Description distric new

Industrial Districts

1) Description

Map and updated data

Districts setting up

MKT

Common elements in districts:

• Great Technological knowledge/practical experience

• Production cycles possible to be decompose into their single phases

• Availability/necessity to entrepreneurship

Articulation of Articulation of industrial districtsindustrial districts

Raw materials

Machinery

Semi-finished

SUPPLIERSSUPPLIERS

Trust

Job market

SOCIAL CAPITALSOCIAL CAPITAL

Attitude

Value

Accessibility

Transports

Water purifying

Building land

INFRASTRUCTUREINFRASTRUCTURECAPITALCAPITAL

Banks

Designers

Transports

Agents

PRIVATE SERVICEPRIVATE SERVICE

TYPICAL ACTIVITIESTYPICAL ACTIVITIES

Sub contractors

CUSTOMERSCUSTOMERS

Markets

Schools

Trade associations

SOCIAL SERVICESSOCIAL SERVICES

Services centres

Consortiums

Research

Marketing

ProductionSub contractors

Sub contractors

Districts main features - 1

• central role of the family and job sharing among the family members inherited from the rural society

• common social background and values

• high social mobility and entrepreneurship attitude

Districts main features - 2System of factories with an integrated vertical production cycle and greater division of work among single concern which minimises costs and promotes new businesses

Space contiguity among companies and consolidated relations which favour reduced transaction costs and greater intrinsic reliability

External economies of scale

Constant technical innovation

High specialization in phases and components

High competitiveness among enterprises

Districts main features - 3

Cooperation between enterprises and public bodies about external economies

Weak entry barriers are increasing because of bureaucracy problems

Exit barriers: the artisan can do just one specific task and cannot change his business

Professional and skilled workforce who learn locally

Collective learning (learning by localizing, learning by specializing, learning by interacting

Strong points

Flexibility

Professionalism

High competitiveness between firms

Continuous investment

Important role played by local banks

Co-operation with public bodies

Weak pointsWeak points

Excessive localism and closure to the external world “Death by asphyxia”

Maturity of the life-cycle of the area ( pointed out by slowing of enterprises turnover)

Difficulty to face radical changes and innovation outside the existing technological framework

Lack of guidance and strategies for growth and renovation

Less bargaining power with the distribution system

Competition by countries with low labour costs

Difficulty in reaching new potential growing markets

Problem of generation transfer

Industrial Districts

2) Evolution

• MARKET GLOBALIZATION, process which imposes a planned approach to the market on companies and takes back economies of scale problems, especially those related to research and engineering, marketing and financing

•TECHNOLOGY EVOLUTION, showing the coming-up of new technological paradigms (e-commerce) and rules (quality certifications, safety and environmental rules ), which reflex upon production cycle organization

The new competitive contextThe new competitive context

Districts challengesDistricts challenges

• HUMAN RESOURCES AND TRAINING

• INTERNAZIONALIZATION / GLOBALIZATION

•TECHNOLOGICAL INNOVATION AND NETWORK TECHNOLOGIES

• MARKET GLOBALIZATION, process which imposes a planned approach to the market on companies and takes back economies of scale problems, especially those related to research and engineering, marketing and financing

•TECHNOLOGY EVOLUTION, showing the coming-up of new technological paradigms (e-commerce) and rules (quality certifications, safety and environmental rules ), which reflex upon production cycle organization

The new competitive contextThe new competitive context

Internationalisation /globalisationInternationalisation /globalisation

• Delocalisation of low-costs phases

• Dismantling of traditional network

• New networking and co-business strategies

Relationship modelsRelationship models

Customer

CustomerCustomer

SS SS SS

SS SS SS

SS

SS

SS

SS

SS

SS

TRADITIONAL TRADITIONAL SUPPLIERSUPPLIERNETWORKNETWORK

Supplier

Customer

CustomerCustomer

SS SS SS

SS SS SS

SS

SS

SS

SS

SS

SS

Supplier

CustomerCustomer

SSSS SSSS SSSS

SSSS SSSS SSSS

SSSS

SSSS

SSSS

SSSS

SSSS

SSSS

PSPS

PSPSPSPS

PSPS

INNOVATIVEINNOVATIVE LOCAL SUPPLIERLOCAL SUPPLIER

NETWORKNETWORK

Primary Supplier(Comaker)

Secondary Supplier Customer


Customer

CustomerCustomer

SS SS SS

SS SS SS

SS

SS

SS

SS

SS

SS

TRADITIONAL TRADITIONAL SUPPLIERSUPPLIERNETWORKNETWORK

Supplier

CustomerCustomer

SSSS SSSS SSSS

SSSS SSSS SSSS

SSSS

SSSS

SSSS

SSSS

SSSS

SSSS

PSPS

PSPSPSPS

PSPS

INNOVATIVEINNOVATIVE LOCAL SUPPLIERLOCAL SUPPLIER

NETWORKNETWORK

Primary Supplier(Comaker)

Secondary Supplier Customer

INNOVATIVEINNOVATIVE GLOBALGLOBAL SUPPLIER SUPPLIER

NETWORKNETWORK


Medium St. Dev.

It will be slight 3.1 0.9

It will change districts winners and losers 4.8 1.8

It will change the local dimension of districts 3.1 1.2

It will cause a new aggregation of districts on virtual bases 4.9 2.1

It will cause districts development 5.8 1.5

It will outline new business relations 5.5 2.0

It will outline new relations between customers and suppliers 6.6 1.5

E-commerce impact on the structure/survival of districts

Source: A.Ordanini, Università Bocconi - Club dei Distretti Industriali

Network technologiesNetwork technologies

market market

process process

• to gain visibility• to supply innovative services• continuous trust by customers• turnover increase• enlargement of the market

• to make information easy to get• to make production flexible• to optimise resources

• upgrade of supply quality• reduction of supply time and costs• to increase flexibility• to reduce logistic investment

• virtual shop• marketplace• telecommunication channel • corporate portal• call centre• advance sale• post sale

• eXtended ERP• System Integration • message Broker • outsourcing

• access to marketplace• auctions• supply chain management• exchange• supply advancement

supply supply

Companies /districts targets and solution models

Network technologiesNetwork technologies

From Local Districts to From Local Districts to Global Virtual EnterprisesGlobal Virtual Enterprises

Ind

ep

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den

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ion

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etw

ork

sIn

dep

en

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etw

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sUse of Virtual Enterprise concept for business development:

Intensive use of modern communication technologies

Global Business Integration

Virtual Enterprises

Glo

bal V

irtu

al En

terp

rises

Glo

bal V

irtu

al En

terp

rises

Cairo - 29th June 2000

Industrial districts

3) Policies to development

a) Policies of : development / emersion maintenance of competitive

advantage revitalisation ( strategic

repositioning)

b) Public Policies as support to development and cooperation among local energies and competencies and not as substitute

Industrial politicies for districtsIndustrial politicies for districtsIndustrial politicies for districtsIndustrial politicies for districts

Experience teachesExperience teaches

- districts are not created by a law

- districts are a complex organization phenomenon

which comes from the interaction of social-cultural

and economical aspects

- it is necessary to act on every environment aspects

Who does what?

Districts projects and problemsDistricts projects and problems

creation of a network which involves all important local actors in order to avoid resources waste and to increase intervention efficiency and integration of different components of the internal local system economy

to make local public bodies to be guides, able to act as catalysers and able to strenghthen development strategies for districts


Policy suggestions to createPolicy suggestions to createenvironments conducive to SMEs environments conducive to SMEs

1st level aims at promoting the private SME sector in general

2nd level consists in sectorial -specific actions, aimed at increasing the competitiveness of clusters

3rd level reinforcement of a positive institutional environment

3 LEVELS OF ACTION3 LEVELS OF ACTION


actions for reducing bureaucratic costs and complexity of bureaucratic procedures for enterprises;

actions for providing information about incentive laws for the creation of new enterprises and for investment;

actions for supporting existing or potential enterprises in presenting application models for incentive laws;

actions for providing micro-credits for enterprises and to design guarantee schemes;

11stst level - (a) level - (a)


actions for building up basic infrastructure on the local level, consisting in industrial areas, roads, water electricity, telecommunications;

actions for promoting entrepreneurship from a cultural point of view, and for educating existing or potential entrepreneurs in basic managerial techniques;

actions for providing services to micro-enterprises of the informal sector.

11stst level - (b) level - (b)


actions for promoting local products on foreign markets;

actions for providing local enterprises with information about technology and markets;

actions for training specific strategic human resources for production and business processes;

22ndnd level - (a) level - (a)


actions for promoting networks of SMEs and for setting up collective service activities;

actions for providing temporary management and mentoring for local SMEs;

actions for providing adequate medium-long term financial support, in order to facilitate enterprises to buy new technical equipment, consultancies, etc.;

22ndnd level - (b) level - (b)


actions for increasing the quantity and quality of infrastructure;

actions for creating international linkages for local enterprises, and possibly, joint-ventures;

actions for the attraction of foreign investment in innovative and complementary activities;

22ndnd level - (c) level - (c)


actions for connecting local enterprises to university and research centres and for transferring the results of scientific and experimental research;

actions to reinforce local identity and to stimulate the circulation of information;

actions for promoting international cooperation between institutions and for creating institutional networks at the international level, in order to exchange experiences and to create regional networks.

22ndnd level - (d) level - (d)


the networking of all relevant actors at the local level to avoid dispersion of resources and increase the effectiveness of interventions and the integration of different components of the local economy within the system

generating local leading institutions, which act as "catalysers", able to develop strategic development guidelines for the cluster by involving and coordinating different local actors in policy initiatives to fulfil common objectives.

33rdrd level level

Description distric new

Technology

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