III SERN General AssemblyParma Province – Salsomaggiore T.

Franco MosconiJean Monnet Professor Of Industial Economics

University of Parma

10 May 2007

Googling the term “Emilian Model” results in many and many items

Not a surprise!The topic was first much studied during

the 1970s and 1980sDuring the 1990s-2000s the model was

“revisited”

Has the time arrived for providing a new definition of the “Emilian Model”?

The question is well outside the scope of this Introduction

BUT reflecting

the sources of industry localisation the new economic landscape (ICT

revolution, globalisation, etc)

We can try to understand:

> if a “new” model in Emilia-Romagna exists and

> the driving forces of “Sectors of excellence”

INDUSTRY LOCALISATION/I

Two works are important:

• The seminal work of Alfred Marshall (1890)and

• Its synthesis by Paul Krugman in his “Geography and Trade” (1990)

INDUSTRY LOCALISATION/II

3 reasons for the high concentration of manufacturingactivities in a given territory:

i. labour poolingii. intermediate inputsiii.technological spillover (Krugman elaborating on A. Marshall’s

“Principles of Economics”)

Also true nowadays for hi-tech industries and for service sectors e.g.:

City of London for finance Madison Av. in New York for advertising

INDUSTRY LOCALISATION/III

In the same vein, Micheal Porter’s Competitive Advantageof Nations

“Nation are most likely to succeed in industries or industry segments where the national <diamond> is the most favorable” .

“Nations succeed not in isolated industries, however, but in clusters of industries connected through vertical and horizontal relationship”.

GEOGRAPHIC INDUSTRY CONCENTRATION/I

Competitors and clusters are often located in a single town within a region.

GEOGRAPHIC INDUSTRY CONCENTRATION/II

Of course, many things are changing the world economic scene, e.g.:

ICT revolution BRICs Eastern Enlargement

But, Marshall, Krugman and Porter, still give the basic ‘ingredients’ for successful industrial localisation

Recent literature has emphasised that:

– R&D,

– Innovation,

– Human Capital

are critical for economic growth.

Especially, for the EU as it moves towards the frontier of technological development

What does this mean from a POLICY point of view?

The EU should strengthen its New Industrial Policy

by

Reemphasising its “Technology” Policy

but

Without weakening its “Competition” and “Commercial” Policies

“THE TRIANGLE”

POLICY

Regional aspects of competitiviness:

EC analysis suggests a positive correlation of PRODUCTIVITY with:

R&D intensity Specialization in high-tech activities N° of students in tertiary education

What does this mean from the point of view of the individual FIRM?

A growing importance of intangible assets in order to face the increasingly competitive international environment

Led to the development of new generation SMEs that have adopted successful product-innovation strategies, such as product differentiation and brand development

Our ‘Regions’ – industrial districts or clusters – will continue to adjust in the future

BUT

More investment in:– R&D– Innovation and – Higher education

is necessary if we want to draw full benefits from this traditional production system based round industrial localization

All in all:

From labour-intensive products to higher-tech, higher value-added, sectors.

Low-skilled jobs are moving (offshoring).

R&D, design, marketing… are crucial and stay at home (headquarter)

http://www.cattedramonnet-mosconi.eu

E-mail: franco.mosconi@unipr.it