1
Made in Italy morphology, role and economic
data on industrial districts

• Prof. A.Sinatra
  
  a.a. 2011/2012

2
The performances of the Italian industrial system

• Italy shows exceptional performances in the
  fields of consumer products such as textiles,
  clothing, footwear, eyewear, furniture and
  interior design, that economic theories were
  reserved for countries with low production costs
  (labor).
• The numbers are impressive
• 40 of the global exports of the ceramic industry
  comes from Sassuolo
• Biella and Prato rule the wool industry with a
  quarter of the world exports
• The women's hosiery of Castel Goffredo controls
  the 40 of the global exports
• 15 of the world exports in the following
  sectors silk (Como), jewellery (Arezzo and
  Vicenza) eyewear (Belluno), marble (Carrara).

3
..a paradox!

• The tie between these goods and their innate
  Italian characteristics (their Italianism) does
  not only reflect the life-style, but also the
  product of a particular road to an industrial
  development, which draws its strengths from
  local institutions, social networks,
  organizational forms and entrepreneurship, which
  history lies in the sediment of the Italian
  industrial districts.

4
Made in Italys 4A
The industries where the Italian economy has
peaks of excellence may refer to three basic
systems and the mechanic-automation specialized
industry in support of each one of them. From
this interpretation comes the expression "Le 4
del Made in Italy (Made in Italys 4A)
Fashion
mechanic-automation
Food
Forniture
5
The Italian industrial structure

• Is there a typical Italian business model?
• The Italian industrial structure includes
• A small group of very big companies with a long
  tradition history, deeply rooted in some
  important families (Agnelli, Pirelli, Falck,
  etc.) supported by financial institutions
  (MedioBanca, Assicurazioni Generali, etc.).
• A group of big companies formerly controlled by
  the italian government supervision (now
  privatized or in a privatization process) as
  Telecom Italia, Enel, Finmeccanica, which aspire
  to become global corporations.
• A dynamic system of SMES that cater mostly to
  foreign markets, specializing in the typical
  fields of the Made in Italy and operating within
  the industrial districts.

6
The Italian industrial structure the
classification schemes 1/3

• What is the meaning of large, medium or small
  enterprise the employment policy
• In Italy we consider the following levels
• Small companies lt 50 employees
• Medium companies 50 lt employees lt 500
• Large companies gt 500 employees
• According to the European Union
• Small companies lt 50 employees
• Medium companies 50 lt employees lt 300
• Large companies gt 300 employees

7
The Italian industrial structure the
classification schemes 2/3

• What is the meaning of large, medium or small
  enterprisethe mixed method
• Used by the office of the Studi Mediobanca e
  Unionacamere (2004)
• Small companies 1-49 employees and less than 13
  mil turnover
• Medium companies 50-499 employees and 13lt
  turnover lt 260 mil
• Large companies more than 500 employees and
  more than 260 mil turnover
• According to this classification the small
  companies represent the 62 of value added in the
  manufacturing industry, the medium ones the 14
  and the large ones the 24.

8
The Italian industrial structure the
classification schemes 3/3

• The large companies the classification of
  enterprises according to the Edison Foundation
• It adds specific levels of turnover to the
  occupational requirement
• Grandi Pilastri (big pillars) companies with
  more than 10 billion turnover
• Pilastri(pillars) companies with turnover
  between 2 and 9,99 billion
• Colonne(columns) companies with turnover
  between 0,5 and 1,99 billion
• Italy has only 4 Grandi Pilastri 22 Pilastri
  and 86 Colonne. But only 43 are part of the 4
  sectors of excellence of the Made in Italy

9
The Italian industrial structure of Made in
Italy 1/2

• The Made in Italy typical sectors do not include
  any Grande Pilastro, 5 Pilastri and 36
  Colonne.

LUXOTTICA
BARILLA
MERLONI
FERRERO
BENETTON
10
The Italian industrial structure of Made in
Italy 2/2

• Basic role of SMEs for the manufacturing italian
  industry
• 90,7 employment
• 77,6 export
• The majority of these companies is located in the
  so-called "industrial districts

11
Examples of industrial districts in the
textile-fashion sector..

• The footwear of Asse del Sempione or of Vigevano
• The wool clothing of Prato and Biella
• The knitwear of Carpi (MO)
• The eyewear of Belluno
• The silk of Como
• The sport shoes of Montebelluna (TV)
• The womens hosiery of CastelGoffredo (MN)

12
Examples of industrial districts in the
interiors-furniture sector..

• The kitchens of Pesaro
• The furniture of Alto Livenza (PN)
• The sofas of Matera, Altamura and Santeramo
• The interiors of Brianza

13
Examples of industrial districts in arts..

• The dolls of Canneto sullOglio (MN)
• The gold jewelry of Arezzo, of Valenza Po or of
  Vicenza
• The glass of Murano
• The musical instruments of Cremona or
  Castelfidardo (Marche)

14
Examples of industrial districts in ornamental
materials..

• The marble of Carrara
• The slate of Lavagna (Liguria)
• The ceramics of Civita Castellana (VT)
• The marble and granite of Valpolicella (VR)
• The granite of Gallura
• The fired roof tiles of Possagno (TV)
• The ceramic tiles of Sassuolo
• The porphiry of Val di Cembra (Trentino)

15
Examples of industrial districts in food
products..

• The truffles of Acqualagna and Alba
• The ham of Parma or of San Daniele (Friuli)
• The sheep products of Thiesi (Sardegna)
• The preserves of Nocera Inferiore (Campania)
• The olive oil of Imperia.

16
Industrial districts in Italy
17
The third Italy..
18
Italian Industrial Districts..
This economic model is known as the industrial
district a limited territorial system where a
rich permeation has been created over time
between the daily life and the production
activities of its inhabitants. Drivers a)
historical and natural heritage b) artisanship
path dependency c) agglomeration of firms d)
close community e) interplay between society and
business.
19
Italian Districts in the World..

• Industrial Districts are present not only in
  Italy. They have been identified in Japan, USA,
  Germany, France, Spain, Portugal, Denmark,
  Sweden, Brazil, Mexico, India, even if
• the Italian case has stimulated an international
  debate, involving not only academicians, but also
  politicians and entrepreneurs, and imposing
  itself as a development model worldwide.
• The economic role played by the Industrial
  Districts in the Italian economy is evident in
  the light of their relevance with respect to the
  manufacturing industries as a whole.

20
Recent picture of Made in Italy..

• Made in Italy and typically Italian industrial
  districts are still the wealth of this Nation,
  but in order to maintain such wealth it is
  necessary to react to the global competition and
  internal weaknesses with appropriate strategies.
• Until 1990 the global market for Made in Italy
  symbols was growing at a rate of 10 per year.
  This was an almost-paradoxal situation since
  demand was higher than the offer.
• Among 1996 and 2000 Made in Italy had again a
  sort of golden age, but the new millenium has
  started with a deep crisis for typically Italian
  productions. 2003 has been so far the worst year
  in competitive terms on a global scene.
• As showed in the following data, today, Made in
  Italy has to face important and urgent strategic
  issues

21
Todays Strategic Issues of Made in Italy 1/2

• Is the average Italian company size (small) an
  impediment to the overall development and growth
  of the system?
• Is the model of industrial districts still
  capable of generating a competitive edge
  worldwide?
• Is the specialization of Italy in traditional
  industries (the paradox of Made in Italy)
  sustainable in the long run?
• Whether and how Italy may overcome a Made in
  Italy anchored on traditional industries?

22
Todays Strategic Issues of Made in Italy 2/2

• Can Made in Italy still shift the basis of its
  competitive advantage from material
  (manufacturing) to immaterial elements (style)?
• After 40 years of absolute leadership in
  traditional sectors, Italy is facing a new
  competition coming from low-cost countries.
• District companies in the Made in Italy
  industries are excellent in continuous
  incremental product and process innovation, but
  they face difficulties in sustaining RD
  projects.

23
Made in ItalyNational Observatory Report 2012
Italian Regions

• Prof. A.Sinatra
  
  a.a. 2011/2012

24
Districts of Observatory summary of the most
important phenomena from the Report III

• The Report 2011 showed the alternation of a
  brief revival and some structural problems in the
  regions.
• Some positive signs, such as the increase in
  turnover and export, are very important but the
  forecasts for 2012 still do not portend the start
  of the recovery.

25
Districts of Observatory summary of the most
important phenomena from the Report III

• However, what matters is once again the ability
  of the regions not only to face the permanent
  recession, but also to anticipate the trends and
  to show the capacity for interrelation and
  cooperation between businesses, as a way to
  attract investments, to get to new markets and to
  reach sustainability.

26
Districts of Observatory summary of the most
important phenomena from the Report III

• Strategic vision of the regional business
  returning again to eco-compatibility not only by
  investing in the production level but also by
  inserting specialized staff
• The "green way" is not an imposed cost or a
  stratagem but a characteristic element of the
  production processes, the driving force to
  increase competitiveness required in order to get
  to the international markets.

27
Districts of Observatory summary of the most
important phenomena from the Report III

• The grow is not only caused by the new
  investments in innovation but also by a cultural
  shift that starts, first of all, from the
  entrepreneurial class and the major players
  operating in the local dimension.

28
Districts of Observatory summary of the most
important phenomena from the Report III

• "We must think about the manufacturing industry
  - so important for a country like Italy - more
  than in terms of sectors of industries or
  individual companies, as a reality of localized
  industries that makes significant part of its
  competitiveness from the happy union of a
  production structure with a historical,
  infrastructuring and cultural consolidation in
  the long term.
• (Becattini, Sole 24 Ore December 29, 2011)

29
The industrial districts in numbers
The numbers of Italian industrial districts
-Years 2008 and 2009
30
Industrial districts exports and markets
Main sales markets of the district companies in
2010 and in 2011 (in of the total of the
respondent companies)
31
Industrial districts investments
Investments by the companies in the district (in
of the total enterprises)
32
Industrial districts investments
Reasons why the district companies intend to ask
a bank loan in the first six months of 2012 (in
of the total enterprises that intend to ask
credit resources, net of non-responses)
33
The competitive model of the district systems
Market strategies followed by the District
companies in 2012 (in of the total enterprises
multiple answers)
34
Industrial districts profitability
35
Industrial districts today a perspective
Districts evolution of turnover ( change in
turnover median values)
36
Industrial districts today a perspective
Districts evolution of the margins and rotation
rate of capital invested (median values)
37
Industrial districts today a perspective
 NET operating margins in of turnover (median
values)
38
Industrial districts today a perspective
Districts evolution of ROI and ROE (median
values)
39
Districts in a stronger growth January-September
2011 (expressed in )
40
Export per sector of the 101 main Italian
manufacturing districts towards EU countries
January-September 2011
41
Industrial districts today innovation and
internationalization
District and district business not according to
the indicator of innovation (val.)
Imprese distrettuali e non, e processi di
internazionalizzazione (val. )
42
Strategic Issues of Made in Italy
Q A ?
Prof. Alessandro Sinatra
A.A. 2011/2012