The Emilian Model

The metamorphosis of the Emilian Model

What is the future of manufacturing districts?
The debate has gone on for many years between two opposing schools of thought – that are, those who sang the de profundis on districts and traditional products and those who believe that districts can afford to remain equal to themselves – today, are passed by a sort of third way. The latter, indeed underlines its “metamorphosis”.

The district, of course, will continue to have among its constituent elements the vitality of many small firms at the same time connected to each other by relationships of cooperation and competition. However, a new élite of medium size industrial firms is developing – and in some ways it has already developed – the so called pocket multinationals.

These are firms that have reached a certain amount of critical mass in terms of turnover and employment, which are characterized by self-ownership. From a business strategy point of view, among the peculiar characteristics of the winning model, the “innovation of the product” emerges and, more in general, all the intangible assets that are located upstream and downstream of the productive process (R&D, design, brand, customer service, and so on) emerge.

All along, the Carpi District has embodied one of the great Italian competitive advantages: the flexibility of small and medium enterprises.
From the heroic phase of development of the district model (think of the 80’s decade of the last century), in truth, many things have changed in the Italian and international economy.
Think of the new Asian players who have appeared on the global scene, and the technological revolution (ICT) that has profoundly transformed both production and consumption methods. This has generated a profound consideration about the manufacturing industry everywhere in the world.

One point, however, deserves to be highlighted: manufacturing is not something of the past, precisely because most of the R&D activity, innovation and exports, derive from it. What would Italy and Emilia-Romagna be without the manufacturing industry and the Made in Italy production, from fashion to mechanical precision, from tiles to food?

In addition, manufacturing – mind you – not only accounts for its direct contribution to GDP, employment, research activity and exports. There is a kind of multiplier effect that starts from the industry and that influences positively all those tertiary activities that support production (transport and logistics, human resources training, advertising, finance, etc.).

We live today in an age of increasing contamination of the industry with high added value and advanced services. In the Carpi district there is a good concentration of companies that have evolved specializing in these service, along with the evolution of the production chain. And there is room for improvement in both profiles, provided that we fully understand that the key assets on which we must invest are young talents.

One last point. Today, after the very serious global financial crisis, the issue of the real economy has regained positions in the political agenda of all industrialized countries of the West, and Germany has resumed to be a model to look up to. Is it a lesson for us? I think so.

In fact, what is said of the Rhenish capitalism – that is

an open economy with a strong industrial base, whose gross domestic product is about one-third for export, an economy in which welfare and status play a dominant role

(to quote the words of Prof. Siebert, former economic adviser of Chancellor Kohl) – can describe in a very accurate way even our reality.

He defines, in short, that for many decades what has been called the Emilian Model is an organization of economic life that has managed to combine efficiency and equity, growth and social cohesion.
It is fair to remember that despite the turmoil in the international economy mentioned above (the rise of the BRIC and beyond), Italian manufacturing remains the second in Europe after the German one. Our region, along with four other Italian regions, is part of the exclusive club of the 18 major manufacturing regions in Europe, five of which are in Germany.

But you can not fully understand the “Emilian model” if you do not take into account the sense of community, the collective spirit, that here – in this land of ours – is stronger than elsewhere. And that social capital – the ambience of mutual trust and the ability to cooperate – is admired when people come visit, even by the Americans: a capital that has driven to deal with change. Towards which goal?
It is the race to quality (in a broad sense): in production, civil coexistence, taking care of young people. Without this race there is no future, and many of our entrepreneurs are among the first who understood it.

Franco Mosconi
University of Parma, Department of Economics