INDUSTRIAL DISTRICTS AND INTERFIRMCOOPERATION IN ITALY Industrial districts and inter-firm co-operation in Italy Edited by F. Pyke, 0. Becattini and W. Sengenberger International Institute for Labour Studies, Geneva Copyright © International Labour Organisation (International Institute for Labour Studies) 1990 Short excerpts from this publication may be reproduced without authorisation, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the Edi- tor, International Institute for Labour Studies, P.O. Box 6, CH-1211 Geneva 22(Switzerland). ISBN 92-9014-467-X First published 1990 Second impression 1992 The responsibility for opinions expressed in signed articles, studies and other contributions rests sole- ly with their authors, and publication does not constitute an endorsement by the International Insti- tute for Labour Studies of the opinions expressed in them. Copies can be ordered from: ILO publications, International Labour Office, CH-1211 Geneva 22 (Switzerland). Preface This book is a product of research we have been carrying out on the subject of "industrial districts and inter-firm co-operation" since 1987 under the auspices of the "New Industrial Organisation" programme of the International Institute for Labour Studies (IlLS). Over the last three years a large number of scholars from around the world have assisted the IlLS with our studies, participating in our seminars and conferences and writing papers for us. The work of some of these scholars is presented in this book. That of others is not included in this particular publication but we would like to thank all of them for their help. We would also like to acknowledge the help given by Alan Mayhew, Martin Harvey, and others in Directorate X)UII of the European Commission in Brussels. Directorate XXIII has provided valuable financial support for the holding of meetings and the commissioning of papers, including several of the contributions in this publication. Other people whose help we wish to acknowledge include Ximena Subercaseaux for the design of the cover, Christopher Woodall for initial translation work on Chapter 8, Hilary Mueller for typing and Hazel Cecconi for light editing, formatting and proof-reading. Frank Pyke, Giacomo Becattini, Werner Sengenberger Geneva, July 1990 Contributors Ash Amin: Lecturer, Centre for Urban and Regional Development Studies of the University of Newcastle-upon-Tyne, U. K. Giacomo Becattini: Professor of Economics, University of Florence, Italy. Sebastiano Brusco: Professor of Industrial Economics, University of Modena, Italy. Paulo Brutti: General Manager, Confederazione Generale Italiana del Lavoro, Rome, Italy. Franco Calistri: Researcher, Economics Department, Confederazione Generale Italiana del Lavoro, Rome, Italy. Vittorio Capecchi: Professor of Sociology, University of Bologna, Italy. Mark Lazerson: Assistant Professor, Department of Sociology, State University of New York, Stony Brook, U.S.A. Michael Piore: Professor of Economics, Massachusetts Institute of Technology, Boston, U.S.A. Mario Pezzini: Senior Researcher, Nomisma Research Centre, Bologna, Italy. Frank Pyke: Research Officer, International Institute for Labour Studies, Geneva, Switzerland. Kevin Robins: Senior Research Associate, Centre for Urban and Regional Development Studies, University of Newcastle-upon-Tyne, U.K. Charles Sabel: Professor of Political Science, Massachusetts Institute of Technology, Boston, U.S.A. Werner Sengenberger: Head, New Industrial Organisation Programme, International Institute for Labour Studies, Geneva, Switzerland. Fabio Sforzi: Research Fellow, IRPET and Lecturer, Department of Economics, University of Florence, Italy. Michael Storper: Associate Professor, Graduate School of Architecture and Urban Planning, University of California, Los Angeles, U.S.A. Carlo Trigilia: Associate Professor of Sociology, University of Palermo, Italy. Table of contents Preface. Frank Pyke, Giacomo Becattini, Werner Sengenbeger v Contributors vii 1 Introduction. Frank Pyke and Werner Sengenberger 1 History 2 The idea of the industrial district: Its genesis. Sebastiano Brusco 10 3 A history of flexible specialisation and industrial districts in Emilia-Romagna. Vittorio Capecchi 20 Interpretation 4 The Marshallian industrial district as a socio- economic notion. Giacomo Becattini 37 5 Work, labour and action: Work experience in a system of flexible production. Michael J. Piore 52 Empirical studies 6 The quantitative importance of Marshallian industrial districts in the Italian economy. Fabio Sforzi 75 7 Subcontracting in the Modena knitwear industry. Mark H. Lazerson 108 Trade unions and politics 8 Industrial districts and the unions. Paulo Brutti and Franco Calistri 134 9 Small-scale enterprise in the ideology of the Italian left. Sebastiano Brusco and Mario Pezzini 142 10 Work and politics in the Third Italy's industrial districts. Carlo Trigilia 160 x Debate 11 Industrial districts and regional development: Limits and possibilities. Ash Amin and Kevin Robins 185 12 Three responses to AshAminand Kevin Robins: I. Charles F. Sabel replies 220 II.Michael J. Piore replies 225 III.Michael Storper replies 228 1 Introduction Frank Pyke and Werner Sengenberger Whilst economies all over the world in the late 1970s and 1980s set into recession and stagnation, frequently accompanied by serious deteriorations in labour and social conditions, rising unemployment, and insecurity, a few localities stood out as exhibiting a remarkable resilience and even growth. They were engaged in a variety of industries, and included not only advanced sectors but also more traditional, labour-intensive ones, and thereby posed a challenge to those who have argued that such economic activities can no longer succeed in high wage industrialised countries. Thus, places like Oyonnax in France, Jutland in Denmark, Baden-WUrttemberg in the Federal Republic of Germany, Smâland in Sweden, the Barcelona area in Spain, Silicon Valley and around Los Angeles in the United States of America, Cambridge in England, parts of Japan, and areas of Central and North-East Italy, were highlighted as being localised economic constellations that 'were beating the recession'. Many of these were said to have a sufficient similarity in their mode of economic operation to permit them to be categorised under one generic heading: "Industrial Districts". Of particular interest to us at the International Institute for Labour Studies was the claim that such districts could combine both economic efficiency and superior standards of employment, and act as a model for promotion elsewhere. This persuaded us to look further into the subject and to evaluate its potential. Thus was set in motion a programme of enquiry that has involved collaboration with researchers in many industrialised countries. This book, put together by ourselves and one of our collaborators, Professor Becattini, is a product of this ongoing research; it reflects, to some extent, the point we have reached with our enquiry. The focus is on the industrial districts of North Central and North- Eastern Italy; this is partly a reflection of the way our research programme has been organised -acountry by country approach, beginning with Italy - andalso partly reflecting the fact that the districts in this country have been most widely quoted as being amongst the clearest and strongest examples of the phenomenon. Whilst the validity of other areas in other countries to be called "districts" might sometimes be contested, the eligibility of localities in Italy is undisputed. The special status of the Italian cases, then, justifies particular attention. It is an aim of the International Institute for Labour Studies to bring to the attention of the public and policy-makers new ideas and developments in the world of industry and labour. The general significance of the industrial district phenomenon and its broader implications and value for those concerned with promoting economically efficient, yet socially worthwhile, economic organisations, remains to be seen. Nevertheless, we 2 Industrial districts hope that the reader will agree with us that a development has occurred which at the very least should be given very careful consideration. I.What are industrial districts? Without wishing to pre-empt what follows in the book, we feel it is necessary to give at least a brief description of the nature of industrial districts. This we do with some caution, since, as will be clear to readers of our last section, "Debate', the whole question of definition is not without controversy. Most of the controversy, however, appears to relate to issues outside of Italy. There seems to be broad agreement, at least amongst the contributors to this book, on the basic shape of Italian industrial districts. Below we draw out from what these contributors have written some key characteristics. The districts are geographically defined productive systems, characterised by a large number of firms that are involved at various stages, and in various ways, in the production of a homogeneous product. A significant feature is that a very high proportion of these firms are small or very small. As Sforzi points out, most of the districts are to be found in North Central and North-Eastern Italy, with different ones specialising in different products, of varying types of complexity and intended end-use. Thus, for example, Sassuolo, in Emilia Romagna, specialises in ceramic tiles; Prato, in Toscana, is known for textiles;