producers to diversify their products. Collaboration between the suppliers of inputs and
the producers of shoes is an important aspect of the way that footwear industrial districts
are organised since it allows fashion decisions to be taken together.
The Italian footwear districts are characterised by a high level of subcontracting with a
wide network of enterprises specialised in particular aspects of the production process.
According to Varaldo (1988), more than 80 per cent of Italian footwear firms
subcontract the production of soles, insoles and heels, around 70 per cent subcontract
the production phases of edging and sewing of uppers and about half of the firms
subcontract the cutting phase. This splitting up of the production process allows the use
of specialised machines and specific labour skills for particular tasks and provides for
larger scale economies than are possible in shoe production itself. In the survey of
Rabellotti (1995) the key reason for subcontracting is to reduce costs. Nearly three
quarters of the surveyed firms report this as the catalyst for their decision. In addition,
for 50 per cent of the firms subcontracting is seen as an important means of increasing
flexibility. Because subcontractors are more specialised, and are more able to reap the
available economies of scale, they are seen as providing better products at lower cost
and with shorter delays.
Most of the shoe producers surveyed in Italy chose subcontractors within the same area.
The key issue in terms of our discussion of globalisation, is why it is in Italy that
subcontracting has mainly been allocated to other firms in the region and not overseas to
even lower cost suppliers. A key feature of industrial districts is the maintenance of
stable and continuous linkages between shoe producers and subcontractors. Despite
having been given prominence in a number of previous studies of industrial districts,
local government was of little importance in the footwear districts of Italy,.
Several authors observe a link between the characteristics of the local labor market and
industrial clusters. The learning process which usually takes place inside the firm,
becomes a collective process in the industrial district, based on common knowledge
which accumulates in people rather than in firms. Knowledge, which is transmitted from
one generation to the next, enhances local innovation through labour mobility, which
circulates the know-how of one firm to the other.
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