1. Budapest, 24 th March 2004 Paola Maccani Head Local Development Initiatives INNOVATION IN TRADITIONAL INDUSTRIES AND LOCAL DEVELOPMENT

2. Emilia-Romagna. Some Indicators 2002 Population 4.059.416 Population 4.059.416 Total labour force53,4% Total labour force53,4% Total unemployment rate3,3% Total unemployment rate3,3% Female labour force42,9% Female labour force42,9% Female unemployment rate5,3% Female unemployment rate5,3% GDP per head (€)30.038 GDP per head (€)30.038 Employees in the manufacturing industry 645,648 Employees in the manufacturing industry 645,648 Manufacturing local units94.817 Manufacturing local units94.817 Manufacturing av. size6,8 Manufacturing av. size6,8 Firms with less than 50 empl. 59,8% (1996) Firms with less than 50 empl. 59,8% (1996)

3. Emilia Romagna positioning Source: Eurostat Archivio Regio European regions ranked for GDP per-head decreasing (class. Nuts 1) 2000 GDP (Meuro) GDP per head Europe=100 1 Bruxelles-capital Region 47.233,9049.331,80218,5 2Luxembourg19.317,5043.803,90194,00 3Hamburg69.443,1040.737,30180,4 4 Ile de France 391.147,4035.509,00157,3 5London241.309,5032.982,60146,1 6Bremen21,144,0031.718,40140,5 7Aland810,3331.507,70139,6 8Lombardia282.097,9031.118,30137,8 9Emilia-Romagna119.506,1030.038,50133,1 10Hessen175.378,8028.981,60128,4

4.  Productive systems well consolidated, dynamic and renowned at international level (mechanical engineering, packaging …) (ER)  Territorial specialization of the work force( ER)  Significant presence of well equipped business parks in a growing phase (EA)  Presence of Universities, Research and Innovation Centres (ER)  Variety of environmental resources and presence of several natural areas (MA)  Centres of tourist attraction with a growing potential (ER, cities, EA, coast; MA (sport …)  Widespread presence of primary as well as of minor historic and cultural assets (ER, MA, EA) Strengths ER = Emilia Road MA = Mountain Area EA = Eastern Area

5. Challenging Aspects  Enhancement of brain circulation  Saturation of industrial areas (ER)  Links between companies and Research System (EA, MA)  Sustainability of mature products exposed to globalisation and competition (ER)  Local productive system not much related to large companies (EA, MA)  Limited diffusion of “networks of companies” (EA, MA)  Inadequate integration of the tourism industry among the coast, the art cities and the mountain eastern areas (EA, MA)  Critical environmental situation mainly in areas where the chemical industry is located (ER, EA)  Zones characterized by a strong hydro-geologic instability (MA)  Difficulties to have access to services (public, business, etc.) (MA)  Depopulation, ageing population (MA)  Entrepreneurial fabric with elements of fragility (EA, MA) ER = Emilia Road MA = Mountain Area EA = Eastern Area

6. PARTICULAR POLITICAL AND INSTITUTIONAL SETTING a) PARTICULAR POLITICAL AND INSTITUTIONAL SETTING:  Regional governments had been established in Italy just a few years ago, devolving them powers in the fields of vocational training, agriculture and artisan production, with the exception of SMEs sector.  The role of employers’ and trade associations, Chamber of Commerce and Trade Unions has been growing in influence, affecting the local policy making.  The competition between national and regional model of government has encouraged innovative policies. PARTICULAR ECONOMIC CONDITIONS b) PARTICULAR ECONOMIC CONDITIONS:  The crisis of large industry and, on the other hand, the growth of small businesses Historical roots

7. Emilia-Romagna: industrial districts PIACENZA RIMINI PARMA REGGIO EMILIA MODENA FORLI’ BOLOGNA FERRARA RAVENNA Machine tools Farm machinery Food processing Textile-clothing industry Upholstered furniture Packaging machines Ceramic products and machines for ceramic industry Shoes Biomedical products Wood –processing machines Mechanical engineering Agro-food

8. Policy of “Real services” Based on the fundamental role played by local manufacturing systems (Textile in Carpi and farm machinery in Modena and Reggio Emilia)  Planning and interventions are conceived to have an impact on a large number of companies belonging to the same sector.  Continuous monitoring of the status of local production systems.  Involvement of all the relevant actors (Local Administration, Business associations, Chamber of Commerce, Trade Unions, etc.) Basic assumptions The policy of 80s

9. ERVET The ERVET System The ERVET System Innovation - Technology Transfer ASTER Construction QUASCO CENTRO CERAMICO Fashion Fashion CITER CERCAL Quality - Technology - Engineering CERMET DEMOCENTER CESMA

10. Quality-Technology- Engineering CERMET Quality Certification and Lab. Testing BolognaCESMA Farm Machinery Reggio Emilia DEMOCENTER Industrial Automation Modena  Laboratory analysis and testing  Process and product certification  Assistance to SMEs in introducing quality control systems  Training  Information and assistance on technology innovation and regulations  Demonstration installations

11.  Growing role of the regional Government on industrial policy matters and on local development thanks to the devolution process  Development of an articulate private or associational sector providing high quality services to companies  Applied research and technology transfer as new needs expressed by companies  Evolution of regional industrial system requiring new reading keys  Growing role of the regional Government on industrial policy matters and on local development thanks to the devolution process  Development of an articulate private or associational sector providing high quality services to companies  Applied research and technology transfer as new needs expressed by companies  Evolution of regional industrial system requiring new reading keys Significant changes in the scenario

12.  Industrial system strongly diversified  Prevalence of mechanical sector in terms both of employees (45%) and of local units  In areas where mechanical sector is prevailing, the dense presence of firms belonging to different sectors and the widespread system of subcontracting relations make it very difficult to identify productive areas with a single predominant product. The whole region could be considered as a broad multi-sectoral district A new reading of the economic system

13. A renewed interest in the debate on Industrial Districts  More balanced growth between the economic and the social components of development  SMEs as vehicle for enhancing endogenous development  Distinctive competencies give fresh weight to competition based on the peculiarities of the local context rather than on cost advantages  Incremental innovation fosters a continuous bidirectional connection with positive feedback among investment, industrial and final goods  Higher degree of evenness in the value distribution - considering the same turnover and value added produced  Labour intensive much more than capital intensive  Not hierarchical productive system Source: Lucio Poma, 2003

14. Local Development Theory  Re-discovering by Social Sciences of territory as the conceptual frame to interpret the human phenomena  By analysing the dynamics of Industrial Districts, academics and practitioners have provided an in-depth understanding of the strategic importance of the territorial/local dimension for the comprehension of economic and social actions  History, cultural identity, local communities, social differences, institutions, accumulation of entrepreneurial know-how, become fundamental factors to explain and “read” the local territorial dynamics in a global context

15. Distinctive aspects defining the development processes  In a territorial context the development processes do not merely respond to economic- financial logics but arise from the synergic action of the socio-cultural structures  The local development of the territorial context is based on the enhancement of its own differences: the whole social actor system is engaged in a process of construction of the territory through bottom up methodologies

16. Preliminaries for a new Player System  Regional Law on innovation and TT in order to encourage partnerships between firms, Universities and public research bodies  ERVET has dismissed the role of shareholder in favour of others (i.e. Universities, Companies, etc.)  ASTER has changed its legal status and shareholders composition  The evolution of Business Service Centres moves towards a full immersion in the market  Only for their innovative activities, the Business Service Centres can have access to public funds through public tenders (in competition with other private and public Business Service Centres) on projects developed in a close connection with the companies

17. The new Player System ERVET TA and support to PA and Local Authorities for Promotion and Improvement of the regional territory ASTER Co-ordination, financing, managing the Network for Applied Research and TT Research and TT LaboratoriesInnovationCentres

18. The Key Strategy DEVELOPMENT OF ENDOGENEOUS POTENTIAL