The role of clusters in the rise of the Third Italy – Luce In Veneto
by Klára Gurzó
When we talk about clusters and the forces that created them Silicon
Valley is used as the most obvious example. The role of newly established
networks and social capital are emphasized in the process of cluster creation.
However, the very similar forms of firm cooperation and economic activity can
evolve through the networks of traditional families and industries. The
industrial districts (distretti industriali) of Northeast Italy are very good
examples of the latter type of connections.
The traditional economic center of Italy is the Northwest regions of the
country (region of Lombardy, Piemont, Ligune, etc). While the other parts of
the country struggled in the 1960’s, the Central and Northeast regions started
to use their advantages. The region has high market potential because it is
close to the developed part of Europe and Italy, and it is close to the sea
that supports lower transportation costs. The rapid industrialization process
started that time made the “Third Italy” (Tuscany, Umbria, Marche,
Emilia-Romagna, Veneto, Friuli, and Trentino-Alto Adige/Südtirol) the most
prosperous part of the country. Agglomeration processes supported the growth of
the region through the connection and cooperation of the densely located small
and medium sized companies and the knowledge accumulation based on the
universities in the region. The industrial districts clustered by labor
intensive, manufacturing industries. These
districts are territorial agglomeration of firms, specialized by product type
and interpersonal links which circulates information and facilitate diffusion
of innovation. The covered small firms could respond flexibly to the changes of
economic environment and specialize on certain parts of the production process.
The economic development of small companies was not independent entirely. From
1965 the Sabatini Law financed companies to buy machines, tools and other
equipments. The object of the law was individual companies.
Veneto region has the third highest total GDP among Italian regions. It is one of the two
regions where the most industrial districts can be found. The
population of the region is around 4.8 million people and almost 10 percent of
them are immigrants. Today, the percent of immigrants is one of the highest in
the country while before the World War II high out-migration characterized it. The
city’s population is still increasing today due to the large number of
immigrants. The economy was largely based upon farming. In the 1960’s and
1970’s rapid industrialization started and since the mid 1980’s the labor
market is characterized by almost full employment and a positive rate of job
creation. The districts cover the traditional economic sectors such as food
products, wood and furniture, leather and footwear, textiles and clothing, gold
jewelry, but also chemistry, metal-mechanics and electronics.
The government realized the economic power of districts therefore they
decided to support the launch and operation of them. For the first time, in
1989 country level rule helped the local clusters, especially export-oriented
ones. After this one many other policies were introduced to support clusters
locally. However, Veneto emphasized the role of interregional connections therefore
they launched a regional level policy that financed project based cooperation
between firms.
These policies drove the emergence of numerous forms of tight
cooperation across firms for example the LUCE IN VENETO SCARL Consortium. The region involves 500 companies that
operate in the lightening industry and they have 5000 employees. The Consortium
involves 50 companies that have close to 700 workers. This is a typical
production cluster that integrates the participant firms vertically. The
Consortium has one or two larger member but most of the firms are small, family
owned firms. These are typically handcraft firms that design and produce
special, individual lights. The main aim of the consortium is to help firms to
compete with multinational, low priced products. There are three main common
activity of the consortium. They use common transportation and sales channels and
packaging technology to decline their transport costs. Moreover, they cooperate
with universities (for example with Padova University) and make common research and development
activities. The design of the lightening, the safety packaging and the strong
and impact resistance glass are all essential parts of the competitiveness of
these firms. Therefore technological innovation is gradually determines the
success of the firms. Finally, they organize training sessions to inform the members
from the latest rules and technology, fashions and so on.
The rise of Third Italy is very good example of the forces of New
Economic Geography because the location, distribution and spatial organization
of economic activities determined the economic development of the territory
basically. We saw that clusters of traditional, family owned small firms can be
the basic of agglomeration. However, recent times it seems that the order of
agglomeration forces (high wages vs high productivity) tends to change places
and high wages cause serious problems in the region. Some actors outsourced
their production to low wages countries already. If the production labor
intensive industries tend to leave the region, other activities have to be
strengthened locally.
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