1. The Agrifood Districts in the New Millennium Local and Global Development Regional Economic Policies 2014/2015 Prof. Cristina Brasili Local and Global Development Regional Economic Policies 2014/2015 Prof. Cristina Brasili 1

2. We are going to present an analysis of Agrifood Districts The characteristics of ID approach and the main structural changes in the new Millennium The figures of Agrifood Districts and their mosaic style of development The Internationalisation of Agrifood Districts The focus on the districts of the meat industry: the ham districts of Parma & Reggio Emilia and S. Daniele. Does still exists the “district effect”? 2

3. The Development of the ID’s in the New Millennium  According to an ISTAT analysis of 2001 Census data, the new Italian industrial “triangle” had moved towards the North-East and it was now characterised by IDs  In Italy there was a clear positive “district effect” for more than a decade (from the mid 80’s to the end of the 1990’s)  The real question is the specialisation of Italian industry  Many important changes, the globalization effects and the new competitive scenario call into question the rigidity of the Italian ID’s, but some of them have been able to react  Standardised production will have to be abandoned in favour of more flexible management aimed at producing typical and niche products 3

4. The “New” Food Districts among the “New” ID’s In the new globalization scenario the Italian food industry has improved its export performance and its importance in employment market (Foresti G. Micelli S., 2007) In the Italian food districts exports grew from 14,3% in 1991 to 17,6% in 2004 (% of total food production), and from 0.6% to 0,9% (% of total exports) In the non-ID areas the workforce fell by 11,2% (‘91-’96) and rose by 3,4% (’97-’01) In the agrifood districts the workforce fell by 5,3% (‘91-’96) and rose by 9,2% (‘97-’01) Important changes in the exports of IDs: the percentage of total exports to non- EU countries increased from 16% in 1995 to 24% in 2005 Different trends have been evident in the agrifood districts: the exports increased most to USA and Canada Non-standardised products and the Districts where they are produced are less vulnerable to competition 4

5. Manifacturing Industry Capability of Check the Import Flow The IDs were also involved in the opening up of production chaines to the international market Using the provincial data for exports and imports this process can be done a proxy measurement The index utilised shows the capacity of the Italian firms to check the flow of import from emerging countries 5

6. Italian District products are of greater value than manufacturing average The products of the food Districts were less able to check the flow (’95-’04) A process of concentration has taken place in the Italian IDs The Italian IDs show a good vitality and capability of reaction to global changes in several sectors of manufacturing industry 6

7. IDs in Italy by kind of production (ISTAT 2001) Inside the SLL the presence of the IDs is determined by: 156 ID’s were identified using the 2001 census data Only 7 IDs belong to food industry, the agrifood districts are largely “understimated”: only 4,5% of the total numebr of ID; 1,8% of manufacturing firms; 1,7% of manufacturing industries workers The 7 Agrifood Districts are only in few Northern Italian regions The presence of many SMEs, in term of number of firms and employees 7

8. A different methodology We propose an alternative methodology specifically considers the concentration and specialization of the food industry (and not that of manufacturing industry) at municipal level (and not the local labour system). It uses six indices 8 main subsectors of the Italian food industry are identified It attaches more importance to the presence of clusters of firms and agrifood districts, and in particular the meat industry than the ISTAT methodology does 8

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11. Exports of Italian firms by size (number of employees) and sector (2000; 2004; 2007) Sectors 200020042007 < 5050-249> 250Total< 5050-249> 250Total< 5050-249> 250Total Manufacturing24.229.446.4212.35622.130.147.9237.277 20.430.549.1301.109 Food products and beverages 33.634.531.910.88528.934.636.512.916 29.835.834.415.392 Total31.427.041.5250.63928.827.543.6278.625 27.628.044.3316.501 Source: ICE processing ISTAT data 11

12. Agrifood Import-Export in Italy (in mln euro) and % over the total (1999-2009) Source: ICE/ISTAT ImportExportImport %Export % 1999 23.03415.69211,1%7,1% 2000 25.06816.8869,7%6,5% 2001 25.92218.2199,8%6,7% 2002 26.05419.13810,0%7,1% 2003 26.62018.99910,1%7,2% 2004 27.28219.4499,6%6,8% 2005 28.04320.5719,1%6,9% 2006 30.18722.1988,6%6,7% 2007 31.85624.1418,5%6,6% 2008 33.14526.2418,7%7,1% 2009 29.96924.54210,1%8,4% Var % 2009/2008 -9,58%-6,47% 12

13. Italy: % of Agrifood export over the total (1999-2009) Source: ICE/ISTAT 13

14. ImportExport% import totale% export totale 1999 3.024 2.52420,4%9,7% 2000 3.265 2.67918,8%8,9% 2001 3.532 2.82019,7%9,0% 2002 3.562 2.89818,5%9,1% 2003 3.690 2.87019,0%9,0% 2004 3.819 2.99618,9%8,7% 2005 3.679 3.15216,4%8,4% 2006 3.936 3.46215,5%8,4% 2007 4.378 3.73015,1%8,0% 2008 4.712 4.04916,4%8,5% 2009 4.349 3.86320,1%10,6% Variazione % 2009/2008 -7,69%-4,61% Emilia-Romagna: % of Agrifood import & export in mln euro and as % over the total (1999-2009) (1999-2009) Source: ICE/ISTAT 14

15. Source: ICE/ISTAT Emilia-Romagna: % of Agrifood import & export (in mln euro and as %) Parma: % of Agrifood import & export (in mln euro and as %) 15

16. Gross foreign direct investments in the Agrifood system from Italy Gross foreign direct investments (FDI) towards Italy in the agrifood system and the total economy Source: Ismea processing of Ice and Uic data 16

17. Foreign companies with Italian participation in the agrifood system Source: Ismea processing of Ice and Uic data 17

18. Cooperation, aggregation and collaboration of firms in Emilia-Romagna 271 food enterprises from Emilia-Romagna participated in foreign enterprises in 2005 Most collaboration is with other EU countries (119 firms) Firms that have important investments in foreign countries are capital companies or cooperatives (Unioncamere 2006) these enterprises had previously developed several forms of collaboration with other firms in the region or from other regions, aimed at investing or collaborating with foreign enterprises The most common forms of network are consortium, association, or participation in the capital of the companies (Brasili, Fanfani, 2007)  18

19. Analysis of the ham districts of Parma & Reggio Emilia and S. Daniele Does the “district effect” still exist? 19

20. The Data The analysis has focused on those firms of the meat sector from 1999 to 2008: 110 firms from the ham districts of Parma&Reggio Emilia 14 other meat firms from the provinces of Parma&Reggio Emilia 30 firms from the ham district of San Daniele The Parma and San Daniele ham-producing districts have different structural and economic features System Dynamics and Innovation in Food Networks, Igls/Innsbruck, February 8-12, 2010 – The Agrifood Districts in the New Millennium by Cristina Brasili and Roberto Fanfani 20

21. The Parma ham district In the Parma ham district the pigs are raised in the area and the meat processed here. Some figures for ham production in Parma in 2008: about 9.8 million sides of ham produced 2.9% more than 2007 164 firms 4,987 pig farms turnover about € 1700 million, of which € 1,300 million was in Italy and € 400 million exported a 2.7% decline in sides sold abroad with respect to 2007 an increase of 6.5% in sales of slices with respect to 2007, with increases of 8.4% and 5.7% abroad 21

22. The San Daniele ham district By contrast, The local “San Daniele” system uses all the raw materials coming from outside the municipality Some figures for San Daniele ham production in 2008: 2,8 million sides of ham produced 2.9% more than 2007; 30 firms 4,818 pigs farms turnover more than € 330 million sales 2% higher than in 2007 ham production has increased since 1995 22

23. Source: our processing of AIDA-Bureau Van Dijk data ROS ROE The Dynamics of the Main Economic and Financial Indicators in the ham District of Parma, San Daniele and the Other Meat Firms in Parma and Reggio Emilia Provinces 23

24. Source: our processing of AIDA-Bureau Van Dijk data VERTICAL INTEGRATION c CURRENT RATIO The Dynamics of the Main Economic and Financial Indicators in the ham District of Parma, San Daniele and the Other Meat Firms in Parma and Reggio Emilia Provinces 24

25. LEVERAGE QUICK RATIO Source: our processing of AIDA-Bureau Van Dijk data The Dynamics of the Main Economic and Financial Indicators in the ham District of Parma, San Daniele and the Other Meat Firms in Parma and Reggio Emilia Provinces 25

26. LABOUR COST PER EMPLOYEE (.000 Euros per employee) LABOUR PRODUCTIVITY (.000 Euros per employee) Source: our processing of AIDA-Bureau Van Dijk data The Dynamics of the Main Economic and Financial Indicators in the ham District of Parma, San Daniele and the Other Meat Firms in Parma and Reggio Emilia Provinces 26

27. Some questions...........  Have the “externalities”, namely those economical factors which are to be understood as external to the enterprises but internal to the district, run out?  Has the positive district effect shown in many previous papers, that highlights the higher performance of SME’s than isolated firms disappeared? 27

28. ......some answers  Important transformation in the economic scenario at national and international level have had different impact on the IDs.  Some of the IDs have shown that they are capable of reacting, have no employment difficulties and are also changing the geographical specialization of the export. These are due also because an important number of agrifood districts have characteristics of quality and typicality.  In the new global scenario of the new Millennium the Italian food industry is increasing its export performance and it importance in the labour market. 28

29. The previous findings are improved by the main economic and financial results of firms in the Parma and San Daniele ham districts, showing a sort of convergence between the district enterprises and the other meat firms in Parma & Reggio Emilia provinces, even though the results of the economic and financial indicators were still good.  The SMEs (with less than 250 employees) in the food industry are still responsible for 65% of exports, against an average of 52% in manufacturing industry.  The different kinds of internationalisation have been characterised by a lower level of FDI in the food industry than in other “made in Italy” sectors of the Italian manufacturing industry  The de-localization of food enterprises has become less important and it have not regarded the production processes. 29..........moreover.

30. Regiona Economic Policies The Agrifood Districts in the New Millennium To study  L’“EFFETTO DISTRETTO”: MOTIVAZIONI E RISULTATI DI UN PROGETTO DI RICERCA, Introduzione di L. Federico Signorini, in Lo Sviluppo Locale a cura di L. Federico Signorini, Meridiana Libri, 2000.  I distretti industriali del terzo millennio a cura di Fabrizio Guelpa e Stefano Micelli, il Mulino, 2007, Cap. 1 pp. 29-78 e Cap. 7 pp. 321-356  Brasili C., Fanfani R. (2012) I “nuovi” distretti agroalimentari tra i “nuovi” distretti industriali, pp. 261- 282, In: Metamorfosi del «Modello Emiliano». C’è ancora un futuro per i distretti industriali?, Il Mulino, Bologna 30