A RGU M EN TA 0 E C 0 N 0 M 1 C A No 1-2(14)2003 PL ISSN 1233-5835
I. ARTICLES
G iuseppe Calzoni*, C ristina Montesi*, C ristiano Perugini*
TERRITORIAL PARADIGMS OF COMPETITIVENESS
IN INTERNATIONAL MARKETS:
REGIONAL AND SUB-REGIONAL EXPORT
PERFORMANCE OF UMBRIA, ITALY.
A LOCAL DEVELOPMENT PERSPECTIVE
T h e goal o f the paper is to investigate the regional and sub-regional competitiveness o f U m bria (N uts II region in Central Italy) on international markets through one o f its traditional measures: export performance. The innovative methodological aspect o f the research lies in com plem enting the analysis carried out referring to the regional administrative boundaries (spatial approach) o f U m bria through the application o f Porter portfolio techniques, with a sub-regional analysis using territorial units (Local Labour System s) determined according to a functional criterion, able to approxim ate properly the existing social and economic sub-regional (territorial) differentiation.
T h e em ergence o f sub-regional areas o f strong co m p etitiv en ess in international m arkets o th erw is e invisible using an ag g reg ated spatial approach, to g eth e r with the existence o f a m u ltip licity o f organizational d im en sio n s at a territorial level, su g g est the necessity o f jo in in g the d ifferen t (regional and su b -reg io n al) levels o f analysis in o rd e r to increase the efficien cy and effectiveness o f public policy intervention. This su g g ests that de-centralizing policy d esig n and implementation to R egional Authorities w ould not be enough if the actual territo ria l articulation of the area co n sid ered is not appropriately taken into account.
K e y w o rd s : export perform ance, local developm ent, local system s
INTRODUCTION
In the present fram ework of globalization of economic activities, competitiveness is assuming a prominent role both in theoretical terms and in the process of codification of effective policies and entrepreneurial actions. In this debate, among others, many aspects related to innovation, flexibility and technological progress are normally underlined with variable emphasis. For instance, the role of development, innovation, and quality standard policies is often stressed, while the importance of export performance as a competitiveness
indicator is most of the time neglected due to the fact that a rapid growth of exports is not usually sustainable in the longer run (Irfan U1 Haque, 1995, p. 2).
W e can however oppose this view considering that from the very beginning o f economic theory (A. Smith), both the division of labour and enlargem ent o f markets (hence, opportunities of growth fo r exports) have been underlined as the two basic engines of economic progress. It is not difficult to observe that technological progress and globalization could be considered the present manifestation of these two developm ent conditions. And as a matter of fact it can be emphasized that growth rates of international trade higher than production dynamics have been one of the distinctive regularities of econom ic progress from the industrial revolution onwards (Isfan U1 Haque, 1995, p. 3). Consequently, investigating exports as a com petitiveness indicator is both opportune and suitable, since in the global m arkets both technological progress and the quality of products are necessary, but may be not sufficient, requirements for an adequate rate of developm ent if new markets are not continuously accessed and exploited.
The aim o f this paper is to contribute to the investigation of the significance of competitiveness both at spatial (Umbria N uts II region, Italy) and regional level (sub-regional socio-economic local system s), using local firms export performance indicators. The basic theoretical reference behind this research is the peculiar developm ent model of Italy, essentially based on the role o f small and medium enterprises (SMEs) often clustered in restricted geographical areas. Their capacities o f innovation via dense systems of relations (outside the firm but inside the local system ) have traditionally allowed the overcoming of som e structural disadvantages due to reduced dim ension. The Italian experience shows the m ultiplicity of forms of capitalism and firm com petitiveness sources, not necessarily linked to a large dim ension; and the prominent role played by external organizational (besides produce and process) innovation capacity (Schumpeter, 1951, p. 66) of local contexts (system s of firms, netw orks, etc.). In this context research is still young, but the promising possible outcomes in terms o f economic, social, cultural and political (that is hum an, in the most com plete sense of the word) progress, strongly encourage follow ing the marked way.
A fter recalling the basic theoretical background about the local/territorial potential determ inants of com petitiveness, in the first part of the paper the most recent features of region Umbria export is depicted, focusing particularly on the Central and Eastern Europe C ountries as the area of destination. In the second part after briefly discussing and describing the proper methodological tools for a local developm ent perspective, the
instructive case of sub-regional Umbria territories is em pirically deepened. Some final remarks close the paper.
1. THE LOCAL DIMENSION OF COMPETITIVENESS
As recently underlined by Bronzini (2000) the structural characteristics of the Italian productive system (high incidence of S M E s specializing in traditional industries) have historically represented an im portant matter of debate am ong economists. On the one side, those m ore strictly linked to the m ainstream neoclassical theory that considered the tw o features as sources of w eakness, especially in international (com petitive) markets, where stronger innovation and diversification capacity (or low er unit costs) are requested and may not be achieved below a certain productive scale. On the other hand (Becattini 2000a, p. I l l ) , without the support o f a theory equally w idely-accepted, but with an overwhelm ing evidence o f facts (the greater part o f Italian exports deriving from SMEs steadily com petitive in certain international markets), a new body of theory has been taking place, aware of the potential weaknesses o f SM Es, but also of their possible com petitive advantages due to the existence of a set of external econom ies. In other w ords, escaping the trap of the marginalistic approach w here the problem o f m inim al unit costs is resolved exclusively inside the firln (Becattini 2000b, p. 179), the firm becomes an interactive element of a socio-econom ic system, w here productive material and immaterial inputs peculiar and unrepeatable can be draw n up, as the observable outcome of an historical social, cultural, econom ic, institutional developm ent process. Thus, w hile large firms grow inside them selves by accum ulation processes, SM Es can grow outside (but around) themselves by com petitive/cooperative aggregation. And the distinctive features of a territory can potentially assum e the role o f com petitive advantages for the firm belonging to, and w hich are part of, the territory itself. For instance, as recently recalled by Becattini and M usotti (2002) in the case of local contexts with a strong relationship density (relevantly systemic), as the industrial districts (B ecattini, 2000c, pp. 57-78), they can take the shape of external organizational econom ies, favouring the decom position and re-com position of the productive process inside the system and guaranteeing in the meantime the advantages of specialization and flexibility; of econom ies o f (tacit) know ledge and learning, able to encourage different processes o f innovation, harbingers of com petitive advantages; of concentration (in the phase of input purchase); of training,
not only w ith reference to labour force specialization, but more generally to the local human and social atm osphere (entrepreneurial attitudes, for exam ple): o f transaction, that is relative to the fluidity o f circulation of inform ation affecting the cost of use of the market; of adaptation to reality, referring to the capacity of the actors to take the responsibility of belonging to the district and reproducing its features in the general interest.
O f course, leaving the instructive, but peculiar, case of the industrial district, the existence of certain types of economies disappear or fade and new forms emerge, according to the human, social and institutional features of the territory and of the local system. Which, case by case, match other more traditional sources o f competitive advantage internal to the firm (scale economies), or referred to conditions historically underlined by the theories of industrial localization: low cost of productive factors due to relative availability; proximity to sale markets (Von Thunen), qualitative and quantitative features of demand of a certain area (central localities o f Christaller, Losch, Isard); low transportation costs for raw materials and finished products (Weber); up to the combination of all these factors with others of historical nature, synthesized by Krugman (1991) in the centre-periphery model, but recurring to the role of external Marshallian economies (in particular related to the labour market). The role o f agglomeration economies in generating competitive advantages has been recently underlined with reference to the strong spatial concentration of some important industries (wine, software, caipets), by Rosenthal and Strange (2003).
The Italian economic history (especially after the second world war) is a mosaic o f different development patterns often based on peculiar attributes of the contexts where production takes place, able to be translated into com petitive advantages spendable also at international level, gambling on the capacity o f differentiation (even personalization) o f products able to fulfil clusters of needs increasingly diversified and articulated. This means that if the effective determinants o f the competitive dim ension of Italian exports are to be investigated, the analysis should take into due account an adequate territorial dimension, able at least to distinguish the belonging of different actors to different types o f socio-economic contexts.
2. THE DYNAMICS OF UMBRIA’S FOREIGN TRADE AND EXPORT GEOGRAPHIC DESTINATION IN 2001
The recent increase (1.4%) of Um bria exports value in the biennium 2000- 2001 confirm s the positive trend that has been continuously characterizing the
foreign trade of the area during the period 1997-2001. Together with the increase o f exports at current prices, exports in real value increased by 5% from 2000 to 2001. In addition to the positive dynamics o f export (1.4%), imports recorded a more than compensating decrease (-2.9%), so that the trade credit balance o f Umbria improved by 14%. The reduction o f imports also induced an im provem ent (from 134% in 2000 to 140% in 2001) o f the export capacity to com pensate the imports value. The main trends of U m bria exports in the biennium 2000-2001, with regards to their geographic orientation, can be examined considering four areas o f destination: Europe, the Mediterranean area, the Arab countries, the countries outside Europe.
Table I
T he geographic destin atio n o f U m bria’s export in 2001 (nom inal value)
A reas % c h a n g e 2000/2001 % s h a re 2000 % sh a re 2001 E urope EU -0.1 58 57 EU accession 26.3 3.8 4.7 E astern Europe* 17.1 9 10 EFTA -10 4.1 3.7 M editerranean M aghreb* 15.3 1.3 1.4 M editerranean countries* -3.3 4.4 4.2 A ra b countries A rab countries* -7.1 4.1 3.8 O P E C -26.6 2.6 1.9 O utside Europe O E C D -1.1 77 75 N A FTA -8.2 17.7 16 M ERCO SU R -13.6 1 0.8 A PEC 1.2 22 N IC ’S 45.8 1.4 A SEA N 99.8 0.5 0.9
Com m ercial Union of Andes 6.5 0.2 0.3
*Nolc: The Eastern Europe countries include: Romania, Poland. Former Yugoslavia (Serbia/M ontenegro, Slovenia, Croatia, B osnia, Macedonia), Russia and the o th er independent Republics o f the form er USSR, the Czech and Slovak Republic, Hungary, Bulgaria, Rom ania. Maghreb: Tunisia, Algeria, M orocco, Egypt, Libya. M editerranean countries: (in addition to M aghreb countries) Turkey, Jordan, Israel, Lebanon, Malta, Cyprus, Syria, Palestine. Arab countries: (in addition to Maghreb countries) Jordan, Lebanon, Syria, Palestine, the U.A.E, Saudi Arabia, K uw ait, Qatar, Iran, Iraq, Oman, Bahrain, Y em en.
S o u rce: Istat (Italian Central Institute o f Statistics), C oew eb on lin e Statistics
From table 1 we may notice a variegated trend of “neighbours export” (an increase o f Umbria’s commercial flows towards M aghreb, but a reduction towards OPEC, Arab and Mediterranean countries) and also of “proximity export” (a decrease towards European Union and EFTA , an enlargement
towards the EU accession and the Eastern Europe countries). To this articulate trend corresponds a similar dynamics of Umbria’s intercontinental export. The “long-distance” trade is in fact characterized by a declining regional export value towards North America (NAFTA) and South A m erica (MERCOSUR) excluding the Commercial Union of the Andes, but at the same time by an export increase towards NIC, ASEAN and APEC countries. Umbria’s commercial loss towards the O ECD area can be ascribed mainly to the decrease of C anada and EFTA, in addition to that of the European Union, Australia, the United States and New Zealand.
M ore particularly, as regards Europe, we observe:
• a weak reduction of exports towards the EU (-0.1 %) which, anyway, still remains the most important market for Umbria’s products with a share of 57% on the total regional export in 2001 (58% in 2000);
• a remarkable expansion of exports (+17.1%) towards Eastern European countries, whose incidence rises from 9% to 10%;
• an increasing commercial integration with the EU accession countries (+26.3%), whose incidence rises from 3.8% to 4,7%;
• a small reduction of exports towards the remaining continental Europe, EFTA (-10%), whose incidence falls from 4.1% to 3.7%.
3. UM BRIA’S EXPORTS
TOWARDS EASTERN EUROPEAN COUNTRIES
The true commercial “revelation” of the biennium 2000-2001 were Eastern European countries who, unlike EU and EFTA, considerably increased (+67 billions o f Italian Lire equal to 32 millions of euro) their purchases from Umbria. Umbria’s exports towards these countries grew from 393 to 460 milliards o f Italian lire (from 202 to 237 millions of euro), enlarging its share on total exports from 9% to 10% (in 1985 it was only 6%). All the Eastern European countries contributed, except Albania (showing a reduction of 3.7%), to the Umbrian export increase o f 17% towards the area.
The most dynamic countries have been, in order o f importance, Hungary (+94.8%), former Yugoslavia (+32.5%) mainly for the contribution of Slovenia (+53.8% ) and Serbia (+22.2%), Poland (+18.8%), Bulgaria (+11.0%). At lower levels were the contribution o f Romania (+7.8%); Russia and the other independent Republics of the form er Soviet Union (+4.0%) among which R ussia’s reduction (-18.8%) has been more than counter-balanced by the increase of the Ukraine (+66.2%); and former Czechoslovakia (+1.4%), mostly
because o f the performance of the Slovak Republic (+55.0% ) rather than the Czech Republic (-23,6%).
In 2001 Umbria’s most important market within Eastern Europe was Romania, receiving 28% of regional exports of the area, followed by Poland (22%), form er Yugoslavia (18.4%), Russia and the other independent Republics of the form er Soviet Union (12.3%), former Czechoslovakia (8.1%), Hungary (7.7%), Bulgaria (2.7%), Albania (0.8%).
In 2001 Romania’s share of the total of Umbria’s export was 2.8%, Poland’s 2.2%, form er Yugoslavia’s 1.9% (Serbia 0.8% and Slovenia 0.4%), Russia and the other independent Republics of the former Soviet Union 1.2%, Former C zechoslovakia’s 0.8% (equally shared between C zech and the Slovak Republic), Hungary’s 0.8%, B ulgaria’s 0.3%, Albania’s 0.1 %.
The group of EU accession countries includes m any Eastern European countries already examined (Poland, Hungary, C zech Republic, Slovak Republic, Slovenia), but also M alta and Cyprus, in addition to the Baltic republics (Estonia, Lithuania, Latvia). Consistently with the other Eastern European countries, the Baltic republics have increased, all together, their purchases from Umbria from 3 to 5 thousand million o f Italian liras (+101%), mainly through Estonia (+602% ), Lithuania (+79.5%), Latvia (+36.7%); but they have only absorbed 0.2% of Umbria’s exports in 2001.
4. FOREIGN TRADE STRUCTURE O F UMBRIA
TOWARDS EASTERN EUROPEAN COUNTRIES IN 2001
U m bria’s foreign trade seems, to some extent, to respond to the “theory o f
comparative advantages“. In fact Umbria imports, from som e Eastern European
countries, natural resources or raw materials (primary chemical products from Serbia and from the Czech Republic, non-ferrous base m etals from Russia, peat from Latvia and Lithuania) in exchange for its fashion products (leather in the case o f Serbia, shoes and clothes in the case of Russia), machines and equipm ents (Latvia, the Czech Republic and Lithuania), and wood products (Russia).
For other Eastern European countries (Poland, Slovenia, Albania, the Slovak Republic) an “inter-industry trade” takes place between traditional industries (textiles, food, agriculture) or more technological sectors (machines and equipments, chemicals, metallurgical and metal mechanical industry).
For some of the Eastern European countries (Rom ania, Serbia, Hungary, Bulgaria, Ukraine), the share o f “intra-industry trade” is a very relevant portion
of the total amount of commercial exchanges for some specific products. This “horizontal trade” indirectly proves the considerable experiences of productive de-localization of Umbria’s firms in these countries, as evidence of an increasing productive (and not only commercial) integration. As regards Romania, the exchange between import-export of iron and steel products accounts, in the global trade of Umbria, with a positive sign, for a share of 21 % (while knitted goods 29%, clothes 26%, shoes 21%, but all with a negative sign). The same happens with Serbia for shoes with a negative share of 24%; with Hungary for iron and steel products with a positive share of 26%; with Ukraine for clothes (+) 12%; and Bulgaria for rubber products (-) 30% and shoes (-) 12%.
5. UMBRIA’S PROCESS OF INTERNATIONALIZATION TOWARDS EASTERN EUROPEAN COUNTRIES:
STRATEGIES AND POTENTIAL
Some strategic suggestions can be proposed to the private or public sector concerning the future prospects o f Umbria’s process o f internationalization towards the Eastern European countries. This can be done through the “position/evolution matrix” of the Eastern European countries receivers of Umbria’s exports, in order to deduce the competitive position of each country in the regional foreign trade fram ework in 2001. This matrix is an innovative application of the “rate of growth/share of market” matrix conceived by M. Porter as a simple technique to be utilized (as far as all the different business areas o f a multibusiness firm have been brought back to a single portfolio) to control the different activities and to decide the alternative destination of the financial resources (Porter 1980).
This analysis can support, with sufficient objectivity, both firms decisions about different processes of internationalization to be engaged, and policy makers choices in financing promotional measures or supporting private (or public/private) initiatives.
This matrix consists of two elements: a per-cent growth o f Umbria’s exports to each country from 2000 to 2001 (measuring the m arket developments of these nations) and a per-cent share o f every country in U m bria’s total export in 2001 (measuring their market share).
Fixing, with an unavoidable level of arbitrariness, the thresholds of high, medium and low growth, and high, medium and low m arket share (we assume that low incidence or low growth is up to 5%. Medium incidence or medium
growth is between 5% and 10%. High incidence or high growth is above 10%). Thus, w e can easily obtain a matrix, which can be divided into nine sub-squares (Figure 1).
% share o f every country on Umbria’s total export in 2001
HIGH MEDIUM c3 ?o e
8
. w % > f— O 5 HIGH LOW BULGARIA HUNGARY SLOVENIA SERBIA SLOVAK R. I! POLAND UKRAINE ' BALTIC R. KONTAN.A MEDIUM LOW TO BE PRIVILEGED TO BE MAINTAINED TO BE CUT OUTOvsr 10%
Between 5% and 10%
U
dto 5%
CZECH R. ALBANIA RUSSIAF ig . 1 Position/evolution m atrix o f Eastern European c o u n trie s receivers o f U m b ria’s e x p o rts in 2001
G e n erally speaking, all the countries with a low m ark et share and low or n eg a tiv e growth should be discouraged from any private or public strategies o f internationalization. On the contrary, all th e countries with a high m ark et share, even if they show low or negative grow th, should be m aintained. Similarly, those with a medium m arket sh are, but with low or negative grow th; and those w ith a low market share, but with medium grow th, should be m aintained. Finally, all the c o u n trie s with a low m arket share, but high grow th, those with high m ark e t share and high grow th, and those with m edium m arket share and m ed iu m growth, should be p riv ileg ed .
A c co rd in g to these criteria, in the case of Eastern E u ropean countries, one can deduce that, from a com m ercial point o f view , it would be necessary (Figure 1):
• to privilege Hungary, P oland, Bulgaria, S erbia, S lovenia, Slovak R epublic, Ukraine, the Baltic republics since they are characterized by high g ro w th rates of U m bria’s exports, but low in cid en c e on U m bria’s total ex p o rts;
• to m aintain Romania, becau se it is a country characterized by a m edium grow th rate of U m b ria’s export, but low in cid en c e on U m bria’s total ex p o rts;
• to cut out Russia, A lb an ia and Czech R epublic since U m bria’s exports tow ards them are decreasin g , and represent a sm all share of the total.
If we com plete this analysis considering the m acroeconom ic estim ates and p ro jec tio n s concerning the real GDP, the real internal dem and in 2003 (O E C D 2002) and reckoning with the rating o f E astern European co untries according to their solvency capacity (M o o d y ’s and Standard and P o o r’s, 2003), we can co n firm all the strategic suggestio n s supplied by the m atrix ; the only exception being the Czech R ep u b lic, which could be su stain ed , rather than left out, show ing a good rate o f growth of real G D P and real internal dem and and a strong reliability o f paym ent.
W e can enrich this analysis with a rating o f E astern European countries according to the pre-conditions of grow th and to the effective engine o f grow th (W arner 2002; C ornelius-W arner 2 0 0 3 ). A ccording to these in d icato rs, the countries seem ing more inclined to foreign trade with U m b ria are Hungary, S lovenia, the Slovak R ep u b lic, the Czech R epublic, since they are already open to in tern atio n al trade and ch arac te rized by a good am ount o f export per inhabitant. D ifferent forms of p ro d u c tiv e de-localization seem m ore favoured in H un g ary (because o f
the good conditions for firm s start-up, the g o o d quality o f public adm inistration, lack of co rru p tio n , good educational system , good rule o f law , presence of in frastructures, low taxes), but also in Poland (good co n d itio n s for firms start-up, good educational sy stem , good rule of law ), in S lo v en ia (good educational system, good rule o f law , good quality o f p ublic adm inistration, lack o f corruption, low red c a rp e t in the sense that se n io r m anagem ent spends little time dealing w ith governm ent officials, and th o se adm inistrative regulations are not b u rd en so m e), in the S lovak R ep u b lic (good quality o f public ad m in istratio n , infrastructures end o w m en t, good ed ucational system ), and in th e C zech Republic (good ed u catio n al system, low red carpet, infrastructures endow m ent).
If we add to this eco n o m ic and geographic v iew , a specific analysis abo u t the growth and im portance of U m b ria ’s export-oriented m an ufacturing industries w ith regard to the sam e co u n trie s, we can attain to a m atrix of the in d u stries and markets o f E astern Europe with low com m ercial power. T his m atrix includes the co u n trie s that are to be m ain tain ed together with the industries with a m ed iu m or high incidence on U m b ria’s export to w ard s these same c o u n trie s in 2001; but w hich have revealed them selves to be decreasing from 2 0 0 0 to 2001. S tarting from these criteria, this m atrix will contain R o m an ia with iron and steel p ro d u c ts and leather, in additio n to the Czech R epublic with dom estic eq u ip m en ts and plastic m aterials.
T h e matrix of the in d u stries and markets o f E astern Europe with a m ed iu m com m ercial p o w e r includes the co u n trie s which are to be m ain tain ed together with the industries which h av e a m edium or high share o f U m bria’s exports tow ards these sam e co u n tries in 2001, but w hich have shown low g row th from 2000 to 2 0 0 1 . This matrix will in clu d e the Czech R epublic w ith vegetable and an im al oil.
T h e m atrix of the in d u stries and markets o f E a ste rn Europe with high co m m ercial power includes the countries to be ad v an tag ed together w ith the industries which have a m edium or high sh a re o f U m bria’s export to w ard s these same co u n tries in 2001 and which g ain ed a low or m edium or high growth from 2000 to 2001. So in this m atrix will be Hungary w ith iron and steel products, o th e r iron products, a g ric u ltu ral products, general m achines, domestic eq u ip m en ts; Poland with c lo th e s, textiles, artificial fib re s, dom estic equipm ent, special machines, v eg e ta b le and animal oils, p ip es; the Slovak R epublic w ith electronic en g in es, o th er metal products, p lastic m aterials; S lov en ia with iron and steel products, clothes, agricu ltu ral products.
6. TOOLS FOR A TERRITORIAL APPROACH: THE LOCAL LABOUR SYSTEM
T h e need to identify an adequate territorial u n it of reference, co n sisten t with the aims o f giv in g due priority to the effe c tiv e articulation of d ev elo p m en t and of overcom ing the traditional sp atial partition on the basis o f adm inistrative units, has stimulated sch o lars to attem pt a lte rn a tiv e functional m apping.
F rom this point of view, the Local Labour S ystem s (L L S s) identified by Istat (1997) in Italy, have extensively been tested and accepted by a w ide lite ratu re as the best av ailab le proxy of the te rrito ria l articulation o f Italian econom y and society. T he LLS, belonging to th e w ider category o f the tra v e l to work areas (T T W A ) is defined as th e area where “the
m a jority o f resident p opulation can fin d (or ch a n g e ) a jo b w ithout changing its residence; and w here the employers can rec ru it the m ajority o f w o r k e r s “, generating a com plex network o f d aily house to work
m ovem ents. So the LLS is com posed of two or m ore contiguous co m m u n es (the smallest adm in istrativ e units in Italy) w here a relative high d en sity of relationships am ong socio-econom ic actors do exist, ap p ro x im ated by the com m uting o f residents, under th e assum ption that labour p lay s a central role in hum an life and is also ab le to structure other relevant and meaningful social, econom ic, cultural ac tiv ities of people. The LLS can thus be considered as an area of re la tiv e institutional and socio-eco n o m ic hom ogeneity, with a co n sid erab le degree of com pactness/cohesion, and liab le to draw the b o u n d arie s of a local society (and a territory) as the outcom e of an ev o lv in g process of e n v iro n m en tal, physical, social, cultural and econom ic interacting forces (P erugini-M usotti 2001). T he m ap of LLSs currently av ailab le refers to data co llec te d in the 1991 cen su s of population, sin c e the new data elab o ratio n (2001) has not been published. The use o f the 1991 LLSs does not represent a decisive lim it for the follow ing em pirical analysis: firstly b ecau se the export data used refers to 1996; secondly because a map o f sub-regional territories can be considered re la tiv e ly stable over tim e, u n less dram atic change (so cial, economic, in fra stru ctu ral) do occur.
T he ca se study considered in this paper, U m b ria, represents (G rohm ann 1989) a very instru ctiv e example of an adm inistrative unit h isto rically interested by a m ultiplicity of local dev elo p m en t paths.
A c co rd in g to the 1991 ce n su s data, Umbria is a rtic u la te d in 16 LLSs e n tire ly falling inside its adm inistrative space (e ig h t com m unes on the b o u n d arie s with Tuscany and Latium belong to ex tra-regional LLSs); p ro p e rly depicting the com plexity of existing local developm ent traje cto ries. Rural Alta V a ln e rin a, almost exclusively projected to exploit the eco n o m ic potentials o f its gastronom ic, cu ltu ra l and environm ental am en ities; the Alta V alle del Tevere, a fro n tie r of the light industrialization model very clo se to the model o f industrial districts; M ed ia V alle del Tevere, co m p o sed of sub-regional com ponents (the area a ttra c te d by the most im p o rtan t urban centre o f th e region, Perugia; a su b -sy stem specialised in a rtistic pottery production, D eruta; and another local sy stem of furniture p ro d u c ts with district fe a tu re s, M arsciano); the to u ristic territories of T ra sim e n o Lake, the d ep o sits o f traditional agro in d u strial products of S poleto and Fabro (olive o il), O rvieto (wine), able to ca p tu re im portant flow s o f tourists attracted by the art towns o f U m b ria; and finally, but not exhaustively, the are a o f traditional heavy in d u stry o f Terni, now u n d erta k in g important e v o lu tio n s in a post-Fordist d irec tio n (M ontesi, 2002).
7. TERRITORIAL EXPORT PERFORMANCE OF UMBRIA
T h e use o f a unit o f an a ly sis o f a functional n a tu re as LLS allow s in clu d in g in the analysis the com plex set of fe a tu re s o f a p la ce, even though not considering them explicitly. In other w o rd s the choice of this d ista n c e o f observation o f eco n o m ic phenom ena co rresp o n d s to realize and id en tify the socio-econom ic boundaries of te rrito ria l differences able to in flu en c e behaviours and perform ances.
In the following analysis, and with reference to exp o rt com petitiveness o f territories o f the region U m bria, the target is to draw an essentially descriptive picture of the structural characteristics underlying this com petitive dimension. Even though no causal effects are estim ated through the use of regression analysis, the outcomes allow hypothesizing the existence, even inside a sm all region, of a very diversified set of organizational structures, inside or around the firm , behind export perform ance.
T he solidity of LLSs as units o f analysis is w itnessed by a relatively large am ount o f data produced and referred to this territorial level. Among the
latest publications, Istat (2002) has provided data concerning export perform ance in the year 1996, com bining information available in different statistical archives (COE-external trade and A SIA -firm s operating in industry and services), reaching a sufficient degree of statistical significance and reliability, being able to attribute to LLSs 92.5% of dom estic exports of m anufactured and processed products. The data used in this section of the paper refer to processed and manufactured products (classified in 2 letter sub-sections of Ateco 91 classification, corresponding to the NACE Rev. I subsections of the m anufacturing division D) exported by firms of the 16 LLSs o f Umbria region in 1996. The building of export indicators at local levels significantly contributes to shed light on the local competitiveness determ inants of certain local systems compared to the whole regional perform ance, traditionally considered relatively weak.
Indeed in 1996, Umbria contributed to Italian exp o rts less than one per cent (0.89% ), and showed a p e r w orker exported value (in liras) far below the Italian average (0.67, assum ing as 1 the average Italian level). The region does not emerge significantly above the Italian average if sector specialization is considered (Source: Istat, Coeweb, on-line statistics on external trade). On a sectoral level Umbrian exports in 1996 are largely specialized in chemical products and synthetic and artificial fibres processing (26% of the total), textile and clothing (18% ) and rubber and plastic processing (16%). T he food and beverage and the mechanic products industries respectively cover a significant 9% and 7%. But neither the subdivision in sections o f the manufacturing industry is able to raise the perform ance of the regional export, system atically below the Italian average, except for wood and wood products and for chem ical products and synthetic and artificial fibres. Local entrepreneurial organizations tend to ju stify the weak regional perform ance especially in som e sectors (i.e. textile and textile products and m echanics) explaining th at a large share of U m brian m anufacturing firm s do not operate directly fo r the final market, but rather as sub-contractors of extra-regional larger firms, well com petitive on international level. This feature w ould consequently hide and underestim ate the local com petitive positions.
A part from this kind of caveats, does the evidence o f data mean a real w eakness of Umbria’s com petitive position on international markets, or an incom plete/im proper perspective o f observation? T he follow ing table starts to answ er this question.
Table 2
LLSs export perform ance* in the m anufacturing su b -s cc tio n s (1996)
DA DB DC DD DE D F DG DH Dl DJ DK D L DM DN Total Assisi 0.41 0.89 2.53 0.06 0.40 0.00 0.20 0 54 0.03 0.10 1.26 0.03 0.39 0.17 0.48 C ascia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 C. d e l L a g o 0.00 0.16 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 1.10 0.00 0.00 0.17 C .C astello 0.12 0.44 0.36 0.76 0.19 0.00 11.88 0.07 0.46 0.02 1.07 0.26 0.23 0.02 0.40 Foligno 0.07 0.26 0.56 0.02 0.34 0.00 0.01 0.02 0.45 0.04 0.91 0.18 0.05 0.77 0.33 G. T adino 0.02 0.00 0.04 0.54 0.07 0.00 0.06 0.02 1.35 1.46 1.37 0.02 0.00 0.71 1.39 G ubbio 0.04 0.03 0.00 0.51 0.06 0.00 0.04 0.02 0.23 0.13 0.22 0.08 1.17 0.21 0.09 M arsciano 0.00 0.55 0.25 0.61 0.00 0.00 0.00 0.04 0.12 0.06 0.07 0.01 0.00 0.89 0.25 N orcia 0.66 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.25 Perugia 0.82 0.71 1.85 3.92 1.69 0.00 1.78 0.35 0.46 0.40 0.63 0.27 1.93 0.11 0.61 Spoleto 6.08 0.31 0.19 0.00 0.06 0.00 14.10 0.49 0.10 0.12 0.31 0.20 0.02 0.05 0.75 Todi 0.32 0.43 0.00 0.68 0.02 0.00 0.01 0.01 0.01 0.96 0.15 1.50 0.00 0.01 0.35 U m bertide 0.15 2.34 0.00 0.07 0.01 0.00 0.00 0.68 0.12 0.82 0.84 2.08 0.70 0.03 1.07 Fabro 5.20 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.99 O rvieto 1.01 0.28 0.00 0.00 0.01 0.00 0.00 0.00 0.02 0.04 0.75 2.08 0.00 0.00 048 Terni 0.81 1.27 0.31 0.09 0.12 0.06 0.56 4.72 0.49 3.10 0.51 2.13 13.18 0.74 1.29 Um bria 0.70 0.65 0.83 1.54 0.45 0.01 0.69 0.91 0.50 1.71 0.63 0.56 0.24 0.29 0.62 Perugia 0.65 0.61 0.80 1.68 0.50 0.01 0.72 0.26 0.51 0.42 0.64 0.42 0.20 0.22 0.47 Terni 0.90 0.89 1.33 0.79 0.09 0.00 0.68 4.66 0.42 2.92 0.60 0.91 12.56 0.57 1.11
* E x p o rt value (in liras) per e m p lo y ed in the LLSs (or region) / E x p o rt value (in liras) per m p loyed Italy
DA - Food products, beverages and tobacco DB - T extile and textile products
DC - L eather and leather products DD - W ood and wood products
D E - Pulp, paper and paper products; publ. and printing D F - C oke, relined petroleum, nuclear fuel
D G - Chemicals, chem. products and man-made fibres DH - R ubber and plastic products
Dl - O ther non-metallic mineral products DJ - Basic metals and fabricated m etal products DK - M achinery and equipment n.e.c. D L - Electrical and optical equipm ent DM - Transport equipment
DN - M anufacturing n.e.c.
A ll L L S s except N orcia an d C ascia (the m o u n ta in o u s areas o f the re g io n ) perform better than av erag e at least in o n e m anufacturing sp e c ia liz a tio n . A significant num b er of LLSs sh o w per labour unit ex p o rts fa r higher than the n atio n al average in d iffe re n t sectors: five out of 15 in the food and b e v e rag e and in electric and o ptical equipm ent p ro c e ssin g industries; fo u r in the metal p ro d u cts and in m echanic secto r; th ree in textile and te x tile products, c h e m ic a ls and fibres, and tra n sp o rt equipm ent. Terni and Perugia LLSs p e rfo rm above average re sp e c tiv e ly in 7 and 6 se c to rs out of 14, U m b e rtid e in 4, G ualdo T ad in o and Assisi in 3.
A p a rt from the position o f the two more urban L L S s (Perugia e Terni) re p resen tin g also the histo rical dualism of d ev e lo p m e n t patterns in U m bria (the first one centred on the traditional m a d e in Italy products (B ra calen te , 1986), and the second still relying on th e heavy industry trad itio n al sectors, but trying to re-em erge, in a p o st-F o rd ist sense, from the crise s of the public en terp rises era (M ontesi, 2002)), particularly in tere stin g appear the co n d itio n s of the five L L S s (A ssisi, C ittà di C astello , Umbertide, M arsciano and Gualdo T adino) indicated, from the stru ctu ral point of view, co m p atib le with the m odel o f the industrial d istrict (ID ) (MAP, 2002).
T h is evidence, together w ith the outcomes o f c o n siste n t literature on the p o ssib le “district effects” on international co m p etitiv en ess (Bronzini 2000), suggested considering som e basic in d icato r o f the structural o rg a n iz atio n of the m anufacturing sectors at the ch o se n territorial level, e n la rg in g the basic theoretical reference from the industrial districts to the m ore general “local prod u ctio n system ” (LPS), o f w hich the ID is one o f the possib le specification. A LPS can be defined as a set of productive stru ctu re s specialized in the production of a lim ited group of goods, localized in a relatively re stric ted area, connected w ith each other for co m m ercial or non-com m ercial reasons, and sh arin g a com m on en d o w m e n t of knowledge and institutional fram ew o rk (B ellandi, 1994). A lth o u g h LPS can extend itse lf across different lo cals system s (follow ed by L L S s), this unit of an a ly sis can be considered su itab le to observe p o ssib le LPS effects on ec o n o m ic perform ances. In o rd e r to consider the stren g th and some of the b asic structural featu res o f LPSs possibly u n d erly in g export perform ance, the following in d icato rs were proposed.
Table 3
LLSs specialization, d iffu sio n and small size firm s in d icato rs 1996
Specialization Diffusion Small size firm incidence
e m p Y Z e m Pi.TOT e m p / / r e s , e m p , / / r e s , e m p < 5 0 . Y / e m p . . e m p , / A m P ,.r o r e m p < 5 0 t Y / e m p u W here:
em p - the num ber o f em ployees;
em p < 5 0 - the num ber o f em p lo y ees in com panies w ith less than 50 em ployees;
res - the num ber o f resid en ts; - the LLS;
- j - the m an u factu rin g sub-sector;
- T O T - the total num ber o f employees in the m anufacturing sector as a whole;
- 1 - the value o f th e v ariable for Italy as a w hole.
W h ile the first two in d icato rs provide in fo rm atio n on the potential e x iste n c e of those agglom eration econom ies based on secto r sp ec ia liz atio n and the large im portance of the se c to r for the given te rrito ria l level, the third one sheds light on the size structure of the local firm clu ster, in order both to mark out LPSs o f sm all and m edium en te rp rise s, and to c o n sid e r (if the indicator is low) the possible e c o n o m ie s of scale effects (B ronzini, 2000; C re sta n e llo e M enghinello, 20 0 1 ), related to the p re v ailin g presence of m ed iu m and large firm s, on ex p o rt perform ance. T he threshold of 50 em ployees, generally co rresp o n d in g to the sm all enterprise size, is ju s tif ie d by the reduced a v e ra g e size of m anufacturing firms in U m bria, and is thus able to g u a ra n te e a proper deg ree o f size structure div ersificatio n am ong te rrito rie s, otherw ise (threshold to 250 employees) not visible.
P ooling the cross sectional data of the territorial export and excluding, according to the Istat (2002) approach, the non m eaningful export levels (low er than 0.01% of national export value of the sub-sector), 23 local dim ension of significant com petitiveness (standardized export perform ance higher 1.2) and 11 of average levels (between 0.8 and 1.2), emerge.
T a b le 4
L L S s significantly com petitive and relative structural in d ic a to rs (1996)
L L S M anufacturing sub-scction
E x p o rt
P e rfo rm a n c eE x p o rt share Diffusion S p e c ia liz a tio n SE incidence
Assisi DC 2.53 0.01 0.03 0.02 1.33 Assisi DK 1.26 0.11 0.93 0.61 1.44 Città di C astello DG 11.88 0.04 0.05 0.03 3.97 Fabro DA 5.20 0.12 1.71 3.46 1.53 Gualdo Tadino DJ 1.46 0.03 0.40 0.26 1.44 Gualdo T adino DK 1.37 0.35 5.47 3.57 0.25 Gualdo Tadino DI 1.35 0.54 8.55 5.57 0.87 Orvieto DL 2.08 0.09 0.67 1.17 0.49 Perugia DD 3.92 1.83 1.34 1.42 1.00 Pcrugia DM 1.93 0.06 0.10 0.10 6.49 Perugia DC 1.85 0.43 0.66 0.70 0.81 Pcrugia DG 1.78 0.11 0.18 0.1 y 3.97 Perugia DE 1.69 0.63 1.06 1.12 1.21 Spoleto DG 14.10 0.02 0.02 0.03 3.97 Spoleto DA 6.08 0.55 1.21 1.74 1.24 Temi DM 13.18 0.02 0.01 0.01 6.49 Terni DH 4.72 0.50 0.35 0.37 1.76 Temi DJ 3.10 2.41 2.63 2.76 0.39 Temi DL 2.13 0.28 0.45 0.47 1.53 Temi DB 1.27 0.24 0.63 0.66 1.04 Todi DL 1.50 0.04 0.53 0.73 2.04 Umbertide DB 2.34 0.29 3.76 2.35 0.96 Umbertide DL 2.08 0.03 0.46 0.29 0.53
Source: O u r elaboration o f Istat 2 0 0 2 and Istat 1996 o f in te rm ed iate census o f industry and serv ices
Using the pooled data, no relevant correlation emerges, in a sense surprisingly, between export performance and indicators of industry diffusion, specialization and small enteiprises (SE) presence, suggesting that not a univocal structural competitive dimension across sectors and territories in one sense or the other (large or small prevalent dimension of the firms, agglomeration economies or diseconomies, specialization/de-specialization of the local system) exists or prevails. The outcome is confirmed considering the LLSs with average or significant export performance. Their specialization, diffusion and SE average levels do not appear to be significantly different from the group of less competitive LLS/sectors combinations.
Table 5
LLSs on average com petitive and relative structural indicators (year 1996)
L L S M anufacturing sub-section
E x p o rt
P e rfo rm a n c eE x p o rt share D iffusion S p ecializatio n SE incidence
Cast, del Lago DL 1.10 0.05 1.03 1.24 0.37
Ciaàdi Castdlo DK 1.07 0.11 1.50 0.90 1.29 O rvieto DA 1.01 0.09 1.36 2.37 1.53 Todi DJ 0.96 0.04 0.83 1.15 1.12 Foligno DK 0.91 0.08 0.65 0.80 0.65 M arsciano DN 0.89 0.06 1.71 1.43 0.75 Assisi DB 0.89 0.26 3.14 2.05 1.3 U m bertide DK 0.84 0.04 1.28 0.80 1.53 U m bertide DJ 0.82 0.07 2.64 1.65 0.75 Perugia DA 0.82 0.64 2.26 2.39 0.55 Tcrni DA 0.81 0.25 1.04 1.09 1.12
S o u rce: Istal 2002 and Istat 1996 (interm ediate census), ow n calcu latio n s
As a matter of fact, the structural characteristics o f the sub-sectors of the manufacturing industry are significantly different, and likely to influence the competitive trajectories also at a territorial level. The distinction of the pooled data in two main groups of the heavy industry (DF, DG, DH, DM) and of the other one of light industries (DB, DC, DD, DI), food, beverage and tobacco (DA), mechanics (DK, DL, DJ), paper, paper products, publishing and printing (DE), already brings significant evidence of competitiveness diversity.
A m ong the LLSs perform ing on/above average in the heavy industry, specialization and diffusion are far below the Italian levels (0.12).
Table 6
S p ecializatio n and diffusion in d ex e s o f LLSs com petitive in h eav y industry (year 1996)
L LS M a n u fac tu rin g
sub-section P e rfo rm a n c eE x p o rt g Xp0 r( sh arc D iffu sio n S pecialization SE incidence
C ittà di Castello DG 11.88 0.04 0.05 0.03 3.97 Perugia DM 1.93 0.06 0 .10 0.10 6.49 Perugia DG 1.78 0.11 0.18 0.19 3.97 S poleto DG 14.10 0.02 0 .02 0.03 3.97 Terni DM 13.18 0.02 0.01 0.01 6.49 Terni DH 4.72 0.50 0.35 0.37 1.76 M ean 0 .J2 0.12 4.44
In the second group, alth o u g h no significant co rrelatio n still exists betw een com petitiveness and structural indicators, in 18 cases out of 29 above averag e levels of com petitiveness are re co rd e d , and the group mean re ach es 1.71 for diffusion and 1.53 for specializatio n .
This evidence suggested to deepen the analysis in this direction. In order to synthesize the available information, an application of multivariate statistics (Fabbris, 1997), the cluster analysis, was implemented (R izzi 1995; Bolasco 1999). A s well known, this tool, of an essentially descriptive nature, allows the classification of the n observed units in m (< n) clusters, maximizing homogeneity inside the groups and heterogeneity among them , with respect to the variables used.
T he database matrix was built considering the 34 observations o f pooled L L S s with a significant or average export perfo rm an ce (tables 4 and 5), and the three structural variables (specialization, diffusion, SE incidence), standardised on the national average. C onsid erin g the features of the outcom es obtainable with the cluster analysis technique, especially in term s o f their stability (F abbris, pp. 301-302), and considering the options available in the SPSS package, the statistical im plem entation has been organized in two subsequent steps. In the first place, through the use of the W ard ’s hierarchic m ethod a first satisfactory repartition (dendrogram inspection) o f the observed units has b een identified in 4 groups. Secondly, in order to test the outcome stability, this grouping has been optim ized through a new cluster analysis, w ith the ¿-means non- hierarchic method, asking for a repartition in 4 g ro u p s with centres coincident with those obtained from the previous analysis (W ard’s m ethod). T h e procedure supplied a classification largely coincident (except for tw o observation moving to the most similar group) w ith the previous one, w hich could thus be considered sufficiently stable.
T h ree o f the four clusters obtained (table 7) show c le a r characterization with reference to the variables considered; the fourth gro u p (the number 2 in the table) is instead m ade up of those two units not emerging as significantly different. Evidently, distinctive structural featu res at the basis of their com petitive option m ust be found elsewhere. A lthough this cluster is the largest, the analysis carried out proves useful as fa r as it can describe the o th er three classes of com petitive units with relativ ely homogeneous structural characteristics of the m anufacturing sub-sectors.
T ab le 7
O utcom es o f th e cluster analysis
L L S s M anufacturing sub-section
E x p o rt
P e rfo rm a n c e Diffusion S p ecializatio n S E incidcncc
Cluster 1 Assisi DB 0.89 3.14 2.05 1.30 Fabro DA 5.2 1.71 3.46 1.53 O rvieto DA 1.01 1.36 2.37 1.53 Perugia DA 0.82 2.26 2.39 0.55 Temi DJ 3.1 2.63 2.76 0.39 Um bertide DB 2.34 3.76 2.35 0.96 Um bertide DJ 0 .82 2.64 1.65 0.75 Cluster 1 M ean 2 .06 2.5 2.43 1.00 Cluster 2 Assisi DC 2.53 0.03 0.02 1.33 Assisi DK 1.26 0.93 0.61 1.44 C ittà di C astello DK 1.07 1.5 0.9 1.29
Cast, del Lago DL 1.1 1.03 1.24 0.37
Foligno DK 0.91 0.65 0.8 0.65 G ualdo Tadino DJ 1.46 0.4 0.26 1.44 M arsciano DN 0.89 1.71 1.43 0.75 Orvieto DL 2.08 0.67 1.17 0.49 Perugia DC 1.85 0.66 0.7 0.81 Perugia DD 3.92 1.34 1.42 1.00 Perugia DE 1.69 1.06 1.12 1.21 Spolcto DA 6.08 1.21 1.74 1.24 Todi DJ 0.96 0.83 1.15 1.12 Todi DL 1.5 0.53 0.73 2.04 Tem i DA 0.81 1.04 1.09 1.12 Temi DB 1.27 0.63 0.66 1.04 Terni DH 4 .72 0.35 0.37 1.76 Tem i DL 2.13 0.45 0.47 1.53 Um bertide DK 0 .84 1.28 0.8 1.53 Um bertide DL 2.08 0.46 0.29 0.53 C luster 2 M ean 1.96 0.84 0.85 1.13 Cluster 3 C ittà di Castello DG 11.88 0.05 0.03 3.97 Perugia DG 1.78 0.18 0.19 3.97
T ab ic I continued Perugia DM 1.93 0.1 0.1 6.49 S poleto DG 14.1 0.02 0.03 3.97 T em i DM 13.18 0.01 0.01 6.49 C lu ster 3 Mean 8.57 0.07 0 .0 7 4.98 Cluster 4 G ualdo Tadino Dl 1.35 8.55 5.57 0.87 G ualdo Tadino DK 1.37 5.47 3.57 0.25 C luster 4 Mean 1.36 7.01 4 .5 7 0.56
S ource: our calculations
In p artic u la r, the first g ro u p is constituted by c o m p e titiv e dim ensions o f d iffe re n t territories (seven d iffe ren t LLSs b elo n g to the cluster, each one w ith one specialization except U m bertide), sho w in g a double av e ra g e export perform ance in som e su b-sectors (food, textile and m etals); specialization and diffu sio n values, on av e rag e, more than tw ice th e Italian level, and a d im ensional structure p e rfe c tly on average. P ro d u c tiv e contexts, that are hen ce relevant for the local m anufacturing se c to r and for the socio-econom ic environm ent, but w ith not distinctive d im e n sio n a l features. N ote th at som e com binations o f territory/industry very m eaningful for the m an u factu rin g U m bria b e lo n g to this cluster: A ssisi and Umbertide w ere recently indicated as industrial districts s p e c ia liz in g in textile and textile products (M A P , 2002), the s p e c ia liz a tio n (DB) that they assu m e in cluster one; F ab ro and O rvieto, in the fo o d industry (D A ), em e rg e in other recent a n a ly sis (Perugini and S ed iari 2003) as local p ro d u c tio n systems able to strongly integrate ty p ical food processing w ith the agricultural and tertiary (especially to u rism ) sectors (integrated lo ca l rural system s). In o ther words, the c o m p e titiv e dimension o f g ro u p one seems sig n ific a n tly anchored in e x te rn a l econom ies of sp ec ia liz atio n , and d eriv in g fro m a considerable d iffu sio n at the local lev el, o f the “cu ltu re” o f that production, g e n e ra tin g forms of c o m p e titiv e advantage b ase d on the recalled d im e n sio n s: local know ledge, efficient inform ation, labour division end c o n se q u e n t flexibility, etc.
V ery different are the structural prem ises at the basis of the co m p e titiv e n e ss dim ension o f the territories and in d u stries grouped in the th ird cluster, classifying all contexts sp e c ia liz e d in chem icals and
fibre o r transport equipm ent products, but w ith a low specialization level an d not influencing sig n ifican tly the local so cio -e co n o m ic context. T he firs t feature to be noted re fe rs to the co n v e rg e n c e o f the five cases o f g o o d export perform ance o f sub-sectors DG and DM in the sam e g ro u p , w ithout any in fo rm atio n given in the c lu s te r analysis about the se c to r associated to the te rrito ry . This could be interpreted as a s ig n ific a n t distinctive se c to r-b a se d com petitive d im en sio n , relatively in d ep en d e n t from the te rrito ry o f belonging; in o th e r words o f a c o m p e titiv e advantage a lm o st com pletely b uilt in sid e the firm (the co rre sp o n d in g territories are not specialized in, nor significantly a ffe c te d by, the industries); even though the in tern a l com petitive d im e n sio n cannot be d irec tly co n n ected to ec o n o m ie s o f scale, given the abo v e av erag e incidence o f sm all com panies in the co n te x ts considered.
T h e fo u rth com petitive o p tio n (group 4) is p a rtic u la rly interesting as o p p o se d to the previous o n e. It clusters, in d eed , tw o com petitive d im e n sio n s of the same te rrito ry (G ualdo T adino) in tw o m anufacturing su b -se c tio n s (DI and DK) stro n g ly characterizing th e local context, but also w ith a dim ension d istrib u tio n more oriented to w ard s m edium and large firm s, com pared to th e national average. T h is com p etitiv e option, in o th e r w ords, seems to c o m b in e and com plem ent b oth the advantages d raw n aro u n d and inside th e firm . N o tw ith stan d in g the significant d iffe re n c e s betw een the tw o sec to rs (deep tra d itio n o f artistic pottery m a n u fa c tu rin g and large n u m b e r o f SMEs in th e ca se of non-m etal m ineral products; recent lo c a liz a tio n of a large firm o f electric dom estic a p p lia n c e s with co nsequent agglom eration e ffe c ts in the DK su b se c tio n ) this evidence w o u ld suggest the e x iste n c e o f a peculiar te rrito ria l com petitive p a tte rn , sector-crossing, c o n siste n t with som e im p o rta n t theoretical p o sitio n o f the Italian lite ratu re on local d e v e lo p m e n t (Brusco, 2001).
T h e inform ation provided by the analysis e v id e n c e a strong variety of stru c tu ra l models u n d e rly in g the higher p e rfo rm an c es of som e te rrito rie s even of a re la tiv e ly sm all but sig n ifican t region as U m bria. T his resem b les the m arked and w ell-know n so cial and econom ic d iv e rsific a tio n of the c o n te x ts, im plicitly co n sid e re d in the analysis re c u rrin g to the LLSs unit o f observation.
T h e m ethodological c o n se q u e n c e s and the p o licy im plications seem re le v a n t, and will be briefly tre a te d in the co n c lu d in g section.
FINAL REMARKS
The first general consideration that can be drawn from the outcomes of the research presented, deals with the possibility and the necessity to apply the theoretical background used in this paper to the socio-econom ic analysis of other regions and countries, especially those o f C entral and Eastern Europe, facing entrance into the large EU single m arket, where the com petitive pressures will be stronger and selective. T h is implies the needs to investigate (and take advantage of) all the possible sources of potential com petitive advantages, including those of a territorial nature dealt with in this paper. This consequently asks for the availability o f the necessary and proper analytical tools (functional regions) able to assure the observation of the relevant diversities among territories in a given region or country.
C onsistently with the structure of the paper, two other connected levels of more specific final remarks can be proposed.
The first one concerns the prom ising prospects fo r an enlargement of U m bria exports towards a num ber of EU accession countries, namely H ungary, Poland, Slovenia, the Slovak Republic and the possibility to m aintain a relevant competitive position in other ones w ith a slower market potential (the Czech Republic, Romania).
The sector articulation of these exports flows (m ainly concentrated in the light or so-called mature industry products) leads to the second order of reflections: the territorial productive and export specialization of the considered Umbria’s sub-regions, largely dom inated by the presence of clustered SMEs operating in the same industry. As show n, a meaningful perform ance of the region at international level becom es clearly apparent only considering proper units o f analysis able to capture the effective com plexity o f local social and economic patterns. M oreover, the relevant relational attitudes of the firm s, coupled with a strong propensity to export, could develop into forms o f enlarged internationalization (inter-firm cooperation) especially with economic actors o f the countries where U m brian trade flows are m ore structured.
T his means that the proper distance of observation of socio-economic phenom ena is not a m ethodological aspect that can be neglected or sim plified (i.e. administrative regions equal territories), but should be carefully considered prior to undertaking data collection and analysis. This allows elevating in certain cases, the territory itself (w ith its natural, human, social, economic, cultural, institutional features) to the role of peculiar
firm s belonging to the system . T his enlarges the source of the competitive d im ensions of the economic actors from exclusively inside the productive process to the context w here they operate. As a consequence, the deep know ledge of the features o f diverse local systems (actors, relations, rules) becom es strategically crucial fo r the explanation o f regional differential of econom ic performance, rendering insufficient the traditional over- individualistic and under-socialised view of econom ic agents suggested by m ainstream theory. And im posing an inescapable disciplinary integration that econom ics historically tended (and still now tends) to consider useless.
T he implications of the approach on the norm ative spheres (policy recom m endations) are clear-cut, in political contexts w here the use of term s like devolution, subsidiarity, local governance is increasingly intensive. N eglecting the local peculiarities o f socio-economic environm ents not only could translate into ineffective employment of the available resources, but could even be destructive o f potential deposits of com petitive advantages. From this point of view the Common A gricultural Policy (CAP) has historically represented an instructive case o f exclusively sector-based intervention, without any (significant) concern to territorial differences across Europe. It is very well known how this policy not only led to large farm ing conversions (on the basis of aid-seeking / aid-m axim izing behaviour o f farm ers) towards crop productions (cereals) socially undesired and costly to be m anaged. But also crucially contributed to the non-reproduction over tim e o f immaterial inputs (first of all, knowledge) necessary for certain p roducts (the M editerranean products are a clear exam ple) able instead to gain an autonomous (not depending on public action) position in com petitive m arkets.
T h e challenge for the next decades to locally cope with (and take advantage from) globalization o f markets, seems strongly dependent on the capacity to reproduce and valorize peculiarities and differences. The fact that this does not attain only to an individual sphere o f economic actors but increasingly to the resources socially constructed ov er time (a collective reputation, a peculiar organizational model, etc.), suggests that the game will be played on the grounds o f the capacity of public and private efforts to converge to this common strategic dimension.
A previous version o f this p a p e r w as presented at the Open M in d s Conference, held in L odz (P oland) on 13-15 September 2003. The participants o f the p a n e l session on regional com petitiveness are gratefully acknow ledged fo r their useful com m ents. Although the authors share the responsibility fo r the contents o f this article, the single sections can he attributed to as fo llo w s: G. C alzoni (Introduction and Final R em arks); C. Montesi (2 to 5); C. P erugini ( I, 6 and 7).
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