INNOVATIVE CONSERVATISM IN A MATURE INDUSTRIAL DISTRICT: AN ECONOMIC HISTORY OF THE BRENTA FOOTWEAR INDUSTY Giorgio Novello The London School of Economics and Political Science Economic History Department MPhil thesis Supervisor: Dr T.R. Gourvish UMI Number: U200046 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U200046 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 m Liorary British LiOrwy 01 Political and Economic Science INNOVATIVE CONSERVATISM IN A MATURE INDUSTRIAL DISTRICT: AN ECONOMIC HISTORY OF THE BRENTA FOOTWEAR INDUSTY TABLE OF CONTENTS ABSTRACT________________________________________________________ 5 INTRODUCTION______________________________________ .____________ 7 Tables I-IV ..................................................................................................................27 CHAPTER I : Setting the context.........................................................................31 Industrial districts: a model under review .................................................................. 31 Brenta as a study in contrasts ..................................................................................... 45 Different patterns of development in the footwear industry: lessons from Italy and some emerging countries....................................... 48 Fordism versus flexible specialisation in the Riviera: a local East-West divide....... 60 Brenta’s development in the context of the Italian economic history........................69 Some preliminary conclusions and an outline of the following chapters.................. 75 CHAPTER H: The Brenta industrial district from 1898 to 2004........................81 An historical outline....................................................................................................81 The establishment of the first “industrial” footwear enterprise..................................84 The inter-war period...................................................................................................90 The slow transition to the industrial district...............................................................97 The “watershed” of 1969..........................................................................................110 Restructuring and outsourcing .................................................................................. 113 Internationalisation................................................................................................... 121 Conclusion................................................................................................................ 130 Tables V-XVIH ......................................................................................................... 134 3 CHAPTER HI: Brenta’s collective actors and their interaction........................l48 A. Entrepreneurial self-help organisations as a constituent element of the Brenta district: form al”versus ‘informal” co-operation..................................l48 Growth and consolidation of formal self-help organisations in the Riviera.............160 Conclusion......................................................................................... .....................169 B. National and local governments in the Brenta area: necessary evil “White” and “red” political interventions.................................................................172 Peaceful coexistence of incompatible ideologies.....................................................177 Conclusion................................................................................................................185 C. The role of trade unions: employer-employee relationsin Brenta................l88 Two opposite “myths” and a multi-faceted reality ...................................................191 “Lavoro nero”: the dark side of Italian industrial districts.................. ................... 192 Labour conflicts in the nascent district .....................................................................196 Growing but unbalanced unionisation ......................................................................199 Collective labour bargaining.................................................................................... 202 From confrontation to co-operation..........................................................................209 The ambivalent role of (female) domestic workers..................................................210 Conclusion............................................................................................................... 212 Tables XIX-XXXIV ..................................................................................................216 4 CHAPTER IV: transmission of knowledge and institutional co-operation: the Brenta training centre..................................................................................... 232 Introduction........................................................................................ 232 Knowledge transmission and local competitive advantages.....................................234 The Brenta Training Centre: a multi-faceted role .....................................................241 The Centre between 1923 and 1945: first steps of a modest Sunday school ............243 The Centre and the Brenta take-off: peaks and troughs ............................................245 The Centre between further specialisation and new challenges ...............................248 The Footwear Polytechnic........................................................................................253 Local technological innovation.................................................................................256 Conclusion............................................................................................................... 258 Tables XXXV-XXXVm ......................................................................................... 262 CONCLUSION: moving away from the social embeddedness perspective: the central role of Brenta’s entrepreneurship......................................................266 BIBLIOGRAPHY______________________________________ 280 5 ABSTRACT This thesis analyses the Brenta footwear industrial district in North-eastern Italy (800 firms, 15,000 workers, total sales of 1.5 billion Euros). Brenta is considered as a test case to assess the relevance today of the industrial district model. In doing so, particular attention is devoted to some aspects usually neglected by the specialised literature: self-help organisations, unionisation, politics and the public authorities, interaction among local actors. The Introduction underlines Brenta* s path-dependent development and introduces the concept of “innovative conservatism**. Chapter I discusses Brenta’s relevance as a case study in the reassessment of the Italianate version of industrial districts. Chapter II provides an historical outline from the establishment of the first mechanised enterprise (1898). Chapter HI discusses the respective roles of the main local actors. Entrepreneurs’ associations were quite successful over the years but were never able to surmount Brenta’s structural weaknesses (in particular its disproportionate emphasis on manufacture at the expense of other activities including marketing). Trade unions contributed largely to the shaping of the area, although unionisation was mainly an outside-driven development. Brenta’s mixed political affiliation resulted in the novel co-existence of “red” (Communist) and “white” (Christian Democrat) cultures, which offers an interesting example of “civic capital”a la Putnam. Chapter IV analyses the work of the Brenta Training Centre (1923) as an area for co­ operation among the above-mentioned actors. 6 The Conclusion emphasises that Brenta represents a study in contrasts. It remains a conservative area, lagging behind in particular in technological innovation. It has however come closer and closer to the industrial district model, especially through its complex network of institutions drawing upon its “civic capital”. Brenta offers a contribution to the current debate about industrial districts and the ongoing reassessment of the “social embeddedness perspective”, providing a middle ground between the enthusiasm of the 1980s and the growing pessimism of recent years. 7 INTRODUCTION Along the banks of the Brenta Canal The Riviera del Brenta footwear industry began in 1898, with the local firm system gradually evolving into a full-fledged industrial district and still prospering today. In 2004 Brenta employed some 15,000 workers, with approximately 800 enterprises and a handful of self-help organisations. In 2003, total sales amounted to 1.5 billion euros, with exports representing more than 90% of production, accounting for 5% of total employment in the Italian footwear industry and generating 10% of total footwear sales in Italy. Active and capable local entrepreneurs, who were also able to draw significant competitive advantages