Bergamo University Evaluation Methods and Impact Analysis of Public Actions Supporting Local Development — The Cases of Canavese — North Italy — and P.A.C.A. — South France. Economics and Technology Management PhD Thesis Serena Novero Supervisors: Prof. Secondo Rolfo January 2009 1 CONTENTS I. THE PROLEM IN THE LITTERATURE: TEORICAL FOUNDATION Pg. 5 OF THE WORK - 1. Introduction to the work - 1.a. The analyzed cases II. METHODOLOGY Pg. 21 - 1. The statistical-descriptive methodology - 2. The Regression models - 2.a.The Hausman test - 3. The Probit model - 4. The Propensity Score matching model - 4.a. The control group identification III. THE CANAVESE CASE Pg. 37 - 1. The history - 2. The interventions of Canavese technological district Consortium - II.2.a. The Centres of Competence - II.2.b. The problems determination and the technical solutions - 3. The projects - T.S. - PIA01- 02 - 03 - DIADI IV. THE CANAVESE RESULTS Pg. 53 - 1. The data - 2. The descriptive - statistical analysis: - 2.a. Canavese economical evolution 2001/2008 - 2.b. Firms which agreed to one project only - 2.c. Firms which agreed to more than one project - 3. The Econometric results - 3.a The data - 3.b. The Regression models: Random models - Profit model - Sales model - Ebitda model - Employees model - Added Value model - Labour Productivity model - ROE model - 3.c. The Probit models - Better / Worse Probit model - Impact Effect Probit model - 3.d The Propensity Score Canavese matching models 2 - T.S. impact - P.I.A. 01 impact - P.I.A. 02-03 impact - DIADI impact V. THE PACA CASE Pg. 117 - 1. The PACA economic evolution 2001 / 2007 - 2. The Competition Poles - 2.a. French CP projects: the process of creation and financing - 3. The SCS Pole VI. THE PACA RESULTS Pg. 133 - 1. The data - 2. The descriptive - statistical analysis: - 2.a. Firms which agreed to one project only - 2.b. Firms which carried on more than one project - 3. The Econometric results - 3.a. The data - 3.b The Regression models: Fixed models - Profit model - Sales model - Gross Operative Margin model - Employees model - Added Value - Labour Productivity model - 3.c. The Probit models - Better / Worse Probit model - Impact Effect Probit model - 3.d. The Propensity Score PACA matching model VII. THE COMPARISON Pg. 161 - 1. The Canavese case - 2. The PACA case - 3. The comparison - 3.a The regression model results - 3.b The Probit model results VIII. THE CONCLUSIONS Pg. 175 REFERENCES Pg. 179 ENCLOSED TABLES Pg. 193 3 CHAPTER I: THE PROBLEM IN THE LITERATURE: THEORETICAL FOUNDATION OF THE WORK Although the positive world growth expectations existing in the middle of the 2007, the existence of old structural elements of crisis, due to the lack, in our economy, of an opportune firms competitiveness and an adequate productive capacity, has been highlighted by the successive economic world evolutions, that have touched quite all the Countries, and by the still existing growth rate differentials, also recognized by the International Monetary Fund (Zanetti, 2007). The Italian answer and challenge to the current economical decline has been the rising of a new organizational capacity, showed by the old economical subjects, and of “new” operators, more innovative and oriented towards high technology productions (Rolfo, 2007; Zanetti, 2007). They have been often embedded in local networks structures, mostly composed by several SMEs and some big units and research institutes. The large presence of small and very small units, usually active in the computer, high-tech, mechanical and aerospace sectors, but also belonging to the manufacturer and traditional ones, has increase their economic power and their market role of technological driving force for the growth of our economic system (Antonelli, 1986; Marshall, 1890, Zanetti, 2007). These small firms have often been the local answer to unemployment problems and have assumed a central role in their solution, earning favour conditions in the central policy interventions. This mechanism has asserted, in our Country, the micro-size organizational model as a possible solution for a flexible economic development: in this picture, the structural lack of big units, that usually have economic coordination roles, and the several firms micro-crisis have underlined the over quoted competitiveness difficulties and the small units limits: the lack in them of an adequate innovation propensity and of an opportune rate of investments in innovation, due to the large infrastructures required, to the necessary economic capacity, to the financial autonomy needed and to the risk propensity requested, has led to the “well known” SMEs problem (Zanetti, 2007). It’s explainable with the over-quoted low risk propensity, with the innovations suspiciousness and with the consequent under-investment rate that have led the local small units to a significant loose of competitiveness in the national and international markets and to be in a weaker position, although their high sectorial diversification. The high riskiness and the low appropriation rate of the investments in innovation, existing at firm micro level, cut down their appeal and often the small and medium units prefer to follow imitative strategies, with quick reverse engineering actions (Franzoni, Vitali, 2005) and vertical integration processes (Zanetti, 2007), instead to invest in innovation. Although the high quote in our economy (greater than in the other world Countries) of public funds allocated to sustain the SMEs private research, the mechanism just explained has led to a decrease 4 of their competitiveness and of their central economic role, of innovation and employment trainers (Garofoli, 1999). The whole of these potential crisis different factors is basically tied to the knowledge problem, where this last has the character of a public or semi-public good, with mostly tacit characteristics (Antonelli, Calderini, 1999) and discourages strong quotes of investments. The low satisfaction, in the market mechanisms, of the equilibrium between the knowledge demand and the supply (because of its low rate of appropriation, its no rivalry in the consumption, the high level of externality (Mansfield, 1968) and the financial markets imperfections, due to information asymmetry), makes the private incentives lower than the optimum social level. This mechanism has often driven some European local economies to deep innovation gaps, that must be overcome to be competitive in an international context. This element with the systematic difference between the public and the private yield rate of innovation investments (Nelson, 1959; Arrow, 1962) are the principal argumentation justifying the public interventions in the market, direct to sustain the SMEs competitiveness and technological innovation. Next to these reasons, it’s possible to find other motivations, as the so-called “market failure paradigm” (Bozeman, 1997; Jacquemin, 1987), that leads again to a substantial underinvestment in the knowledge production, because of the economic systems weakness, typically due to continuous innovation process in the market without a public correction (Calabrese, Rolfo, 2006), and as the externalities phenomenon, that rises when the subjects are not able to appropriate of all the economic and commercial benefits connected to the innovative investments made (Mansfield, 1968). In this context, most of the local governments have started to supply technological collaborations: they aim to increase the number of developing initiatives (Hall, Van Reenen, 2000) that lead to knowledge economies . These last have become a paradigmatic framework, within which proposals for new industrial and economic development policies can be designed, based on an increase of the local productivity, thanks to the faster technological change in the productive processes. These economies are characterized by the presence of firms addressed to product and processes innovative changes, to interactive learning processes (Cappellin, 2007) and to the acquisition of new technical and organizational competencies: the whole of these factors create, in the production and in the innovative processes, privileged positions for the key actors and new strategic factors, that have lead the observed economies to acquire a central role and to be supported in their birth by different local and central governments actions. In this framework, Zanetti G, Frigero P. and Boffa F., in a study on the central factors of the Italian competitiveness (2007), suggest a central solution against its decrease is to be concentrated on products with an high added value, instead of with lower production costs, and this is the basic idea behind both the Italian and French policy initiatives considered in the following work. The over-quoted products are usually made in large word economic chains, that are often characterized by specific local cross point, on which the new innovation policies should bet. The first origin of the innovation policies lies in the industrial policies, because of the growing importance of the technological innovation for the firms competitiveness, that has forced the classical governments to face the technologies changes and the connected problems. In the first step of this process, the innovation policies have been carried on through the classical support to the investments, but from the 1980s, most of the governments of the industrialized Countries have become conscious of the weakness of these initiatives and have then adopted a 5 range of diverse instruments, that essentially