The effect of globalisation on industrial districts in Italy: evidence from the footwear sector



export performance - tend to delocalise less intermediate items than the ones produced
domestically, so that they remain net exporters of intermediate goods. Accordingly, the
quality of imported items is higher than the quality of items imported by other districts.
On the other hand, high-quality districts tend to remain net importers of finished items.
Moreover, the quality of finished items produced domestically and exported for further
processing is higher than the quality of finished items assembled abroad. This confirms
that high-quality producers are actually upgrading their production by delocalising low-
value added stages of production abroad as a strategy to reduce production costs. At the
same, they continue to perform high-value added operations domestically (which are
likely to be either capital- or skilled labour-intensive and could not be successfully
carried out by foreign subcontractors). Footwear districts in Veneto fit in this case. In
particular, Verona is a strong net exporter of parts (to be assembled abroad) and
accordingly a strong net importer of finished goods. On the contrary, Brenta relies much
less on outsourcing of assembling operations, possibly because the higher quality of its
final goods does not allow for a massive delocalisation of operations which can be
better performed domestically. The case of Treviso cannot be directly compared to the
other ones, as it is specialised in sporting footwear with high technological content. As
in the other districts in Veneto, outsourcing as a competitive strategy refers more to
final assembling than to production of intermediate goods.

An opposite scenario emerges for low-quality producers - who have to cope with
price competition from emerging economies - who instead tend to delocalise a higher
percentage of production abroad (mainly intermediate processing), and to become net
importers of parts from foreign subcontractors. At the same time, low quality producers
also tend to be less export oriented, e.g. to serve mainly the low price segments of the
domestic market. These characteristics suggest that districts in industrial countries,
operating in a relatively low segment of the market in traditional sectors such as
footwear, do face very strong competitive pressures from low-cost producers which
force them to adopt massive delocalisation strategies. As a result, they are likely to be
induced to displace a relevant part of production processes in other countries. Footwear
districts in Puglia fit in this case. Upgrading strategies are urgently needed to increase
their competitiveness on both domestic and foreign markets, and to counter the trend
towards employment reduction at the local level.

17



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