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

In most of the cases investigated, fashion companies provide the design and Brenta
manufacturers take care of all production phases, including product development¹³ and
purchase of raw materials and components. After that, shoes are sold by fashion
companies with their brand names. In the sample, design is totally controlled by fashion
companies in 65 per cent of the firms working as subcontractors, while 35 per cent of
them contribute to design. This often means that fashion companies give producers
some ideas and sketches to be transformed into a shoe.¹⁴ Sales are undertaken by
fashion companies in 82 per cent of the cases (Table 6), while product development and
purchase of inputs are carried out in most of the cases by the subcontracting firms.
Nevertheless, fashion companies are increasingly becoming involved in these activities
by directly selecting suppliers, sometimes even through acquisitions of firms, and
extending their control on quality and delivery conditions backwards along the chain.

According to Rabellotti (2001), it appears that Brenta has been undergoing a process
of functional downgrading. Traditionally the design and acquisition of inputs were
controlled locally, and carried out inside the firms or inside the district. More recently,
with the advent of the luxury fashion companies, local enterprises are moving out of
design and sale. There are also signs of luxury fashion companies extending their
control backwards along the chain.

Table 6: Internal functions in sample firms working as subcontractors
to high fashion companies

is the ratio on the total number of subcontracting enterprises in the sample.
Source: Rabellotti (2001)

¹³ There is a distinction between creative and technical design; in the paper the former is simply called
design while technical design, including size developing, is named product development.

¹⁴In the rest of this section, the proportion of sample firms is intended as a ratio of the 17 enterprises
which work as subcontractors to high fashion companies.

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