n° 19 - July 2002

Districts for the Made in Italy

The temporary results of the 8^th Industry and Services Census add new elements of interest to the vibrant industrial district phenomenon.

During the 1991-2001 decade, the employment rate in Italy increased by 4.4%; meaning approximately 800,000 new jobs.  In spite of the diagnosis on the fragility of the companies and their difficulty in global markets, the 199 local productive systems classified by ISTAT  (Italian Statistics) as industrial districts because of the array of small-mid size companies, grew twice as much compared to the national average: +9.1%; basically, 6 jobs out of 10 new jobs were created within the districts.

The same margin marked the employment evolution in the industry, where the districts could curb the drop: only –4.0% compared to –9.6% national decline. The pictures shown by the census, although partial, highlight a distinct reorganization of the industrial district operative profile. To contrast the fall of employment in the industrial sector, there was a jump employment in “other services”:  + 42.6% compared to  +24.7% national average.

Many things have changed in the last few years, inside and outside the districts. It is probable that the number has changed due to some desertion in the Central North of Italy as well as various new entries, especially in Southern Italy. Without waiting for the updated map of the Districts with the new census data, it may be said that during the’90s the importance of the districts in the Italian economy grew.

The first pictures of the Census may sound as another revenge when compared with a diffused reading of the economic systems based on the contraposition “small-large enterprises” and insensible when including territorial dimension in the fundamentals of competitiveness.

But this is not the point. Today the districts are no longer the Cinderella of the economic policies of a decade ago. The Regions have laid out maps of districts (133 recognized thus far) and have launched or are launching development policies. The Ministry of Economic Development is considering them as the lever to the economic diplomacy.  However, the increased request for “suggestions to implement district development policies” has not boosted a corresponding offer. Private (research and consulting companies, trade associations, etc.), as well as public agencies (development agencies, various institutional agencies…..) have not done much to detect a demand for government and development tools for the districts.

The gap of services for district policies suggests once more a paradox in the national system that struggles in giving life to prepared organizations ready to work in international markets. However, this is what some foreign “ apprentice wizards” are practicing, although they certainly cannot boast knowledge similar to our patrimony but propose services to assist new local development policies according to the District model.

There is much space to network the local development expertise (including the Club) and utilize it as a lever for the economic diplomacy of this country through export of our districts. This idea of consolidating the Italian production share in the agitated waters of the global market is dear to the Ministry of Economic Development.

The New Club Presidency

During the Annual Assembly of the Members of the Industrial Districts Club, held in

Biella February 22, 2002, Mr. Adriano Sartor of the Montebelluna District was elected President for the following two years. Prof. Aldo Durante is now the new Secretary.

For the next two years Fondazione Museo della Calzatura Sportiva will be hosting the Districts Club at:

Villa Zuccareda-Binetti – 31044 Montebelluna (TV);

tel. _{39+ 0423} 303282 - Fax 39 ₊ 0423 303282

After the 2 year presidency in Lumezzane, the baton was handed over to the Montebelluna District. The new Club Assembly, which decided the new appointment (rotating every two years, by statute) was kicked off by Mr.Virgilio Bugatti. He reviewed the most significant stages of his presidency and, using worried tones, he did not avoid the issue of the eroding competitive system spreading throughout many Italian districts.

Mr. Bugatti reported on his mandate by presenting many positive aspects including his personal relations with members and friends of the districts.

Lumezzane stated its commitment in “having the Club’s flag flying high” in the most prestigious contexts and having enhanced the legitimacy of the various national and regional institutions in charge of the districts and their policies.  They announced it with the same pragmatism the Val Trompia people are known for when managing their companies.

Many times during his speech, Mr. Bugatti underlined his passion:

“The district– he pointed out-, is not only a combination of economic tasks; the district is a combination of people renewing their appointment every day in order to stay in the market, and what goes behind stage in terms of success and failure in creativity must be included”.

On behalf of all Club members, Mr. Adriano Sartor thanked Mr.Virgilio Bugatti and the Lumetel team for creating a team spirit. He then introduced the program for the next two years which will have three main guidelines, coherent  with what has been done up to now.

Ranking first is developing a relationship with agencies and associations: Municipalities, Chambers of Commerce, Institutions, and Artisan, Industrial and Labor Union Trade of Associations, Research Institutes and local banks. Many of the already existing and in good standing relations may become more frequent and the Club may propose itself as an important role in the implementation of district developmental programs according to regional laws such as L.317/91, art.36. In particular, he stated “ the Club wishes to propose itself for a role within this law. We can become partners with the Regions, be consultants capable of giving targeted advice, as we are rooted in the reality of each district and we thoroughly know how the territory moves”.

The second front of intervention will concern the growth of Club Districts. At the end of 2001, the Club clustered 25 primary Italian districts, a network made of 30,000 companies, 250,000 employees, with a total sales turnover of approximately Euro 30M. The aim is to expand the group and give more strength to the voice of the district members.

The visibility of the district can be enhanced by diffusing existing instruments or having a defined aim the present members can communicate with. “With such efforts we will get closer to other European districts and be heard in Europe with a greater and better qualified representation”.

Sartor proposed to give an itinerant role to the Presidency and to Technical Management for an itinerant role and highly involve the members of the Club Districts.

The meeting was held June 28, 2002 in Prato.

                                                           PROJECTS

Art and Enterprise

During the Annual Assembly of the Club, held in Biella at CittadellArte, our guest Master Michelangelo Pistoletto presented “The Manifest of Art and Enterprise”. CittadellArte, created by Fondazione Pistoletto, wants to diffuse creativity and interaction in every social context. This way Art and Enterprise proposes a new cultural path through which aspects of economic life and production processes are reconsidered.

Basically, the aim is to match a presentation (and self-presentation) of the small and mid size enterprises and the Italian districts to the specific values of beauty, to the aesthetic content of their production and to the links between productive activities and territorial specificity.

If finalized, this project will give a unique picture (aesthetic, cultural, historical, anthropological) to valorize the Made in Italy of the districts and propose it as an original production, a brave mix of taste, creativity and entrepreneurial ability: a  result of a socially responsible activity and carrier of typical values of our Country.

The climate in which Master Pistoletto’s proposal emerges, re-proposes curiosity and desire for exploring new things by going against trends. Thirty years earlier, together with a group of friends, he took his first steps in the “Poor Art Movement” and became one of its protagonists.

A bridge of lianas ties the platform of this new movement which in the past kept distance from homologation and from the aplomb of artistic activity, and the nature of the made in Italy of the Districts: live objects rather than non-anonymous or non-rooted products, a synthesis between entrepreneurs individuality and territory specificity; expression of cultural originality of localism compared to global products; source of plurality and variety to enriches the meaning of life.

Art and Enterprise wants to highlight the importance of the cultural content instilled in the enterprises and their products; each entrepreneur becomes a participant of its own project “simply by giving a sign of recognition to the symbolic value its business represents”.

“The Italian Industrial Districts –in the Manifest project– “make up a unique productive phenomenon worldwide. They develop a reality addressed to the prospect of plurality, singularity and differentiality which are important to economic talks with omnivorous global homologation. The numerous industries forming the Italian Districts are independent identities with own specific excellence and make up a market of original, particular, unique, and differentiated products. These bear the knowledge uniting imagination and inventiveness to artisan creativity and the utmost technological science”.

The Master observed this combination of various forms of individuality clustered within the Districts, leads innovation, utilizes it without being passive and adapts it to a pre-existed know-how system of values seeded in the territory.

He also states,“ the industrial districts make up a large and articulated sole structure where multiple productive realities prosper. They generate organic formulas in a highly doomed social system of: unity in diversity, extendable anywhere in a conflicting contrast between a principle of diversity and that of uniformity marking the present crisis of living together”.

The entrepreneurs are also artists who can perform this role a contemporary society as easier decision-making and mental freedom are at hand; this explains why they can put together a project of “responsible social transformation”, to improve forms of coexistence capable of: harmonizing the individual in a global context by preserving originality.

The Club endorsed Master  Pistoletto’s proposal. In the next few months, a team coordinated by the Master will go into detail and specify the course to take.

ENVIRONMENT

Ecodistricts 2002

During the past editions of the International Exhibition for energy and ecotecnology in Padova, the spotlight has been placed on the districts and their environment, and the so called “ecologically correct” recognized districts.  This happened also last March when the Report on Ecodistricts 2002 edited by Ambiente Italia and published by Legambiente in collaboration with Club of Districts and Padova Fiere was presented.

The report showed the results of systematic findings on the diffusion of innovation and investments to protect the environment in the Italian industrial districts.

Ecodistretti 2002 – although available data is scarce or fragmented - gives a series of updated instruments the districts and local productive systems have passed and are going to improve the territorial environment.

The data analysis comprised 47 local productive systems – representative of 13 regions and 14 product sectors – grouping about 65,000 enterprises with 500,000 people directly employed.

The analysis, as easily understood, is very contemporary and of extreme interest because also institutions such as the European Community and the OECD have recently been concentrating on the bottom-up approach to bring forward integrated initiatives of economic development, fostering employment and environmental protection.  With the awareness that the environment variability is becoming increasingly important for enterprise competitiveness, this research rebuilds the attitude of the district world and offers many examples to the entrepreneurial world and to public agencies concerning local development and environment.

The indicators

The environmental impact on the districts has traditionally given high relevance to waste production and energy consumption as they represent a large slice of the operative costs.

However, there are different impacts already existing which highly affect enterprise activity. Firstly, the congestion phenomenon in industrial areas especially in the North. Secondly, the problem of increased use of trucks to transport goods together with its related energy consumption, pollution and construction of new highways. Thirdly, and finally, the national average water consumption for industrial use, very often taken from water-bearing stratum.

Analyzing elaborate solutions at local level, the report shown the presence of:

- integrated district facilities  for environmental protection: environmental systems for water treatment, waste treatment, energy production for the enterprises and – above all –systems to reduce resource consumption;

- service centers for environmental innovation; degree of integrated energy services diffusion (energy audit service to rationalize energy usage); use of clean technologies (based on a predetermined list of best national and international practices);

- environmental certifications and recordings; environment product quality brands (number of enterprises using life cycle analysis techniques to evaluate environmental  impact of products or that have acquired a environmental quality trademark for the product made in the district);

- state and efficiency of environmental controls by the Public Administration; promotion of innovative tools to manage the environment.

Research results

According to the authors, to get and win the mid-term competitive challenge, the local productive systems and enterprises must create their own environmental reconverting projects of their production systems.  Research pauses to reflect on what has already been accomplished: increase in the ISO 14,000 certification (doubled in this past year), investment in research and cleaner experimental technologies (+5% compared to last year), and activation of projects to certify environment of areas and districts (now in progress in 25% of districts under observation), although these initiatives are not so diffused yet.

Only 7% of the existing district structures are resource saving and only 28% are applied towards waste recovery and its exploitation, while waste dumping and flowback purifying still prevail; only three districts have (or are in process of having) product quality environmental trademarks (Poggibonsi Furniture and Prato Textile), and only three (San Daniele food processing, Civita Castellana ceramics, and Murano glass) have activated an energy audit service to reduce consumptions.

The general picture is encouraging and sees protagonists the districts where positive signals and sometimes excellence often are brought to surface.

The ISO 14,000 certification trend went from 23 to 45 in one year and is showing a sharp change in the movement.  If we take into consideration that many certifications are in progress, the result will be seen in the next few months.  Another 13 Emas certified sites are added in the Sassuolo and Langhirano districts.

Another positive sign is the increase of energy and heat production combination, with equipment increasing from 3% to 6% of the systems.

In the numerous examples of enterprise dynamism, research reports show lack of control from the institutional agencies in charge: of the 35 authorities surveyed (Regional Arpa and Provinces), 12 supplied information on controls performed and only four of these (Vicenza with Arzignano district, Cadore-Belluno, Treviso, Modena with Sassuolo) can be mentioned for their mix of inspections, environmental monitoring, raw materials used, exhaust usage and study by sector.

Within this context, it is interesting to notice that 1 out of 5 districts are developing volunteer agreements between enterprises and agencies to create preferential lanes for controls on companies selecting environmental certification.

The most advanced experiences

The Ecodistrict Report brings into light a series of innovative experiences: among these is the  Prato textile District with projects by Consorzio of first Macrolotto of  waste recovery  to obtain cogeneration energy. For some time the Prato district has had a group of people organizing and coordinating the initiatives of companies for waste dumping and water supply. Furthermore, Progetto Closed has been in operation to introduce Environmental System Management at a closed cycle in the industrial districts.  Biella, another textile district, has been distinguished for waste recovery systems, recycling, and co-generating plants.

The Report positively assesses the Arzignano tanning district for introducing clean technology and air exhaustion control. Also the furniture districts of Poggibonsi and Quarrata, active in the promotion of eco-products and eco-compatible technologies, were positively assessed.

Positive evaluation was given by the Report also to the Murano glass district, thanks to the clean technology and the commitment of the experimental glass workstation assisting companies in introducing heat recovery from the melting ovens.

Finally, in terms of certification, the Sassuolo ceramic district was distinguished for having 6 ISO 14,000 certifications and 8 Emas sites, as well as for the food industry of Langhirano with 5 ISO 14,000 and 5 Emas sites.

The “Ecodistretto 2002”Award

In Salerno, the Legambiente “Ecodistretto 2002” award went to the Project “Clean Sarno” for the agribusiness district of Agro Nocerino Sarnese (73 enterprises with 1,400 employees and turnover of Euro 150M).

Project “Clean Sarno” aims at reducing water usage by rationing the district enterprise needs during productive cycles, and improving quality flow back, as well as promoting environmental certification. Also two accolades were given to the Cusio-Valsesia and Treviso districts since steps towards environmental compatibility had been made. For the Cusio-Valesia district, the Rubineco Project award was given to Novara and Vercelli to include Arpa, Provinces, and Industrialist Associations for introducing, especially in  small-mid size companies, cleaner foundry jobs, better surface treatment, and metal water-tap moulds to reduce pollution and water consumption.

The Treviso Province was protagonist thanks to its policy on emissions control and solvent use reduction by the furniture district companies, and for granting incentives to companies implementing more efficient systems to abate pollution.

Reviews

Districts and globalization

S. Berger, R.M. Locke.

The “Italian Case and Globalization”

in T. Padoa Shioppa and S.R. Graubard

The Italian Case 2. Where is our country going?

Milan, 2001

Map of districts in Tuscany according to Region

After 25 years, the American magazine Daedalus wrote again on the original phenomena of the Italian society and economy and, as previously done, (F. L. Cavazza and S.R. Graubard, edited by Il caso italiano, Milan1974), Garzanti proposed a translation in an essay collection edited by T.Padoa Schioppa and S.R.Graubard.

In both cases, a chapter was dedicated to the industrial districts with productive systems raised “on the fragments of a previous order made up by the small family operated businesses, based on artisan talent, self-discipline and professional pride”.

At that time, the curiosity of the American Academy of Arts and Science was attracted by the break between the political bureaucracy and the patronage system of a dynamic economic society.  Part of the contrast was dissolved when the districts were discovered and, cooperating with the local agencies, were able to compensate the stiffness of the national bureaucracy. The suggestive article dated 1974 gives the impression that an overestimate was given to the role of political parties, catholic church, local administrations, labor unions, and trade associations in creation of the context supporting the competitiveness of many small-mid size companies.

This time Suzanne Berger and Richard Locke ask themselves if “in a global market era, would an economy of production integrated yet rooted in socio-political institutions based on a territorial concentration concept, continue to be an advantage”.

This question indeed goes beyond a specific case. The future of small-mid size companies and the Italian districts in the era of globalization does not affect only Italians: it affects the general solidity of the economy which is based on contiguity and territorial rooting in an era where new technology in communication and transportation have gone beyond borders and distant barriers.

Among the notes of their new journey in the districts, there were general impressions

(“an average low unemployment rate, high wages for the district factory workers ...”) and precise answers to the most frequent questions we have heard by outside observers  (“there is no sufficient indication to reckon the presence of a vertical integration in course..;  the districts do not seem to be chocked by leading companies… ).

In a world of continuous technology progress and of growing international competition, it makes sense investigating the new economy may benefit small companies or some sectors also because their economic performance depends on external factors, enterprises are not always capable of creating their own.

Although the local network where Italian districts are based is highly exposed to the globalization pressure, the Italian districts are resisting and a high production percentage continues, locally. This is different from what is happening in competing countries (Hong Kong, Taiwan). Where should specificity of the Italian case be sought?  In products of the district somewhat different (fashion, design, superior quality), and in the partial use of dislocation which, however, always represents a threat.

Berger and Locke do not see in the future of the districts the possibility of a leap from today’s industrial sectors towards high technology frontiers; rather, they feel that the districts have the ability to absorb new technologies and incorporate them into traditional sectors: ‘integration of optimal production design standards with new technologies enabling the creation of highly valued products. To create them, companies must stay in their own districts … have access to information that may be transmitted only through social relations; integrate this knowledge with new high added value products; and find highly specialized labor”.

Their second journey was closed realizing that the future “lies on the foundation of the old economy and there is no intention of abandoning it; the Italians have chosen to update and restructure their traditional sectors”. According to the authors’ impression, the most relevant matter seems to lie with the many different ways to look at globalization, and the districts are setting their new and original interpretation of the phenomenon.

Digital Productive Districts

Federcomin Report by

RUR-CENSIS,

Rome,  2001

The report focused on the level of management information systems of the companies of the Italian districts and their attitude towards digital innovation.

The analysis, spanning on the 51 districts – consolidated and emerging – and the 32 productive local systems, proposes a split dichotomy. There is a skeptic and a still defiant attitude, and on the one hand a more pragmatic and open attitude towards ITC on the other. The most diffused applications show to be the most “traditional” one, tied to information exchanged via email, web sites or portal sharing (38% of the cases).

However, the most advanced applications and e-business are increasing.

The logistics knot is still representing a relevant obstacle in spreading ITC: the cabling initiatives, which are the precondition for use of new technologies, interest a small part of the district world and only in few cases a common strategy is perceived. To the strangling of facilities, companies’ difficulties in adapting to what is new are added: reticence in sharing information or difficulty in getting skilled staff for the company.

In this non-homogenous picture, “digital, obliged path for the  industrial districts”,  the writers sum up their thoughts.

For a company to succeed today there must be the full awareness that high technological innovation is a decisive factor and ITCs should give appropriate support for international strategies. With this in mind, telecommunication innovation may bring the plus necessary to overcome some critical tangles found in mature districts to support enterprises competitiveness as well as to represent an engine to develop the territories in the reconstruction phase.

Good policies for the Districts

Notes on a grid to assess local policies

set by Andrea Forti, IRS/CSIL

Workshop delle Stelline, Milan,

May 17, 2002

In the last ten years, new space has been given to local initiatives and district policies; European Union policies, diffusion of negotiated plans, transfer of power and resources to the Regions due to decentralized administrations and modification to the constitutions, supporting instruments introduced in a specific context for the districts and for small enterprises local systems.  Therefore, there has been an increase in demand for local development practices, meaning the intervention to enhance the resources and sustain territorial competitiveness considered as the ability to generate income and employment. An experimental approach, almost artisan, imprints many of the implemented interventions. Now it is time for a higher quality step to take place.

A local industrial policy can be evaluated in various ways.  A survey of latest impact can be the growth rate of the gross industrial product and the creation of new employment. Direct indicators can be used (with the conviction that, if programming and implementation are good, the desired impact will follow), for example: new enterprises are created, partnerships, increase of exports, improvement in perceiving the use of local policies by the subjects involved (customer satisfaction).

Based on experience, CSIL and IRS have created a “Matrix Rating” proposed as support for planning and implementing the district/local industrial policies.

This tool is based on a benchmarking exercise to help understand if and in what size local policy plans and implementation have finally incorporated their best practice.

In general, experience shows that local policies are successful as long as they are designed in coherent path of analysis; general and specific objective articulation, a sign of a strong integration identification (not by single instruments); planning and implementing processes are well managed. Then plays interested in local development can work together with IRS/

CSIL researchers.

News and Events

Greetings to our readers!

As previously announced, we have stopped publishing the paper report on the Italian Districts. The news exchange and information will continue directly

on the renewed web site. It is proposed to be a benchmark and a meeting point for those practicing local development policies of the districts.  We invite our readers to visit our site and collaborate with us in updating.

www.clubdistretti.it

(A. Balestri)

New Members

The following districts are new members of the Club:

 furniture (chairs) of Manzano and

agribusiness of San Daniele del Friuli, both represented by Udine Province;

 Agribusiness of Nocera Inferiore - Gragnano, represented by Patto territoriale Agro

Nocerino Sarnese; the “Inox Valley” of Conegliano and Opitergino Mottense for woodwork, both represented by Treviso Cciaa (Chamber of Commerce)

How to enroll in the Club

The Italian industrial districts represented by Cciaa, Industrial and Artisan Associations, Service Centers, Labor Unions, and local development organizations established by the same and by local agencies can enroll.

The new administrative office is:

Fondazione Museo dello Scarpone e della

Calzatura Sportiva di Montebelluna.

Information to be sent to:

Club dei distretti industriali, Villa Zuccareda-Binetti

– 31044 Montebelluna (TV)

Tel. 39-0423 303282 – Fax39- 0423 303282,

info@museoscarpone.it,

Aldo Durante (Secretary)

Districts on the net

• Reported here is news we think will be appreciated by all those interested in the industrial district phenomenon;

The University of Florence has dedicated a section from its website with copies of publications, interviews, articles and biographic information to the senior member of the districts, Professor  Giacomo Beccattini:

http://sviluppo.cce.unifi.it/becattini/

• STARNET is on-line data bank of the Chambers of Commerce network where highly detailed statistics about Italian districts can be found.

The address to access is:

www.starnet.unioncamere.it,

after which it is possible to get into the thematic area dedicated to the industrial districts.

Files containing analysis (information, biographic references) and statistics can be seen, a useful and easy source of information.  

• LEED Flash is the new monthly issue on-line of the Leed program bulletin

(Local Economic and Employment

Development) of the OECD.

For information about the Leed program or to subscribe to Leed Flash write to: lucy.clarke@oecd.org

Club voice La voce del Club

The club took part to the following meetings:

• Datar, OCDE

International Conference

on Territorial Development

Paris, 28/29/30 January 2002

• Italian Chamber of Commerce for Portugal – Iampei

A experiencia dos distritos industriasiem Italia

Porto, 15 de Abril, 2002

• Institute of light industries and IRSC and IRS

Policies for small enterprises and the industrial districts in 2002, Milan, Palazzo delle Stelline,

May 17, 2002

• DIM Agency -

Marsciano industrial district

Marciano produces 2002: Industrial district and local development

Marsciano, June 22, 2002

• Assindustria Belluno

Eyewearcommunity: integration of processes in the eyewear district

Castion di Belluno, 8 July, 2002

Publications on districts

• P. Lattarulo (edited by),Logistic and transports in the district of Prato.

 A weak link or a strategic factor for growth?

Franco Angeli, Milano, 2001

• D. Cersosimo, R. Nisticò

The underwear and lingerie district.

Agencies and local development in Lavello

Meridiana Libri, 2001

• Antonio Genovesi Foundation

Salerno

Marketing a Salerno

Research report provided by

L.I.S.I.L., Vietri sul Mare, 2001

Reporting

• The Competitiveness Institute

5th Global Conference

Cairns Australia, 9/10/11 Ottobre 2002

• Met

Master in Management and economy of the territory (focusing on innovative management of the districts and industrial systems) promoted by

LIUC (Università Cattaneo,

Castellanza) e Lumetel from November 11^th 2002 to July 11th

Information: mnigro@liuc.it

• SDA Bocconi

Running industrial district

Milano, 27 and  28 June 2002

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Copyright©2001 by Club dei Distretti Industriali