …) (ER)packaging …) (ER)

Territorial specialization of the work force( ER)Territorial specialization of the work force( ER) Significant presence of well equipped business parks in a Significant presence of well equipped business parks in a

growing phase (EA)growing phase (EA) Presence of Universities, Research and Innovation Centres Presence of Universities, Research and Innovation Centres

(ER)(ER) Variety of environmental resources and presence of several Variety of environmental resources and presence of several

natural areas (MA)natural areas (MA) Centres of tourist attraction with a growing potential (ER, Centres of tourist attraction with a growing potential (ER,

cities, EA, coast; MA (sport …)cities, EA, coast; MA (sport …) Widespread presence of primary as well as of minor historic Widespread presence of primary as well as of minor historic

and cultural assets (ER, MA, EA) and cultural assets (ER, MA, EA)

StrengthsStrengths

ER = Emilia RoadER = Emilia Road MA = Mountain AreaMA = Mountain Area EA = Eastern AreaEA = Eastern Area

Challenging AspectsChallenging Aspects Enhancement of brain circulationEnhancement of brain circulation Saturation of industrial areas (ER)Saturation of industrial areas (ER) Links between companies and Research System (EA, MA)Links between companies and Research System (EA, MA) Sustainability of mature products exposed to globalisation and Sustainability of mature products exposed to globalisation and

competition (ER)competition (ER) Local productive system not much related to large companies Local productive system not much related to large companies

(EA, MA)(EA, MA) Limited diffusion of “networks of companies” (EA, MA)Limited diffusion of “networks of companies” (EA, MA) Inadequate integration of the tourism industry among the coast, Inadequate integration of the tourism industry among the coast,

the art cities and the mountain eastern areas (EA, MA)the art cities and the mountain eastern areas (EA, MA) Critical environmental situation mainly in areas where the Critical environmental situation mainly in areas where the

chemical industry is located (ER, EA)chemical industry is located (ER, EA) Zones characterized by a strong hydro-geologic instability (MA)Zones characterized by a strong hydro-geologic instability (MA) Difficulties to have access to services (public, business, etc.) Difficulties to have access to services (public, business, etc.)

(MA)(MA) Depopulation, ageing population (MA)Depopulation, ageing population (MA) Entrepreneurial fabric with elements of fragility (EA, MA)Entrepreneurial fabric with elements of fragility (EA, MA)

ER = Emilia RoadER = Emilia Road MA = Mountain AreaMA = Mountain Area EA = Eastern AreaEA = Eastern Area

a) PARTICULAR POLITICAL AND INSTITUTIONAL SETTINGPARTICULAR POLITICAL AND INSTITUTIONAL SETTING:Regional governments had been established in Italy just

a few years ago, devolving them powers in the fields of vocational training, agriculture and artisan production, with the exception of SMEs sector.

The role of employers’ and trade associations, Chamber of Commerce and Trade Unions has been growing in influence, affecting the local policy making.

The competition between national and regional model of government has encouraged innovative policies.

b) PARTICULAR ECONOMIC CONDITIONSPARTICULAR ECONOMIC CONDITIONS:The crisis of large industry and, on the other hand, the

growth of small businesses

Historical rootsHistorical roots

Emilia-Romagna: industrial districtsEmilia-Romagna: industrial districts

PIACENZA

RIMINI

PARMA

REGGIO EMILIA

MODENA

FORLI’

BOLOGNA

FERRARA

RAVENNA

Machine tools

Farm machinery

Food processing

Textile-clothing industry

Upholstered furniture

Packaging machines

Ceramic products and machines for ceramic industry

Shoes

Biomedical products

Wood –processing machines

Mechanical engineering

Agro-food

Policy of “Real services”Policy of “Real services”Based on the fundamental role played by Based on the fundamental role played by local manufacturing systems (Textile in local manufacturing systems (Textile in Carpi and farm machinery in Modena and Carpi and farm machinery in Modena and Reggio Emilia)Reggio Emilia)

Planning and interventions are conceived Planning and interventions are conceived to have an impact on a large number of to have an impact on a large number of companies belonging to the same sector.companies belonging to the same sector.

Continuous monitoring of the status of Continuous monitoring of the status of local production systems.local production systems.

Involvement of all the relevant actors Involvement of all the relevant actors (Local Administration, Business (Local Administration, Business associations, Chamber of Commerce, associations, Chamber of Commerce, Trade Unions, etc.)Trade Unions, etc.)

Basic Basic assumptionsassumptions

The policy of 80sThe policy of 80s

ERVETERVET

The ERVET SystemThe ERVET System

Innovation - Technology Transfer Innovation - Technology Transfer

ASTER

ConstructionConstruction

QUASCO

CENTRO CERAMICO

FashionFashionCITER

CERCAL

QualityQuality - Technology - - Technology - EngineeringEngineering

CERMETDEMOCENTER

CESMA

Quality-Technology-EngineeringQuality-Technology-Engineering

CERMETCERMETQuality Certification Quality Certification and Lab. Testingand Lab. TestingBolognaBologna

CESMACESMAFarm MachineryFarm MachineryReggio EmiliaReggio Emilia

DEMOCENTERDEMOCENTERIndustrial AutomationIndustrial AutomationModenaModena

Laboratory analysis and Laboratory analysis and testingtesting

Process and product Process and product certificationcertification

Assistance to SMEs in Assistance to SMEs in introducing quality control introducing quality control systemssystems

TrainingTraining

Information and assistance Information and assistance on technology innovation on technology innovation and regulationsand regulations

Demonstration installationsDemonstration installations

Growing role of the regional Government on Growing role of the regional Government on industrial policy matters and on local industrial policy matters and on local development thanks to the devolution development thanks to the devolution processprocess

Development of an articulate private or Development of an articulate private or associational sector providing high quality associational sector providing high quality services to companies services to companies

Applied research and technology transfer as Applied research and technology transfer as new needs expressed by companiesnew needs expressed by companies

Evolution of regional industrial system Evolution of regional industrial system requiring new reading keysrequiring new reading keys

Growing role of the regional Government on Growing role of the regional Government on industrial policy matters and on local industrial policy matters and on local development thanks to the devolution development thanks to the devolution processprocess

Development of an articulate private or Development of an articulate private or associational sector providing high quality associational sector providing high quality services to companies services to companies

Applied research and technology transfer as Applied research and technology transfer as new needs expressed by companiesnew needs expressed by companies

Evolution of regional industrial system Evolution of regional industrial system requiring new reading keysrequiring new reading keys

Significant changes in the scenarioSignificant changes in the scenario

Industrial system strongly diversifiedIndustrial system strongly diversified

Prevalence of mechanical sector in terms both of Prevalence of mechanical sector in terms both of employees (45%) and of local unitsemployees (45%) and of local units

In areas where mechanical sector is prevailing, the In areas where mechanical sector is prevailing, the dense presence of firms belonging to different sectors dense presence of firms belonging to different sectors and the widespread system of subcontracting relations and the widespread system of subcontracting relations make it very difficult to identify productive areas with a make it very difficult to identify productive areas with a single predominant product. single predominant product.

The whole region could be considered as a broad The whole region could be considered as a broad multi-sectoral districtmulti-sectoral district

A A new reading ofnew reading of the the economic systemeconomic system

A renewed interest in the A renewed interest in the debate on Industrial Districtsdebate on Industrial Districts

More balanced growth between the economic and the More balanced growth between the economic and the social components of developmentsocial components of development

SMEs as vehicle for enhancing endogenous developmentSMEs as vehicle for enhancing endogenous development Distinctive competencies give fresh weight to Distinctive competencies give fresh weight to

competition based on the peculiarities of the local context competition based on the peculiarities of the local context rather than on cost advantagesrather than on cost advantages

Incremental innovation fosters a continuous bidirectional Incremental innovation fosters a continuous bidirectional connection with positive feedback among investment, connection with positive feedback among investment, industrial and final goodsindustrial and final goods

Higher degree of evenness in the value distribution - Higher degree of evenness in the value distribution - considering the same turnover and value added considering the same turnover and value added producedproduced

Labour intensive much more than capital intensiveLabour intensive much more than capital intensive Not hierarchical productive systemNot hierarchical productive system

SourceSource: Lucio Poma, 2003: Lucio Poma, 2003

Local Development TheoryLocal Development Theory

Re-discovering by Social Sciences of territory as the Re-discovering by Social Sciences of territory as the conceptual frame to interpret the human phenomenaconceptual frame to interpret the human phenomena

By analysing the dynamics of Industrial Districts, By analysing the dynamics of Industrial Districts, academics and practitioners have provided an in-depth academics and practitioners have provided an in-depth understanding of the strategic importance of the understanding of the strategic importance of the territorial/local dimension for the comprehension of territorial/local dimension for the comprehension of economic and social actionseconomic and social actions

History, cultural identity, local communities, social History, cultural identity, local communities, social differences, institutions, accumulation of entrepreneurial differences, institutions, accumulation of entrepreneurial know-how, become fundamental factors to explain and know-how, become fundamental factors to explain and “read” the local territorial dynamics in a global context“read” the local territorial dynamics in a global context

Distinctive aspects defining the Distinctive aspects defining the development processesdevelopment processes

In a territorial context the development In a territorial context the development processes do not merely respond to economic-processes do not merely respond to economic-financial logics but arise from the synergic financial logics but arise from the synergic action of the socio-cultural structuresaction of the socio-cultural structures

The local development of the territorial context is The local development of the territorial context is based on the enhancement of its own based on the enhancement of its own differences: the whole social actor system is differences: the whole social actor system is engaged in a process of construction of the engaged in a process of construction of the territory through bottom up methodologiesterritory through bottom up methodologies

Preliminaries for aPreliminaries for anew Player Systemnew Player System

Regional Law on innovation and TT in order to encourage Regional Law on innovation and TT in order to encourage partnerships between firms, Universities and public research partnerships between firms, Universities and public research bodiesbodies

ERVET has dismissed the role of shareholder in favour of ERVET has dismissed the role of shareholder in favour of others (i.e. Universities, Companies, etc.)others (i.e. Universities, Companies, etc.)

ASTER has changed its legal status and shareholders ASTER has changed its legal status and shareholders compositioncomposition

The evolution of Business Service Centres moves towards a The evolution of Business Service Centres moves towards a full immersion in the marketfull immersion in the market

Only for their innovative activities, the Business Service Only for their innovative activities, the Business Service Centres can have access to public funds through public Centres can have access to public funds through public tenders (in competition with other private and public tenders (in competition with other private and public Business Service Centres) on projects developed in a close Business Service Centres) on projects developed in a close connection with the companiesconnection with the companies

The new Player SystemThe new Player System

ERVETERVET

TA and support to PA and Local Authorities

for Promotion and Improvement of the

regional territory

ASTERASTER

Co-ordination, financing, managing the Network forApplied Research and TT

Research Research and TT and TT

LaboratoriesLaboratories

Innovation Innovation CentresCentres

The Key StrategyThe Key Strategy

DEVELOPMENT OF ENDOGENEOUS

POTENTIAL