Abstract: "Constructing" the Industrial District

Renato Giannetti

Abstract

The paper investigates the construction and the changing meaning of the "local system of production" since its "invention" in the early 1970s. We find the origins of the notion of a local system of production as a defensive device to adapt a peripheral area to a sudden break in economic conditions. Sociologists, for example, stated that cooperative ideologies (organized and promoted by Communist and Catholic parties) and a local organization of the labor market—strongly rooted in specific geographical area in Central and Northeastern Italy—helped those areas to cope with the crisis of mass production and big business. In the late 1970s and during the 1980s, the main meaning of the concept shifted to the "technological dynamism" of the local system of production. This was able not only to adapt itself to changing economic conditions, but also to compete successfully in the international market. This technological dynamism came essentially from the specialization of suppliers working in the same sector in a local area. The division of labor favored innovation, and moreover these innovations spilled easily over other firms thanks to their spatial contiguity. It was the time of "industrial districts" concept, which had strong roots in its own history. In the 1990s the meaning of "local system of firms" shifted again, from the capacity to innovate to the capacity to adapt defensively to a changing economic environment. The emphasis was again on the variety and ease of reorientation of productive capacity to market changes. New features were crucial, cooperation often became synonymous with market competition and lost a large part of its benevolent (and sometimes collusive) flavor. Industrial policy too came back into the center of attention, although in the form of local industrial policy.