Dott. Luciano Consolati

Section I

Industrial Clusters Development Policies

1

1Description

Industrial Clusters

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Perché occuparsi dei distretti?

• Clusters are an example of development from the basis in the presence of limited material resources

• Clusters are one method of local development that involves most local subjects

• Clusters are cognitive labs with extended and dynamic learning processes

• Clusters - for developing countries - can contribute to the surfacing from poverty of entire local communities extending the level of social belonging

• Clusters represent a form of economic democracy that contrasts with the model of big multinational companies

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Why are clusters of interest?

“Small unknown factories whatever their numbers, are at a great disadvantage compared to large ones, unless there are many condensed in one same industrial district (…) The location of productive units promotes and educates ability and taste and spreads technical knowledge. Where there are large numbers of people dedicated to one same kind of activity they educate each other”

A.Marshall

“Industrial clusters are a local concentration of inter-industrial relations which present reasonably stable characteristics over time (…) A socio-territorial entity characterised by the active joint presence in a limited naturalistic and historically determined area of a community of people and a population of industrial enterprises (…) The community and its enterprises tend – so to speak – to mutually interact.”

Becattini

Arnaldo Bagnasco, “Three Italies. Territorial Problems related to Italian Development” Sebastiano Brusco, “Small firms and industrial districts: the experience of Italy”

Gioacchino Garofoli, “Local Development Problems : Small Enterprises Systems”

Industrial Clusters Introduction

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How is a cluster born

MKT

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Method of Production 1

• System of enterprises with a vertically integrated cycle on a territorial level. Important work division between single enterprises that minimises costs (specialisation economy) and promotes new business opportunities.

• Economies of scale: each enterprise is both producer of inputs and consumer of outputs in the cluster.

• Continuing process of technological innovation

• High level of specialisation by phases and components (learning by doing)

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Method of Production 2

• High horizontal competition between enterprises

• Cooperation between enterprises and public bodies on external economies

• Weak entry barriers

• Strong exit barriers: small entrepreneur knows how to do his work and cannot easily change

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Method of Production 3

A local productive system can be interpreted as an area with a centre that creates

A vertically integrated productive cycle

sub-contractor of semi-finished products

sub-contractor of precision equipment

sub-contractor of workmanship

Assembly sub-contractor

Companies that operate in the final phases of production

Companies that operate in the first phases of production

LEADER COMPANIES

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Method of Production 4

• Outsourcing of surplus• Market Growth

• Production with decreasing unit costs • External purchasing of products

at lower prices• Geographic proximity between enterprises and well-established existing relations

• Reduction of transaction costs and greater reliability

• Outsourcing of diseconomies and of phases not established in an optimal manner

• Lack of balancing in productive processes

“Decisive factors: work sharing

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Method of Production 5

• More professionally prepared workers (“Learning by

doing” A. Smith)

• Saving and optimisation of production phases

• Greater flexibility in the management of production processes

• Development of special machinery for production by other companies, linked to the cluster, that increases results (learning by interacting)

•

Higher Productivity Level

Advantages resulting from work division

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Mechanical Manufacturing

Thermic Treatments

The Productive Cycle of “Sistema Lumezzane”

Fusion

Stamp Construction

Raw Materials

Cleaning of Metals

MKT

Leading Company

Orders

Final Product

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Productive line of non-ferrous metals

Foundry Refinery

Taps/Fittings Valves Door Handles Fastenings

Mechanical Manufacturing

Assembly

Raw Materials: chipboard, scraps

Finished Product

Shearing of burrs, Piercing, Boring, etc

Cleaning Polishing, Shining, Burnishing, etc

Degreasing

Burrs, CylindricalBilletts

Other internal workmanship (cutting to

cold, etc)

Pressed piece

Fu

sio

n (

ele

ctric

ove

ns)

Fu

sio

np

ress

ing

Threa

ds, s

ectio

n ba

rs e

alum

inium

and

bra

ss

draf

ts

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Stamping to cold

Preliminary detersion

Cleaning

Productive line in Steel Transformation

Superficial finishing

Semifinished: plates, billetts, steel sections

From Outside the

Area

Finished Product

Funneling

PicklingRinsingDrying

With milling machines, emery , etc D

ott.

Lu

cian

o C

onso

lati

– 0

9.20

05 -

Mex

ico

The Main Distinctive Charateristic

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The first product of a cluster is its capacity

to transfer the entrepreneurial spirit to its

people. These become the players in their

own economic growth process and in their

social achievement.

The Industrial Cluster Model

Four groups of key factors:

• Location and space

• Social and cultural

• Economics and organisation

• Institutional

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Location and Space Factors

• Geographic proximity and sectorial specialisation

• Small urban dimension

Reduction in transportation and transaction costs

Circulation of information and responsibilities

Lower work and land costs and stronger social cohesion

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Social and Cultural Factors

Stable Human Capital

• Family’s central role and work division between family members as a legacy of a rural society

• Mutual and shared social values

• High level of social mobility and aptitude to entrepreneurship

• Faith as a key issue in the system of economic relations

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• Possibiliy of reaching high levels of specialisation

• Balance between cooperation and competition

• Labour specialisation as a “public asset” (safekeeper of common knowledge)

Combine economies of scale and of purpose

Collective learning (learning by localizing, learning by

specializing, learning by interacting

Possible co-operation (stability, long term, know-how

exchange)

Economic and Organisational Factors

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Political and Institutional Factors

• Support role in the construction of clusters, key role in supporting development and innovation

• Participation especially at a local and/or regional

level (both with public and private or mixed

bodies)

Regional agencies, service centres,

entrepreneurial associations, consortia

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Species of Capital

ECONOMIC CAPITAL

SYMBOLIC

CAPITAL

INTELLECTUAL

CAPITAL

HUMAN CAPITAL

SOCIAL CAPITAL

Creation and valorization processes and transformation of forms of capital are the base of a competitive advantage

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Anatomy of a cluster

Raw materials

Machinery

Semi finished

SUPPLIERS

Faith/Confidence

Labour market

SOCIAL CAPITAL

Aptitude

Value

Accessibility

Trasport

Water purification

Building area

MATERIAL CAPITAL

Banks

Designers

Trasports

Agents

PRIVATE SERVICES

TYPICAL ACTIVITIES

Subcontracting CLIENTS

Markets

Schools

Category associations

COLLECTIVE SERVICES

Service centres

Consortia

Research

Marketing

ProductionSubcontracting

Subcontracting

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