1 The Emilia-Romagna agroindustry cluster, and the fruit and vegetable chain Alessandro ZAMPAGNA Centuria RIT – Romagna Innovazione Tecnologia General Manager Adriatic Danubian Clustering Udine, 14 February 2011

2 1. The cluster concept

3 NOT top-down planning But Self-originated and self-sustaining concentration of enterprises Fostered by local specialised services and funding The local government does not “create” clusters but helps the start-up and growth of the cluster through a support system composed of funding and especially services Agro-food cluster

4 NOT a simple concentration of food processing enterprises But COMPLETE FOOD CHAIN SEGMENTS MACHINERY AND SERVICES INTEGRATION COMMON ROOTS Agrofood agroindustry cluster

The agrofood sector development : The modernisation of the agrofood sector GROWTH

: The development of the Agroindustry Cluster INTEGRATION Farm machinery Processing machinery Refrigeration plants Packaging Logistics Biotechnologies (in vitro, biological control, fermentation, extractions) Information technology The agroindustry cluster development

The R-EVOLUTION of the new millennium: The fall of agricultural product prices The farewell of the sugar industry La “vanishing” community funds The Transport industry rationalisation The opening international food product market The “media” crisis (BSE, flue, dioxin) Growing strategy differences of the three steps of the food chain: - AgricultureWHAT?What are we going to do? - FoodHOW?How to be more competitive? - MachineryWHERE?Where to look for new markets? The cluster r-evolution ….

The cluster re-engineering ….. The REACTION: The confusion of the farmers Mergers of food enterprises (especially coop) The new non-food chain The internationalisation of machinery enterprises Searching for integrated logistic Which policy for the three segments of the chain? Is it possible to re-integrate the cluster? DOES THE AGROINDUSTRY CLUSTER STILL EXIST?

The cluster re-engineering ….. The 2000s cluster policy :INNOVATION OrganisationTechnology Bigger farms New crops Agriculture Bigger farms New crops New networks New commercialNew processes, solutionsconsumer-tailored products, ICT ProcessingNew commercialNew processes, solutionsconsumer-tailored products, ICT International growthHigh tech MachineryInternational growthHigh tech A POLICY TO INTEGRATE THE CLUSTER? Innovation & Services (information, networks, R&D, finance)

The regional Service Centres Network 10 Regional Administration ERVETASTER Cluster environment Centuria RIT CRPV, CRPA Experimental farms University & Research Centres Training Centres Labs Cluster environment Centuria RIT CRPV, CRPA Experimental farms University & Research Centres Training Centres Labs Cluster A Agricultural farms Coops Processing companies Machinery companies Service companies ….. Cluster A Agricultural farms Coops Processing companies Machinery companies Service companies ….. Cluster B Agricultural farms Coops Processing companies Machinery companies Service companies ….. Cluster B Agricultural farms Coops Processing companies Machinery companies Service companies …..

11 3. The role of cooperatives in Emilia-Romagna agrofood clusters

Emilia-Romagna agricultural gross product amounts at 4,000 millions Euro. More than 50% of the agricultural produce is managed by cooperatives. Cooperatives have had a primary role in the development of the cluster. 12 Agricultural Coops in Emilia-Romagna

FIRST-GENERATION COOPERATIVES «Defensive» objectives: to protect members from market risks and to reduce costs through scale economies “Decision Centre”: Board of Directors, composed of farmers, and Assembly «one head one vote" Evolution: 3Difficulties in maintaining margins 3Develop new higher valued added activities along the chain (new-generation cooperatives) 3Mergers or alliances to obtain greater scale economies How Coops were born

NEW-GENERATION COOPERATIVES «Offensive strategy»: scale economies in activities closer to the consumers (processing, logistics, marketing), in order to get more value added. They try not to sell commodities but higher-value products. Complete vertical integration, to obtain control of the whole chain. Or strategic alliances with companies (even non coops) with synergic expertise. The evolution of Coops

Agricultural prices comes from the market; it is not realistic to think of control the agricultural product price. Value Added is present all along the chain; every step of the chain to the consumer, gets a higher quota of Value Added. To get more Value Added, it is necessary to invest in activities along the chain and get closer to the consumer. Farmer income = agricultural product price + return from the investment along the chain The principles of New-generation Coops

16 Some examples in the fruit and vegetable cluster

Diversificazione e segmentazione

PIU’ GUSTO AL BENESSERE

ricchi di fibre basso contenuto di grassi

Ricchi di: fibre vitamine composti antiossidanti

Il biologico e la tracciabilità

A bridge between the fruit and vegetable cluster and the Mediterranean To foster internationalisation of fruit and vegetable cluster companies in the Mediterranean

27 Italian companies (in majority from Emilia-Romagna) in different businesses of the fruit and vegetable cluster, have decided to cooperate in order to promote their activities in the Mediterranean:  Fresh fruit and vegetable production and marketing  Packaging  Machinery  Services Mediterranean Fruit Company

M.F.C. offices MFC Italy MFC Egypt MFC Tunisia MFC Turkey MFC Russia

32 3. The role of Centuria RIT Romagna Innovation Technology

33 CENTURIA-RIT IS A SCIENCE AND TECHNOLOGY PARK AIMED AT ENHANCING THE COMPETITIVENESS OF THE TERRITORY AND OF LOCAL ENTERPRISES THROUGH INNOVATION It is at the same time: A crossway between institutions, enterprises and research to foster information exchange, technology transfer, contacts. A system of relationships, fed with added value services, to provide better access to knowledge, innovation, markets and capitals. The mission of Centuria RIT

34 The environment sede di Faenzasede di Cesena

35 INNOVATION INFRASTRUCTURES - University Agriculture, Food Science, Engineering, Information Science, Economics, Languages, Architecture, Psychology - Analysis and R&D Laboratories - Research centres - Training centres - Specialised international exhibitions - Available industrial facilities The environment

36 All the innovation infrastructures are present in the territory: No need for new incubators, laboratories, greenfield investments, etc. The need is to increase the relationship between the actors of the territory to increase innovation. Hence the “SOFT” solution:  Public private investment  Majority of private capital  No direct “hard” investment:  “Soft” activities only: networking, information, innovation brokerage, R&D project, etc. The “soft” solution

37 Companies Leading companies Associations of entrepreneurs Banks 65% shares The stakeholders Research & training Local faculties of the University of Bologna CNR, ENEA Research centres Laboratories 0% shares Local government Municipalities, Provinces, Chambers of commerce Local health and environment authorities 35% shares

38 The logical framework INFORMATION AND NETWORK PROJECTS AND SERVICES COMMUNITY Work groups New s Patent & tech monitoring Info Seminars conference s Area marketing R&D Tech Transf Financ e Intangible s R&D Tech Transf Financ e New entrepreneurship Internationalisation Publication s MEMBERS

39 Information flow to the territory Selected information on patents and technology Commercial and joint- venture opportunities Selections of the competencies useful for the territory Relationship inside the territory Between companies, laboratories, R&D centres, university, public administration, financial institutions Meetings, seminars, company open days Management of shared projects: start-ups, R&D, various collaborations Information flow from the territory Area marketing Relationship with investors Common marketing operations 1st activity: relationships network

40 SME Institutions Banks Syndicates of entrepreneurs Universities R&D centres S.T.P. project management data mining market analyses technology transfer research and development business connections new business start up venture capital connections training JV development Big industrial groups 2nd activity: Specialised services

41 Concrete outcomes (projects, funding, patents, new companies, etc.) Satisfaction of the associates Low cost (flexible and light structure) No building (ex. laboratories, incubators), just offices No ad hoc public funding 80% of the investment in professional personnel and Information and Communication Technology The outcomes

42 Thank you