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



Among the different forms of governance, the literature on value chains, which is
mainly concerned with developing countries, stresses the importance of the quasi-
hierarchy type, distinguishing between those cases when co-ordination is undertaken by
buyers (‘buyer-driven chains’) and those in which producers play the key role
(‘producer-driven chains’) (Gereffi 1994). Moreover, several authors conclude that the
increasing concentration of retailing in developed countries makes buyer-driven chains
a growing phenomenon (Dolan and Humphrey 2000; Gereffi 1999). In this section we
aim to contribute to this debate by broadening the analysis to include developed
countries, showing that globalisation is also exerting a strong impact on the organisation
of production in industrial clusters in those countries.

Furthermore, we would like to address the following question: how the insertion
into global value chains affects local upgrading strategies? The concept of upgrading is
used here in the sense proposed by Humphrey and Schmitz (2002). Process upgrading
means transforming inputs into outputs more efficiently by re-organising the production
system or introducing superior technology; product upgrading can be defined as moving
into more sophisticated product lines; and, functional upgrading is acquiring new,
superior functions in the chain, such as design or marketing. Besides, a different
possible form of functional upgrading has come to the fore from the empirical analysis
in Section 2, i.e. the externalisation of low value added functions combined with a focus
on more advanced activities or higher value added segments of market.

3.1 The Brenta shoe district

In Brenta the origins of the footwear industry date back to the beginning of last
century. During the footwear industry boom after World War II, the sector progressively
absorbed most of the rural workforce available in the area. In the 1960s, the local
enterprises expanded and increased their exports, specialising in the upper segments of
the market. In 2001, 88 per cent of the shoes produced in the area were medium-high
and high priced women's shoes with an average ex-factory price of 58 Euro.

Since the second-half of the 1980s, the area has suffered from increasing
competition in the international market and sales have stagnated, fluctuating between
7.9 and 8.8 million pairs (mainly due to exchange rate fluctuations). In value terms,
however, sales continued to increase in most years (ANCI, 2001). It may be useful to
add that Brenta’s performance is in line with that of the rest of the Italian footwear

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