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Industrial districts in a globalizing world: A model to change or a model of change?

Author

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  • Margherita Russo

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  • Josh Whitford

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Abstract

Industrial districts – and especially industrial districts in Italy – have been put forth as a model of economic development premised on the deep rooting of firms in a local socio-economic system that is both rich in skills and tied into international flows of goods and knowledge. But there is also a sense today that those districts are in transformation, that globalization has put them “on the move.” This has led some to question whether a model that is becoming many models can still in fact be a model. In this paper, we use a study of the Modenese mechanical district – an archetypical industrial district – to examine this “movement.” We argue that when properly understood the Italian districts do still offer lessons that are generalizable to other regional economies. We show that the district in question is changing, and show in particular that there has been a rise to prominence in the district of relatively small multinational firms. These are changes that are not atypical of industrial districts in Italy. We argue that a deeper look at just how the districts are changing makes clear that this rise to prominence has not severed these firms’ ties to smaller firms in the district. Rather, they have drawn upon those relations for essential support both on production and innovation. We also show also that there is a cognizance of this fact in the district, evidenced in efforts to recreate private regional institutions consistent with a district structure “on the move.” Drawing on our these findings, and on a theoretical approach that holds that productive systems in industrial districts are constituted by the multiplicity of interactions between firms, we conclude that changes in the district in question require also changes in the institutions that sustain those interactions, including especially the emergence of “new public spaces” and new “scaffolding structures.” Using the concrete example of a company created to foster collaborative technology transfer among its owner-members, we discuss the nature of the public spaces and scaffolding structures attuned to the needs of a more vertical and fragmented open district structure. We finally consider implications for public policies supporting innovation.

Suggested Citation

  • Margherita Russo & Josh Whitford, 2009. "Industrial districts in a globalizing world: A model to change or a model of change?," Department of Economics 0615, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
  • Handle: RePEc:mod:depeco:0615
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    File URL: http://www.dep.unimore.it/materiali_discussione/0615.pdf
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    Cited by:

    1. Annalisa Caloffi & Federica Rossi & Margherita Russo, 2014. "The roles of different intermediaries in innovation networks: A network-based approach," Department of Economics (DEMB) 0030, University of Modena and Reggio Emilia, Department of Economics "Marco Biagi".

    More about this item

    Keywords

    Innovation policy; local development policies; regional development policies; evaluation management;

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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