The model of the italian industrial districts

1. Industrial Districts
1) Description

2. Map and updated data

3. Districts setting up
MKT

4. Common elements in districts:
• Great Technological
knowledge/practical experience
• Production cycles possible to be
decompose into their single phases
• Availability/necessity to
entrepreneurship

5. Articulation ofArticulation of
industrial districtsindustrial districts
Raw materials
Machinery
Semi-finished
SUPPLIERSSUPPLIERS
Trust
Job market
SOCIAL CAPITALSOCIAL CAPITAL
Attitude
Value
Accessibility
Transports
Water purifying
Building land
INFRASTRUCTUREINFRASTRUCTURE
CAPITALCAPITAL
Banks
Designers
Transports
Agents
PRIVATE SERVICEPRIVATE SERVICE
TYPICAL ACTIVITIESTYPICAL ACTIVITIES
Sub contractors
CUSTOMERSCUSTOMERS
Markets
Schools
Trade associations
SOCIAL SERVICESSOCIAL SERVICES
Services centres
Consortiums
Research
Marketing
ProductionSub contractors
Sub contractors

6. Districts main features - 1
• central role of the family and job sharing
among the family members inherited from the
rural society
• common social background and values
• high social mobility and entrepreneurship
attitude

7. Districts main features - 2
System of factories with an integrated vertical
production cycle and greater division of work among
single concern which minimises costs and promotes
new businesses
Space contiguity among companies and consolidated
relations which favour reduced transaction costs and
greater intrinsic reliability
External economies of scale
Constant technical innovation
High specialization in phases and components
High competitiveness among enterprises

8. Districts main features - 3
Cooperation between enterprises and public
bodies about external economies
Weak entry barriers are increasing because of
bureaucracy problems
Exit barriers: the artisan can do just one specific
task and cannot change his business
Professional and skilled workforce who learn
locally
Collective learning (learning by localizing,
learning by specializing, learning by interacting

9. Strong points
Flexibility
Professionalism
High competitiveness between firms
Continuous investment
Important role played by local banks
Co-operation with public bodies

10. Weak pointsWeak points
Excessive localism and closure to the external world “Death
by asphyxia”
Maturity of the life-cycle of the area ( pointed out by
slowing of enterprises turnover)
Difficulty to face radical changes and innovation outside the
existing technological framework
Lack of guidance and strategies for growth and renovation
Less bargaining power with the distribution system
Competition by countries with low labour costs
Difficulty in reaching new potential growing markets
Problem of generation transfer

11. Industrial Districts
2) Evolution

12. • MARKET GLOBALIZATION, process which imposes a
planned approach to the market on companies and
takes back economies of scale problems, especially
those related to research and engineering, marketing
and financing
•TECHNOLOGY EVOLUTION, showing the coming-up
of new technological paradigms (e-commerce) and
rules (quality certifications, safety and environmental
rules ), which reflex upon production cycle
organization
The new competitive contextThe new competitive context

13. Districts challengesDistricts challenges
• HUMAN RESOURCES AND TRAINING
• INTERNAZIONALIZATION / GLOBALIZATION
•TECHNOLOGICAL INNOVATION AND
NETWORK TECHNOLOGIES

14. • MARKET GLOBALIZATION, process which imposes a
planned approach to the market on companies and
takes back economies of scale problems, especially
those related to research and engineering, marketing
and financing
•TECHNOLOGY EVOLUTION, showing the coming-up
of new technological paradigms (e-commerce) and
rules (quality certifications, safety and environmental
rules ), which reflex upon production cycle
organization
The new competitive contextThe new competitive context

15. Internationalisation /globalisationInternationalisation /globalisation
• Delocalisation of low-costs phases
• Dismantling of traditional network
• New networking and co-business strategies

16. Relationship modelsRelationship models
Customer
CustomerCustomer
SS SS SS
SS SS SS
SS
SS
SS
SS
SS
SS
TRADITIONALTRADITIONAL
SUPPLIERSUPPLIER
NETWORKNETWORK
Supplier

17. Customer
CustomerCustomer
SS SS SS
SS SS SS
SS
SS
SS
SS
SS
SS
Supplier
CustomerCustomer
SSSS SSSS SSSS
SSSS SSSS SSSS
SSSS
SSSS
SSSS
SSSS
SSSS
SSSS
PSPS
PSPSPSPS
PSPS
INNOVATIVEINNOVATIVE
LOCAL SUPPLIERLOCAL SUPPLIER
NETWORKNETWORK
Primary Supplier
(Comaker)
Secondary Supplier Customer
Relationship modelsRelationship models

18. Customer
CustomerCustomer
SS SS SS
SS SS SS
SS
SS
SS
SS
SS
SS
TRADITIONALTRADITIONAL
SUPPLIERSUPPLIER
NETWORKNETWORK
Supplier
CustomerCustomer
SSSS SSSS SSSS
SSSS SSSS SSSS
SSSS
SSSS
SSSS
SSSS
SSSS
SSSS
PSPS
PSPSPSPS
PSPS
INNOVATIVEINNOVATIVE
LOCAL SUPPLIERLOCAL SUPPLIER
NETWORKNETWORK
Primary Supplier
(Comaker)
Secondary Supplier Customer
INNOVATIVEINNOVATIVE
GLOBALGLOBAL SUPPLIERSUPPLIER
NETWORKNETWORK
Relationship modelsRelationship models

19. Medium St. Dev.
It will be slight 3.1 0.9
It will change districts winners and losers 4.8 1.8
It will change the local dimension of districts 3.1 1.2
It will cause a new aggregation of districts on virtual bases 4.9 2.1
It will cause districts development 5.8 1.5
It will outline new business relations 5.5 2.0
It will outline new relations between customers and
suppliers
6.6 1.5
E-commerce impact on the structure/survival of districts
Source: A.Ordanini, Università Bocconi - Club dei Distretti Industriali
Network technologiesNetwork technologies

20. marketmarket
processprocess
• to gain visibility
• to supply innovative services
• continuous trust by customers
• turnover increase
• enlargement of the market
• to make information easy to get
• to make production flexible
• to optimise resources
• upgrade of supply
quality
• reduction of supply
time and costs
• to increase flexibility
• to reduce logistic
investment
• virtual shop
• marketplace
• telecommunication
channel
• corporate portal
• call centre
• advance sale
• post sale
• eXtended ERP
• System Integration
• message Broker
• outsourcing
• access to marketplace
• auctions
• supply chain management
• exchange
• supply advancement
supplysupply
Companies /districts targets and solution models
Network technologiesNetwork technologies

21. From Local Districts toFrom Local Districts to
Global Virtual EnterprisesGlobal Virtual Enterprises
IndependentRegionalNetworksIndependentRegionalNetworks
Use of Virtual
Enterprise concept
for business
development:
Intensive use of
modern
communication
technologies
Global Business
Integration
Virtual Enterprises
GlobalVirtualEnterprisesGlobalVirtualEnterprises

22. Cairo - 29th June 2000
Industrial districts
3) Policies to development

23. a) Policies of : development / emersion
maintenance of competitive advantage
revitalisation ( strategic repositioning)
b) Public Policies as support to development and
cooperation among local energies and competencies
and not as substitute
Industrial politicies for districtsIndustrial politicies for districts

24. Experience teachesExperience teaches
- districts are not created by a law
- districts are a complex organization phenomenon
which comes from the interaction of social-cultural
and economical aspects
- it is necessary to act on every environment aspects

25. Who does what?
Districts projects and problemsDistricts projects and problems
creation of a network which involves all
important local actors in order to avoid
resources waste and to increase intervention
efficiency and integration of different
components of the internal local system
economy
to make local public bodies to be guides,
able to act as catalysers and able to
strenghthen development strategies for
districts

26. Cairo - 29th June 2000
Policy suggestions to createPolicy suggestions to create
environments conducive to SMEsenvironments conducive to SMEs
1st
level aims at promoting the private SME
sector in general
2nd
level consists in sectorial -specific actions,
aimed at increasing the competitiveness of
clusters
3rd
level reinforcement of a positive
institutional environment
3 LEVELS OF ACTION3 LEVELS OF ACTION

27. Cairo - 29th June 2000
actions for reducing bureaucratic costs and
complexity of bureaucratic procedures for
enterprises;
actions for providing information about incentive
laws for the creation of new enterprises and for
investment;
actions for supporting existing or potential
enterprises in presenting application models for
incentive laws;
actions for providing micro-credits for enterprises
and to design guarantee schemes;
11stst
level - (a)level - (a)

28. Cairo - 29th June 2000
actions for building up basic infrastructure on the
local level, consisting in industrial areas, roads, water
electricity, telecommunications;
actions for promoting entrepreneurship from a
cultural point of view, and for educating existing or
potential entrepreneurs in basic managerial
techniques;
actions for providing services to micro-enterprises
of the informal sector.
11stst
level - (b)level - (b)

29. Cairo - 29th June 2000
actions for promoting local products on foreign
markets;
actions for providing local enterprises with
information about technology and markets;
actions for training specific strategic human
resources for production and business processes;
22ndnd
level - (a)level - (a)

30. Cairo - 29th June 2000
actions for promoting networks of SMEs and for
setting up collective service activities;
actions for providing temporary management
and mentoring for local SMEs;
actions for providing adequate medium-long
term financial support, in order to facilitate
enterprises to buy new technical equipment,
consultancies, etc.;
22ndnd
level - (b)level - (b)

31. Cairo - 29th June 2000
actions for increasing the quantity and quality
of infrastructure;
actions for creating international linkages for
local enterprises, and possibly, joint-ventures;
actions for the attraction of foreign investment
in innovative and complementary activities;
22ndnd
level - (c)level - (c)

32. Cairo - 29th June 2000
actions for connecting local enterprises to
university and research centres and for
transferring the results of scientific and
experimental research;
actions to reinforce local identity and to
stimulate the circulation of information;
actions for promoting international cooperation
between institutions and for creating
institutional networks at the international level,
in order to exchange experiences and to create
regional networks.
22ndnd
level - (d)level - (d)

33. Cairo - 29th June 2000
the networking of all relevant actors at the local
level to avoid dispersion of resources and
increase the effectiveness of interventions and
the integration of different components of the
local economy within the system
generating local leading institutions, which act
as "catalysers", able to develop strategic
development guidelines for the cluster by
involving and coordinating different local actors
in policy initiatives to fulfil common objectives.
33rdrd
levellevel