Industrial policies and local company systems

Local systems and national development

This paper, addressed to economic policy makers to draw their attention to the importance of certain internal development processes that are going on in many areas of our country, is the product of collaboration between a group of such areas.

"Local systems" have always played an important role in national development. Their contribution to the nation's economic activity is estimated as being 20/25% of gross national product and employment. Their share of total Italian exports is over 25%, but in spite of this their specific problems and their potential in employment terms still haven't received adequate recognition from the political world.

Local systems are characterised by a variety of sectors and organisational methods that differ widely from one another. Among these, the most easily distinguishable are the "industrial districts", due to their strong identity associated with few strongly characteristic elements: specialisation in a manufacturing sector, the division of work between companies, high entrepreneurial levels and permeation between social and economic life.

The "industrial districts Club" was established in 1994 with the purpose representing the specific interests of these industrial realities. The Club's principle aims are:

• to create a network between district operators to assist the exchange of information and experience regarding common problems;
• to give greater visibility to the role played by the industrial districts in the national economy
• to support the interests of the districts at national and European government level;
• to promote research into the industrial district phenomenon

As the idea of establishing the Club was evolving, the government made the decision to transfer power of intervention in the districts to the Regions (L. 317/'91). Since then, the hope that a space dedicated exclusively to the industrial districts could finally be found in the corridors of power has been totally disregarded.

Development and territorial policies

The Club's proposals fit into a wider perspective concerning redefinition of the State's role, with part of its administrative functions being transferred to the Regions and local autonomy. The Italian industrial structure is far too complex and varied to become object of generalised interventions. As a wide range of case studies on the experience of many Regions demonstrate, the problems that the districts face very often vary from district to district; in some cases these regard professional training, in others the treatment of water utilised by factories, and in others the image of local production or the provision of areas for new industrial development. Furthermore, a significant proportion of those interventions that could be considered as supporting the districts are made up of services aimed at information and training, backing for innovative activities and consolidation of factors aimed at rendering the individual areas attractive. These are all services that require a profound knowledge of local dynamics to be effective.

The only effective way of tackling such a large number of very different problems lies in devolving power of proposal and intervention directly to the territories themselves.

As operators in the districts, the fundamental demand that we make of the political world is that of radically shifting decisional power from central and regional levels to the local level.

This basic criteria regards not only the "industrial districts", but is also extended to all "local systems" throughout the country, and forms the basis of a new approach to industrial politics based on investing the district communities with responsibility for their development.

A new way of running industrial politics

The criteria for recognising the industrial districts established by the Industry Ministry (Ministerial Decree (DM) 21/4/'93) have been found to be somewhat laborious and difficult to implement. This has caused a good deal of slowness in Regional action that, despite the powers conferred by art. 36 of Law 317, has not yet managed to make any impression on programs for the districts.

The transfer of power from central to regional and local levels is the premise for a new form of development policy.

The recognition of local systems as the most appropriate level for economic intervention doesn't stem from parameters of a statistical nature, but rather from geographical, historical and cultural criteria.

Development policies must have, as their primary reference, the communities that work in the same territory, and that are united by a common identity, giving them the chance of tackling their problems in the most appropriate way.

The local systems themselves have to mobilise their resources and energies to realise development programs, but should be given significant access to national and regional financial resources, as well as to Universities, research centres (CNR, Enea, ....) and public administration (Ministries, ICE).

To ensure more breathing space for the industrial districts it is also necessary to integrate local development plans with EEC, national and regional training, employment, innovation and internationalisation programs.

This type of integration of EEC, national and regional planning on one side, and local plans on the other, should be designed to reward the following capacities :

• the ability to mobilise resources, enterprise and district imagination;
• the development of original and innovative projects;
• the consolidation of base infrastructure and collective district assets.

The range of interventions at local level

The desired changes in this country's territorial and industrial policy must be along the lines of subsidiaries, and begins with the establishment, in each local system or district, of an officially recognised authority responsible for intervention analysis and planning.

On a civic level, the industrial districts are already well organised, having reached a discreet level of development. The fabric of civic relations within the districts is rich, and the reciprocal trust that exists between the operators present, is of great assistance in reaching agreement on common objectives.

This district policy making machine doesn't infer the establishment of a new administrative body to add to those already present. Its field of action should be of that of planning and representation of local interest at Regional, national and European level.

In the sphere of this functional framework, the individual local systems should decide what form their respective planning organisations (agencies) should take, their authority being the expression of the territories themselves in their various configurations.

In this sense, the Club intends to promote the experimental establishment of a territorial level planning and intervention body to serve as model for the eventual definition of appropriate Regional level standards regarding territorial development.