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Seminario CoCap                   Porto Alegre 28 09 2012




Social capital and upgrading of
  Small enterprise networks:
    what have we learned?

                                            Tito Bianchi
                                          Evaluation Unit
                  Department of Development and Cohesion
                                                    Italy
INDEX



•   Social capital, regional
    development and upgrading of
    enterprise networks
•   Italian policy measures and their
    trajectory
•   What have we learned from
    positive experiences
Social Capital in social science


• Measures of social capital are being
  assessed -> their relationships with
  development proven
• Indicators used are unsatisfactory proxies;
• Social network analyses are increasingly
  popular -> assess intensity of relations,
  internal hierarchy, openness of networks;
Social capital and regional development
               policy in Italy


Italian literature on Industrial districts of the 1980s-
90s has identified identity bonds and trust as an
ingredient of localized small firm development.

Sociological literature on (Putnam 1993) identifies
civicness as an ingredient of regional development




 Can cooperative attitude be induced through
 policy intervention?
From positive to normative



Districts, filières, firm cooperation, from
spontaneous phenomena become
categories of policy intervention




 Firms, associations, branches of government
 are awarded resources and benefits in
 exchange for commitment to cooperate
Several Policy instruments that aim at
  inducing social capital in networks of
     firms have been active in Italy


1997   –   2004    Patti Territoriali
2003   –   2010    Progetti Integrati Territoriali
2005   –   today   Distretti Tecnologici
2010   -   today   Reti d’Impresa


… all attempts at reproducing the
collaborative conditions that make groups of
firms collectively more competitive
Patti Territoriali to promote local
           development in Italy

financial incentives awarded to a of locally
financial incentives to a group group of
locally-based firms: integrated investment by
based and integrated projects designed
plan designed by a coalition of local actors
a coalition of local actors
“Patto” consisted of a package of grants to
firms’ investment and of (up to a max of 30%)
infrastructure operations
230 Patti funded, after bidding process, in
subsequent generations between 1997/8 and
2001 – total value of 5.5 Billion (current) Euro
1990- Territorial Pacts for industrial
                development

I PATTI TERRITORIALI APPROVATI: DATI DI SINTESI RICAVATI DAI
PROGETTI
                                                  N°                                    TOTALE



                                                                N°       Investimenti       Agevolazioni     Occupazion
                                                            iniziative     000 euro          000 euro        e a regime

                  Patti con procedura Nazionale




Patti 1° generazione                                   12          434        513.507             371.179         6.984

Patti 2° generazione                                   39       2.000       3.019.079            1.277.708       21.703

Patti 10-10-99                                         28       1.021       1.589.236            1.002.745       10.959

Patti 31-12-99                                          7          254        405.762             164.952         2.217

Agricoli                                               91       4.977       2.188.395            1.385.765       19.860

Calamità naturali                                      32       2.178       2.825.677             901.973        14.064

TOTALE     Patti Territoriali Nazionali           209          10.864      10.541.656            5.104.322       75.787

PATTI EUROPEI (PTO)                                    10       2.025         745.710             380.764         8.434

TOTALE     Patti Territoriali                     219          12.889      11.287.366            5.485.086       84.221
Patti Territoriali
coverage of the
Italian territory
Grado di
 copertura
territoriale
Grado di
 copertura
territoriale
Grado di
 copertura
territoriale
Grado di
 copertura
territoriale
2000-2006 EU regional development Plan
         introduced in Italy….

        Progetti Integrati Territoriali

 “Composite project for the development of an area,
 which includes a set of different operations that all
 contribute, in interaction with each other, to a common
 development strategy, devised by local actors in
 response to concrete needs and opportunities.”
ITP distribution by Italian Region, and incidence on
total EU Regional Funds available

   Obj. 1     Number    Total Public Funding        ITP % of Total
  Regions      of ITP   for ITP (millions of €)   Regional Program


 Basilicata      8                          330        26,3%
  Calabria      23                          423        11,3%
 Campania       51                        1.576        22,9%
  Molise         7                           63        15,0%
   Puglia       10                        1.102        23,5%
 Sardegna       13                          265        6,8%
   Sicilia      27                          990        13,0%
  TOTAL        139                         4750        16,7%
THEMATIC MAP OF ITPs:
SECTOR FOCUS OF CORE
OBJECTIVES
A new generation of policy tools does
not award incentives directly to firms


-   Lighter policy tools start by
    identifying-legitimizing an institution
-   «State-recognized» institutions act as
    intermediaries of different policy
    incentives, national and regional
Distretti Tecnologici

GOALS
• To induce collaboration within a public-
  private network of firms, regional
  administrations and research centers
• To facilitate che application and
  valorization of results of scientific
  research
• Develop regional innovation systems
  promoting regional specialization
Distretti Tecnologici



• Refer to a specific regional area
• Have a sectoral focus
• are managed by a ltd. Company:
  consortium
• Have also proliferated with many
  sectoral duplicates in different
  regions
I 34 distretti tecnologici
                            ict,                    Edilizia sostenibile (Trento),
                            materiali avanzati,     Edilizia sostenibile (Bolzano)
                            Biotecnologie,
                            agroalimentare                          biomedicina molecolare
                                                                           Navale e nautico

                                                                nanotech
ict - torino wireless
                                                                hi-mech - alta tecnologia meccanica
  Tecnologie marine
                                                                        Qualità della vita e sicurezza nell’abitare
       Sistemi intelligenti integrati
                                                                           Materiali speciali metallurgici
                                   ict & security
                                                                                innovazione sicurezza e qualità degli alimenti
                                                                                     innovazione agroindustriale
                                        aerospazio e difesa                                 agroalimentare
                                                 bioscienze
                                                                                                 meccatronica
                                                   Beni culturali
                                                                                                       high-tech
                                                                                                                   Tecnologie per la tutela
                                          ingegneria dei materiali polimerici                                      Rischi idrogeologici
                                          e compositi e strutture                                             energia
  Biomedicina e tecnologie
  della salute
                                                             logistica e trasformazione                Logistica della trasformazione



                                                                                                 restauro dei beni culturali


                                             micro e nanosistemi                           agrobio e pesca eco-compatibile

                                                       Energia petrolchimica
                                                                             tecnologico trasporti navali commerciali e da
                                                       e ambiente
                                                                             diporto
Recent Policy - Reti d’impresa
/ Contratto di rete

• National business union requested more
  simple and inexpensive forms of
  collaboration for firms to pursue activities
  together
• L.122/2010 introduced enterprise networks
  established through a contract
• Firms sign “Contratti di rete” to take
  reciprocal commitments and saying who
  does what;
• Public authorities recognize the validity of
  this agreement when they award benefits
  of different kinds
In July 2012 ,412 Contratti di rete could be
counted in Italy
Sector Distribution and size of Contratti di Rete
Summing up: Policy Trajectory over time

 Policy evolves:
• from promoting more formalized to
   “lighter” forms of collaboration
• from clearly delimited territorial
   areas, to non-spatial firm networks
• New emphasis research and
   development activities;
• Time horizon of becomes less clearly
   delimited, and the activities more
   open-flexible
What have we learned about producer
          groups-coalitions?


• Within specific territories, supposedly endowed with
  same level of social capital, different groups of agents
  can establish different levels/forms of cooperation;
• Economic agents can establish cooperative
  arrangements or institutions with anti-development
  results
• the degree of openness to external markets and
  knowledge through «developmental intermediaries»
  and other external supporters is key
What have we learned about producer groups?

    Findings more specific to Agri-Food-
                Processing
• Controlling the entire agriculture-processing chain is
  useful to promote and establish product quality (wine,
  cheese)
• Leverage lead-farmers who possess external contacts:
  local small firms lack the wider perspective to perceive
  the possible value of local products on external
  markets --> often benefits extend to small firms;
• An export oriented strategy has to be gradual:
  reputation for product quality has to be established first
  locally.
What we have learned on the
    effectiveness of policies promoting
       productive coalitions-groups

•   Repeated policy experience of firm coalitions
    strengthens trust through positive
    expectations
•   When public resources are at stake, formal
    coalitions of producers can be
    developmental or rent-seeking
•   The leader roles within «Recognized» or
    formalized producer groups has to be
    contendible
Obrigado / Thank You / Grazie




                   tito.bianchi@tesoro.it

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Tito Bianchi - Social capital and upgrading of small enterprise networks

  • 1. Seminario CoCap Porto Alegre 28 09 2012 Social capital and upgrading of Small enterprise networks: what have we learned? Tito Bianchi Evaluation Unit Department of Development and Cohesion Italy
  • 2. INDEX • Social capital, regional development and upgrading of enterprise networks • Italian policy measures and their trajectory • What have we learned from positive experiences
  • 3. Social Capital in social science • Measures of social capital are being assessed -> their relationships with development proven • Indicators used are unsatisfactory proxies; • Social network analyses are increasingly popular -> assess intensity of relations, internal hierarchy, openness of networks;
  • 4. Social capital and regional development policy in Italy Italian literature on Industrial districts of the 1980s- 90s has identified identity bonds and trust as an ingredient of localized small firm development. Sociological literature on (Putnam 1993) identifies civicness as an ingredient of regional development Can cooperative attitude be induced through policy intervention?
  • 5. From positive to normative Districts, filières, firm cooperation, from spontaneous phenomena become categories of policy intervention Firms, associations, branches of government are awarded resources and benefits in exchange for commitment to cooperate
  • 6. Several Policy instruments that aim at inducing social capital in networks of firms have been active in Italy 1997 – 2004 Patti Territoriali 2003 – 2010 Progetti Integrati Territoriali 2005 – today Distretti Tecnologici 2010 - today Reti d’Impresa … all attempts at reproducing the collaborative conditions that make groups of firms collectively more competitive
  • 7. Patti Territoriali to promote local development in Italy financial incentives awarded to a of locally financial incentives to a group group of locally-based firms: integrated investment by based and integrated projects designed plan designed by a coalition of local actors a coalition of local actors “Patto” consisted of a package of grants to firms’ investment and of (up to a max of 30%) infrastructure operations 230 Patti funded, after bidding process, in subsequent generations between 1997/8 and 2001 – total value of 5.5 Billion (current) Euro
  • 8. 1990- Territorial Pacts for industrial development I PATTI TERRITORIALI APPROVATI: DATI DI SINTESI RICAVATI DAI PROGETTI N° TOTALE N° Investimenti Agevolazioni Occupazion iniziative 000 euro 000 euro e a regime Patti con procedura Nazionale Patti 1° generazione 12 434 513.507 371.179 6.984 Patti 2° generazione 39 2.000 3.019.079 1.277.708 21.703 Patti 10-10-99 28 1.021 1.589.236 1.002.745 10.959 Patti 31-12-99 7 254 405.762 164.952 2.217 Agricoli 91 4.977 2.188.395 1.385.765 19.860 Calamità naturali 32 2.178 2.825.677 901.973 14.064 TOTALE Patti Territoriali Nazionali 209 10.864 10.541.656 5.104.322 75.787 PATTI EUROPEI (PTO) 10 2.025 745.710 380.764 8.434 TOTALE Patti Territoriali 219 12.889 11.287.366 5.485.086 84.221
  • 9. Patti Territoriali coverage of the Italian territory
  • 14. 2000-2006 EU regional development Plan introduced in Italy…. Progetti Integrati Territoriali “Composite project for the development of an area, which includes a set of different operations that all contribute, in interaction with each other, to a common development strategy, devised by local actors in response to concrete needs and opportunities.”
  • 15. ITP distribution by Italian Region, and incidence on total EU Regional Funds available Obj. 1 Number Total Public Funding ITP % of Total Regions of ITP for ITP (millions of €) Regional Program Basilicata 8 330 26,3% Calabria 23 423 11,3% Campania 51 1.576 22,9% Molise 7 63 15,0% Puglia 10 1.102 23,5% Sardegna 13 265 6,8% Sicilia 27 990 13,0% TOTAL 139 4750 16,7%
  • 16. THEMATIC MAP OF ITPs: SECTOR FOCUS OF CORE OBJECTIVES
  • 17. A new generation of policy tools does not award incentives directly to firms - Lighter policy tools start by identifying-legitimizing an institution - «State-recognized» institutions act as intermediaries of different policy incentives, national and regional
  • 18. Distretti Tecnologici GOALS • To induce collaboration within a public- private network of firms, regional administrations and research centers • To facilitate che application and valorization of results of scientific research • Develop regional innovation systems promoting regional specialization
  • 19. Distretti Tecnologici • Refer to a specific regional area • Have a sectoral focus • are managed by a ltd. Company: consortium • Have also proliferated with many sectoral duplicates in different regions
  • 20. I 34 distretti tecnologici ict, Edilizia sostenibile (Trento), materiali avanzati, Edilizia sostenibile (Bolzano) Biotecnologie, agroalimentare biomedicina molecolare Navale e nautico nanotech ict - torino wireless hi-mech - alta tecnologia meccanica Tecnologie marine Qualità della vita e sicurezza nell’abitare Sistemi intelligenti integrati Materiali speciali metallurgici ict & security innovazione sicurezza e qualità degli alimenti innovazione agroindustriale aerospazio e difesa agroalimentare bioscienze meccatronica Beni culturali high-tech Tecnologie per la tutela ingegneria dei materiali polimerici Rischi idrogeologici e compositi e strutture energia Biomedicina e tecnologie della salute logistica e trasformazione Logistica della trasformazione restauro dei beni culturali micro e nanosistemi agrobio e pesca eco-compatibile Energia petrolchimica tecnologico trasporti navali commerciali e da e ambiente diporto
  • 21. Recent Policy - Reti d’impresa / Contratto di rete • National business union requested more simple and inexpensive forms of collaboration for firms to pursue activities together • L.122/2010 introduced enterprise networks established through a contract • Firms sign “Contratti di rete” to take reciprocal commitments and saying who does what; • Public authorities recognize the validity of this agreement when they award benefits of different kinds
  • 22. In July 2012 ,412 Contratti di rete could be counted in Italy
  • 23. Sector Distribution and size of Contratti di Rete
  • 24. Summing up: Policy Trajectory over time Policy evolves: • from promoting more formalized to “lighter” forms of collaboration • from clearly delimited territorial areas, to non-spatial firm networks • New emphasis research and development activities; • Time horizon of becomes less clearly delimited, and the activities more open-flexible
  • 25. What have we learned about producer groups-coalitions? • Within specific territories, supposedly endowed with same level of social capital, different groups of agents can establish different levels/forms of cooperation; • Economic agents can establish cooperative arrangements or institutions with anti-development results • the degree of openness to external markets and knowledge through «developmental intermediaries» and other external supporters is key
  • 26. What have we learned about producer groups? Findings more specific to Agri-Food- Processing • Controlling the entire agriculture-processing chain is useful to promote and establish product quality (wine, cheese) • Leverage lead-farmers who possess external contacts: local small firms lack the wider perspective to perceive the possible value of local products on external markets --> often benefits extend to small firms; • An export oriented strategy has to be gradual: reputation for product quality has to be established first locally.
  • 27. What we have learned on the effectiveness of policies promoting productive coalitions-groups • Repeated policy experience of firm coalitions strengthens trust through positive expectations • When public resources are at stake, formal coalitions of producers can be developmental or rent-seeking • The leader roles within «Recognized» or formalized producer groups has to be contendible
  • 28. Obrigado / Thank You / Grazie tito.bianchi@tesoro.it