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2006 European Urban and Regional Studies Conference September, Roskilde, Denmark Draft 14-08-2006
Manu Ahedo Santisteban Post-Doctoral Researcher Department of Sociology University of the Basque Country E-mail: firstname.lastname@example.org
Abstract In this paper it is argued that most regional industrial clusters in Spain and Denmark in order to preserve in the last decades their endogeneous capacity for socio-economic growth and industrial development have deployed specific institutional strategies, both nation-state and regionally or locally-embedded. Although Denmark and Spain belong to two different varieties of capitalism or business system, namely the nordic and the southern european models, dynamic networks of Small and Medium-sized Enterprises constitute the backbone of their production systems. The article thus analyses the distinctive institutional factors and strategies that characterize the functioning of the industrial clusters in each country during the last decades. An special focus in on the key institutional actors for cluster development in each country, that is, the territorial business and industry associations in Spain, and the craft-labour organizations in Denmark.
1. SME-based clusters in two radically different varieties of capitalism Industrial clusters can present two main typologies: a network of Small and Medium-sized Enterprises (SMEs) suppliers to more or less proximate large-scale enterprises (LSE); and a concentrated network of SMEs that vertically divide labour and horizontally co-produce the whole value-chain of similar products. Belong to one or another typology depends very on the nature of the industry or sector, and it is also influenced by the business history of the country and region. Denmark belongs to the so-called Nordic variety of capitalism or business system, which in their two-models typology Hall and Soscike (2001) include within the Coordinated Market Economy type. Denmark has historically been one of clear examples of centralized democratic corporatism where strong labour and employer organizations have developed a system of consensus-building and policy negotiation (Campbell, Hall and Pedersen, 2006), or in other words “a negotiated economy” (Nielsen and Pedersen, 1989).This centralized corporatist system of collective bargaining has in the last decades undergone a decentralization process towards the sub-national (counties and municipalities), sector and firm level. Moreover, the Danish business system displays two main features: a) besides some lately growing medium and large firms, the Danish business structure is still based on a system of more or less networked or clustered SMEs (Karnøe et al. 1999), divided in what Kristensen (1996) calls the two main types of firms: skill-containers and project-coordinators; and b) one of the main competitive factors for the Danish economy is the vocational training and worker continuing education. Concerning the geographical business location, the networks and clusters of SMEs are geographically concentrated in the peninsula of Jutland and the island of Funen, opposed to the more financial and trade oriented Copenhagen area. Spain belongs to what few researchers describe as Mediterranean or Southern European style of capitalism in Europe (Rhodes, 1998). In addition to the historical role of the state as organizer of the economy, in the last democratic decades there has emerged a kind of competitive corporatism (Rhodes, 1998), which coordinates some production and distributive politics, and where labour unions and employer associations have rapidly constructed an institutional framework for negotiations and agreements (Miguélez and Prieto, 1999). Important actors in this evolution have been the increasing emergence of business and industry associations in the Spanish provinces and regions, whose emergence has coincided with both the re-configuration of the Spanish democratic civil society (Pérez-Díaz, 1993) and the politico-administrative regionalization process. Another important feature of the Spanish capitalism is the geographical duality of the business structure: a) a centre political capital, home of the largest Spanish and foreign firms and multinationals, especially in the services and finance, and close to the regulatory and state powers; and b) the north-east periphery, home of industrial activities, to a large extent organized around networked or clustered of SMEs (Ahedo, 2006). In sum, we have both in Denmark and in Spain networks of more or less geographically concentrated SME-based clusters in a broad range of industrial sectors. That is, we have the same phenomenon in two rather different countries. However, their different geographical, historical and institutional variations make the working of these clusters rather distinctive, and thus subject to different challenges and dynamics.
2. Industrial Clusters: the regional institutional approach. 2.1. The regional institutional approach in the study of clusters There are different levels of analysis in the study of industrial clusters and districts: the firm level, the cluster level and the regional level. The most widespread level is the single cluster analysis, which aims to depict the structures and relations between firms and between firms and institutions at the specific cluster or district. The regional level of analysis has been advocated mainly by economic geographers and sociologists, such as the works by Cooke and Morgan (1998) and Crouch et al (2001). This regional level focuses on the relations between regional public and private actors that provide the local and regional clusters with the collective competition goods to be innovative and dynamic. Thus, inspired by this regional approach the key questions to be answered are: a) how are industrial clusters geographically organized?, and how are industrial clusters institutionally organized?. First, regarding the geographical factor, the border of an industrial cluster may have narrow or broad limits. The limit of the relations between firm and firms-institutions can range from municipalities or towns to province or regions. That depends on both the hard factors, such as distance and transport infrastructure, and the soft factors, such as social and labour mobility. Of course, both factors also depend on the politico-administrative organization of the country. Second, concerning the institutional politics of industry, industrial and business interests can get organized in different levels, from the state-national, towards regions, province or municipalities. The particular level of institutional politics in a country depends primarily on the political history, and secondarily on the space-society relation. 2.2. The study In thefollowing some preliminary results from a comparative study are presented. The study has compared some regional industrial clusters in Spain and Denmark. The regions selected have been in Spain: Basque Country, Catalonia and Valencia Region, and in Denmark: the peninsula of Jutland and the island of Funen. The character of the industries taken into the study are both traditional craft sectors, such as furniture, textiles, and the more technology-intensive such as machinery, engineering, electronics and related sectors. Methodologically, whereas in Spain I have conducted both secondary and primary data-collection and analysis, in the Danish case, the data comes mainly from a comprehensive literature review and analysis of secondary data. The general hypothesis is therefore that cluster-related institutions are the key actors and factors in the continuing adaptation and adjusting of the regional industrial clusters. Likewise, the nature and evolution of institutions are to an important degree context-dependent, that is, dependent on the nation-state and regional-local factors. In the Spanish case the main hypothesis is that one of the most important institutional strategies has been the constitution of cluster-level business organizations and formal networks. Thus, it might be argued that the networking capacity of regional and local entrepreneurs and the pro-active policies of regional authorities have been key institutional actors in the development of the institutions for collaboration for the clusters. In the Danish case the main hypothesis is that one of the main institutional strategies has been the continuing updating of the training system and its related institutions in order to adjust its labour force and skills to the needs of the local industrial clusters. The strong municipality-councils have also been important agents in the construction and upgrading of these institutions for training and knowledge-development. In this sense, it can be said that the municipalities and the labour organizations have been the most important institutional actors.
3. The historical construction of industrial clusters (1900-1970) In Denmark the historical construction of its variety of capitalism presents three main features: a) its negotiated character based on a combination of socio-economic and political histories (Amin and Thomas, 1995, Kristensen, 1996); b) its geographical dimension: where the societies of the regions of Jutland and Funen have pursued strategies for socio-economic development based on a flexible industrialization in an old but still historically geographically heterogeneous nation-state; c) its lacking of LSE and predominance of SMEs (but not many micro-entreprises). In order to understand the emergence of this variety of industrial capitalist society in the regions of Jutland and Funen, I will mainly follow the arguments on several chapters by Kristensen (1996) and Kristensen and Sabel (1997) Thus, three historical phases can be indicated: a) 1890-1930: a period of modernizing agriculture, due to the cooperative movement since the late 19th century, the demand for machinery and equipment to the production of milk and meat products increased significantly in the whole area. Along the systems of railway towns, a system of diary and meat cooperatives emerged dispersed through the whole Jutland-Funen area, thereby bringing about a broad network of local cooperatives, eager to innovate and modernize; b) 1930-1970: a growing number of local farmers had already started up their own firms and fabrics in order to provide the necessary equipments and machines to the demanding agro-food industry. At the same time, as the agroindustry was experiencing the slow but continuing declining, other craft activities were pursued by farmers and machinery workers, such as textiles and garment, furniture, and the like; c) 1970-2000: a period of diversification along engineering industries: with the 1970s crisis affecting traditional industries, such as ship-building, iron, etc. new engineering activities emerged, such as advanced mechanics, electronics, environment, renewable energies, etc. In Spain the industrialization process in Spain was forged by both local entrepreneurial actors, and by a foreign investment. As a “late comer”, it started to really advance during the first decades of the 20th century (Tortella, 2000). However, the Francoist dictatorship, with its autarkic policies during the 40s and 50s, supposed a break-down in the industrialization process. The process restarted again in the 1960s and early 1970s, when state-authorities decided to open the economy to external forces. Then, both local entrepreneurs and large national and foreign firms (mainly from USA, Germany and France) began to intermingle in the building of localized clusters. Within this industrialization process in Spain, each of the selected regions presents its own variety of industrial cluster development. I will base this part on the historical arguments by Domínguez Martín (2002). In Catalonia the process appears to be interesting: despite lacking appropriate natural resources for the industrialization, its commerce and entrepreneurial traditions stimulated a rather early industrial activity, thereby becoming the cradle of industrialization in Spain. Its original strength in silk industry during the 18th century stimulated in the 19th century the emergence of craft industries in textiles and clothing, leather, shoes, furniture and the like, most of it in the surrounding towns around the city of Barcelona. During the 20th century a continuing process of industry diversification took place. At the same time, its diversified agriculture began to modernize and demand for machinery and equipment. As a result, Catalonia has today a significant number of engineering-based industries, such as chemicals, transport machinery (automotive, railways, etc.), and also diverse electronics. The current system in Catalonia displays also an important presence and combination of both LSEs and SMEs (Ahedo, 2006, Hernández Gascón et al., 2005)
In the Basque Country, the process started in the late 19th century, where foreign mining firms (mainly from UK and Belgium) and local trade banks, made Bilbao river area specialize in export oriented heavy-iron industries. Gradually, the iron industries oriented themselves towards the national industrialization process. Based on large firms, controlled by the Bilbao banks’ owner families, the province of Bizkaia became the provider of the iron and heavy- engineering to the Spanish industrialization. In the province of Gipuzkoa, small towns in its interior valleys, hinged upon a traditional local grid of small iron production, evolved from traditional artisan goods, such as weapons, keys, textiles, etc. towards more elaborated consumer goods, such as bicycles, household-appliances, and the like. From the 1960s and 1970s, networks of industrial SMEs and industrial cooperatives emerged in these valleys, thereby Gipuzkoa becoming arguably the densest concentration of industrial activities in the whole Spain. Finally, in the interior province of Alava that connects the Basque Country with the Ebro Valley and Madrid, a further expansion of Bizkaia and Gipuzkoa firms during the 1960s and 1970s made an industrial base around its capital VitoriaGasteiz, which over time became an attractive location for other Basque and Spanish firms, and especially foreign investment, such as Mercedes and Michelin in the late 1980s.1 In the Valencia Region, the emergence of localized industrial clusters was slower and later than in Catalonia. The craft and artisan activities were present already in the 19th century. But the Valencian agriculture, rather concentrated in certain products (fruits, rice, and some groceries), without a necessary critical mass of producers eager to innovate and to improve productivity, did not stimulated special machinery. However, a further combination of diverse but expanding craft industries and a presence of a few large industrial firms (importantly the establishment of Ford in Valencia in 1969) stimulated a slow demand for machinery and production engineering. Interestingly also to say that the relevance of the industry in the region among the local elites and academics was not evident until the early 1980s, and mainly as an effect of the publication of “La via valenciana” by Lluch (1976). In this book written in Catalan Lluch, one of the main promoters of the Faculty of Economics in the University of Valencia, inspired by the emerging literature in Italian on the dynamic system of SMEs and craft-industries in the Third Italy, argued that the Valencia Region presented a similar system of localized industrial districts. We will see later the effects of this publication on the further industrial policy dynamics in the Valencia Region. In Aragon, the main industrial area is around its capital-city of Zaragoza, which is also the geographical capital of the Ebro Valley. In addition to that, during the 1950s and 1960s based on the modernizing agriculture of the interior Ebro Valley the growing demand for specialized machinery and chemicals stimulated the emergence of local industries in these sectors. Zaragona became over time a key centre for transport in the connections between Madrid, Barcelona and the Basque Country. The establishment of General Motors in the outskirts of Zaragoza in 1979 supposed the definitive impulse in the industrialization up-grading, and on the emergence of network of local automotive suppliers. Currently, the province of Zaragoza is considered to be among the first 6 most industrialized provinces in Spain, in terms of industrial production. The other two regions, Navarre and La Rioja have had a latter industrialization process in the second half of the 20th century. Based on their growing agriculture, and due to the proximity to the Basque Country and Zaragoza, a more intensive industrialization started in the decades of the 50s and 60s. Their agriculture has specialized in quality products, such as wine, thinned groceries.
See Ahedo (2004) for references on the Basque Country’s industrialization process.
These regions have also benefited from some the expansion of the Basque industry, rather well responded by local entrepreneurial initiatives. For example, Navarre has evolved from a very agriculture-based economy in the first half of the 20th century to the highest regional industrial GDP in Spain in 2000.
4. Cluster development (1971-2000): key institutions and policy dynamics. In the last three decades or so, industrial clusters in Denmark and Spain have enjoyed a process of institutionalization and policy-relevance. Along the development of new institutions and new policies for industrial development, existing clusters have displayed an institutional embeddeness both rigid and flexible, and new activities have received some kind of institutional attention and policy stimulus. In this section the focus on these institutional and policy-related development that have assisted the adjusting of existing clusters and the emergence of new ones. In Table 4.1. are presented the key institutions and key policy dynamics with respect to the main regional industrial clusters in Denmark and Spain.
Table 4.1. Key Institutions and Policy Dynamics in the Danish and Spanish industrial clusters Key institutions Nationally oriented professional and educational organizations Territorial industry associations in municipalities, provinces and regions. Policy Dynamics State government’s task: many cluster studies and cautious regional application Regional governments’ task; few cluster studies and rapid application
4.1. The Danish Industrial Clusters in Jutland and Funen It is somehow difficult to find separate data on the industrial weight of Jutland and Funen. The official statistics on industrial production do not display the regional differences. However, it would suffice to say that the large region of Jutland-Funen in Denmark is more than the half (almost 3m inhabitants) of the total population (5.4m inhabitants), about the 65-70% of the industrial GDP, but only 11 % of the FDI between 1997-2001 (Jysk-Fynsk Erhversammarvejde, 2002).
4.1.1. The Danish Regional Industrial Clusters A description of the industrial clusters in the year 2000 can give the following picture, as is indicated in Table 4.1. In Table 4.1. the regions are distributed inspired by the new administrative structure that from January 2007 is to have only 5 large regions in the whole Denmark.2
Since 1970 Denmark has been divided in 14 counties and 275 municipalities. From the new reform, from January 2007, there will be 5 large regions (being Copenhagen area one of them) and a reduction in the number of municipalities to 98 municipalities.
Table 4.1. Industrial Specialisation and Clusters in Jutland and Funen Regions JutlandFunen Southern Jutland Mid Jutland Northern Jutland Funen Agro-food Industrial Specialisation and Clusters MetalProduction Technology Mechatronics Steel equipment for milk products Furniture Textiles Mobil Production Communication Technology Gardening Metal Products Industry Furniture & Textiles Transport Energy Environment Services
Source: Erhversredegørelse Jylland-Fyn (2000)
Concerning industrial sector structure, while the Copenhagen area is specialized in knowledge and science based sectors such as medico, health, bio-technology, business services, etc. in Jutland and Funen there are concentrated most technology based sectors, such as agriculture and agro-food (meat and milk products), and a diverse range of engineering and craft industries. In terms of general specific industrial specializations, in the whole area of Jutland and Funen there are three specialized sectors: a) agriculture, specialized in the meat and milk products, representing the most important industry in Denmark; and b) metal and production machinery: this large sector is often called metal-industry, and supposes the key structural sector that comes across many other more specialized sectors; c) environment and wind energy: whereas the main production firms (Vestas that acquired Micon in 2000, and Bonus that was acquired by Siemens Energy in 2005), are located in Jutland (mainly Mid Jutland), important knowledge institutions are located in the Copenhagen Area. With respect to specific regional specializations, Table 4.1. presents the main sectors and subsectors that predominate in the concrete region.3 4.1.2. Cluster Institutions and Cluster Policies in Denmark In the Danish case it is argued that there is a lacking of direct cluster policies, and that the key institutions that integrate and stimulate the creation of collective competition goods for the clusters are in most cases related to craft-labour organizations and educational institutions. Therefore, in Table 4.2., the main cluster-institutions are presented under the categories of knowledge institutions and network organizations.
See Christiansen and Munksgaard (2002) for a historical study of the cluster of steel equipment for milk products in the Triangle Area (in the area covered by the municipalities of Kolding, Vejle and Frederecia, in between Jutland and Funen), and Lorentzen (1998) for an account of the Salling-Skive furniture cluster in comparison with other furniture clusters in Europe.
Why has not Denmark developed direct cluster policies?.4 In this regard, it can be said that authorities have used more resources in analysis and studies than on direct interventions. This can be understood by various reasons. In the administrative structure of the Danish industrial policy, the central government defines the general framework for industrial policy, the municipalities are too small to carry out substantial cluster policies, and the counties are limited in resources and legitimacy to intervene in the industrial private dynamics.5 Furthermore, some counties have tried to do their best in cluster policies. For example, the counties of Northern Jutland, Vejle in Mid-South Jutland, and recently Viborg in West Jutland and Funen, have developed certain initiatives. Table 4.2. Key institutions in the main industrial clusters Jutland and Funen, 2006 Knowledge Institution Herning Textile School (1960s), and Clothing Technology Institute (1980s) Skive Technical School (1970s) NOVI Science Park (1998) Aalborg University Centre for Steel (2002), with key participation of Danish Technology Institute RoboCluster (2002), with key participation of Institute Mads Clausen (Danfoss-Southern Denmark University) (Danfoss) Aarslev Development Centre Center for Software Innovation AluCluster Center for Aluminium Consultancy and Training (1999) Knowledge Centre for Wind Energy Offshore Center Network Organization Denmark’s Association of Textile Producers National Guild of Cabinet-Makers NorCom
Furniture Mobil Communication Steel-Machinery for Milk-Products Production Robotics
Gardening Products Mechatronics Aluminium
Wind Energy Offshore
Danish Wind Energy Association
Main sources: Det jysk-fynske erhvers-samarbejde (2003 and 2002)
However, one of the most significant policy initiatives has been the collaboration between Jutland and Funen in business and industrial policies. This inter-regional collaboration started in 1998, and was financially supported by173 municipalities, 8 counties and the Ministry for Industry. The
Denmark and Sweden are two of the countries that appear to have enjoyed earlier academic or research studies concerning industrial agglomerations and concentrations. As pointed by Drejer et al (1999), inspiration by the Swedish economist Dahmén’s research on development blocks and industrial complexes since the 1950s and 1960s was used in the early 1980s by various Danish institutions, such as the Danish Technology Council, in order to study innovation processes in inter-firm relations systems. This tradition became later part of broader academic interest, both within economics (Maskell, Lorentzen, etc.) and sociology (Kristensen, etc), and management (Christensen, etc.). All this has made making Denmark one of the good examples of industrial clustering. Further studies by consultancy firms, such as Oxford Research, have contributed to the policy application of the cluster approach. 5 The report by Erhversfremme Styrelsen (2001) (Ministry’s Directorate for Industrial Development) was the first official document where the cluster approach was used as analytical tool, and suggested as instrument for industrial policy.
presidency and secretariat are hold by County of Århus, which is the largest county in the two regions. The main strategy has focused on bringing together business and firms with education and research institutions. By 2003 about 40 projects have been financed, and many of them have been designed to stimulate various relevant industrial clusters (Det jysk-fynske erhvers-samarbejde, 2003). Lately, the new regional public administrative structure of 5 large regions in Denmark to be started in January 2007, with main tasks in business and industrial development policies, could provide a better plausibility framework for more direct cluster-oriented policies. Regarding key cluster-institutions, as said before, most of them are related to education and research activities. It is necessary to recall here that the Nordic countries have historically presented some of the most developed educational and training systems in the Western world, not only for children and youth, but also for adults and workers. Therefore, it is not surprising the importance of knowledge institutions for the well-functioning and development of the industrial clusters.6 An interesting aspect of these knowledge institutions is that they provide settings for social networks and informal relation between workers and professionals. In this sense, they reinforce the importance of the craft and professional organizations in the working of the clusters.
4.2. The Spanish Industrial Clusters in the Ebro-Mediterranean Axis In the first part of this section I will describe the general structures and main features of the regional Industrial Clusters (IC) located in the Ebro Valley and the Valencia Region. In the second part, I will describe the main aspects concerning cluster-oriented policies and cluster-related institutions. 4.2.1. The Spanish Regional Industrial Clusters In Table 4.3., the regions of the Ebro-Mediterranean Axis have a clearly higher level of industrial activities than the average industrial GDP for the whole Spain. This area is therefore the industrial axis in Spain, which together with other provinces and towns in Northern Castille, Atlantic and Mediterranean coasts, and some Madrid Region towns dominate the industrial landscape of Spain. Table 4.3. Average indicators of the selected regions’ industrial weight for the period 1995-2005. Share of total population 17% 10% 5,5% 3% 1,35% 0,67% 42 mill. Industrial GDP in each region
Catalonia Valencia Region Basque Country Aragon Navarre La Rioja Spain
32% 27% 33% 27% 21%
Share of total industrial GDP 25% 11% 9,5 % 4% 3% 1,2% 100%
Share of GDP 19% 10% 6,5% 3,5% 1,65% 1% 100%
Mainland (2001) analyses the role played by the applied and technical education institutions in the labour market policies at the regional and local level in three different counties. He studies how these institutions participate in the tripartite policy-fora, and concludes that the county in Jutland has the bet mix of consensus and negotiation.
Source: several reports from the INE (Instituto Nacional de Estadística), contrasted with the regional statistic institutes.
As can be seen in Table 4.4., most industrial activities contain an important engineering orientation. Its sector structure presents a balance between three large sectors: the traditional craft-like industries, with textiles being the most important, automotive, and diverse engineering fields, such as capital-goods, electronics, machine-tools, and small machinery.
Table 4.4. Main specializations in the regions Region Aragon Basque Country Catalonia Main Sectors with Industrial Clusters Agro-industry Machine-Tools Electronics Automotive Metal-machinery Several small engineering fields. Agro-food-wine Agro-food-wine Shoes Furniture Automotive Automotive Energy Chemicals Textiles Consumer electronics Automotive Automotive Ceramics
Household Appliances Paper-Pulp Agro-food-drinks Leather Graphics – Publishing Renewable Energies Textiles Toys
Navarre Rioja Valencia
Source: various public documents and academic literature.
It is very well-known the weight of the automotive industry in Spain, which is in the last decades among the first 10 world-wide car producing countries, and its higher relative importance in carcomponent industry (Catalan, 2000). There are also regional specialisations: in the Basque Country and Navarre engineering fields predominate; in Catalonia its sector structure presents a mix of traditional craft industries, automotive and other engineering fields, like chemicals; in the Valencia Region the weight is higher in the traditional craft industries, with an important automotive districts around the Ford assembly plant. 4.2.2. Cluster Institutions and Cluster Policies in Spain In Spain, despite a few isolated exceptions in the Valencia Region and Catalonia, available knowledge or research on industrial clusters or districts did not start until the 1990s. This lacking of available public knowledge has to be considered within the situation of the emerging new social science under democracy.7 However, during the 1980s and 1990s a process of cluster-organization building took place. This process was significantly influenced by the industrial policy initiatives by the Regional Governments. The most important is that these cluster-related policy initiatives supposed a significant advancement in the relational and collaboration framework between empowered regional governments and regional industries, within the broader macro-institutional
After the hiring of the Basque and Catalan Governments of the consultancy Monitor in the early 1990s in order to carry out cluster analysis, and its further policy applications in these two regions, social scientists in general and business and policy consultants in particular have begun to pay more attention to the phenomenon.
constructions under democratic conditions of state-society relations, government-business relations and neo-corporatist arrangements.
Table 4.5. Key institutions (network organization) in the main regional Spanish industrial clusters (year 2006) Region Basque Country Industrial Cluster Machine-Tools Electronics Automotive Household Appliances Energy Paper-Pulp Automotive Chemicals Metallurgy and metal products Textiles, clothing and leather Engineering & Diverse machinery and mechanical equipment Transport machinery Network Organization Spanish Association of Machine-Tool Producers Basque Association of Electronics and IT Industry Basque Cluster-Association of Automotive Basque Cluster-Association of Household Appliances Basque Cluster-Association of Energy Basque Cluster-Association of Paper Catalan Association of matrixes and dies, and its Technology Centre Idiada Spanish Associations of Chemical Industries Various Spanish, Catalan and local industry associations Various local producer associations and guilds in Terrasa, Sabadell, Mataró, Maresme, etc. Catalan Institute of Technology (Catalan Guild of Engineers) Two newly created organizations: Barcelona Aeronautics and Space Association; RailGrup Catalan guilds of graphics and publishing Various Spanish Industry Associations
Graphics – Publishing Electronics (consumer and equipment) Agro-industry (food and Various Catalan and local associations and guilds drink) Wood and Furniture Various local producer industry associations Shoes Technology Institute for Shoe-Making Valencia Furniture Technology Institute for Furniture Automotive Technology Institute for Metal-Mechanic Textiles Technology Institute for Textile Ceramics Technology Institute for Ceramics Toys Technology Institute for Toys Main sources: Ahedo (2006) and Hernández Gascón et al (2005). In the Basque Autonomous Community, the Basque Cluster-Associations were established during the cluster policy of Basque Government in the 1990s. Since 1997, through a cluster-agreement these organisations have received a basic but important financial aid by the Basque Government, as they have improved their financial autonomy and developed their own strategies. In return, they have contributed to the definition and implementation of different Basque Government’s horizontal industrial policies, such as innovation plans, quality improvement in management, and
internationalisation. Generally, these cluster-associations try to work in inclusive and integrating ways for the entire industrial sector or sub-sector in the whole Basque Autonomous Community8 In Catalonia there are two main aspects regarding the organisational dimension of the clusters: a) within the traditional Catalan industries, such as textile, clothing and the like, there have for long time been local and regional associations guilds, and other kinds of networks; b) in the more recent industries, such as automotive, chemicals, electronics, and the like, their more mixed business structures with the presence of foreign firms, and other powerful actors, have made the construction process of cluster-organizations slower and in many cases still not-constituted. After the microcluster policy from early-mid 1990s, under the government of the conservative Catalan nationalists, with the new leftist government since Autumn 2003 there has no been major changes in the main objective in supporting the regional strong industrial sectors (Ahedo, 2006). In the Valencia Region, the first regional government, led by the social democrats, started in the mid 1980s a policy of creating the so-called Technology Institutes (TI). Some academics, inspired by Lluch’s arguments, proposed to follow the industrial district model of the Third Italy, and therefore to emulate a kind of Emilia-Romagna’s ERVET system of sector support to the local industrial specialisations, through a network of sector-oriented Technology Institutes. Under the Spanish legal framework, the TI were constituted as non-profit associations for industrial research. Two key aspects in the political design of these TI were: a) the objective to attract as many firms as possible as members, and thus to balance their financing between government aid and member fees; and b) the control of all TI by the Valencia’s regional development agency (IMPIVA). An interesting aspect in the application was that the location of these sector-oriented TI was in close proximity to the main local industrial clusters or districts (Molina-Morales, et al., 2002, Beneyto, 2001), and in many cases in collaboration with the existing industry association of the cluster. The TI system developed over time a network strategy, by opening offices and centres in other smaller industrial districts. This policy suffered a pause and a political evaluation when the regional conservatives gained the regional government in 1995, and tried to emphasise innovation policy and reduce the TI-based industrial policy. The conservatives are still in the government since 2003 elections, but late developments point to a new more positive consideration of the TI-based policy and the role of the IMPIVA. The other two Ebro Valley Regions have not developed specific cluster policies. Industrial sector oriented policies, however, can be identified in Navarre’s innovation policies, in Aragon’s industrial policies, and the like. As general conclusions, in Spain during the 1980s and 1990s a double institutional process took place. On the one hand, a decentralization of industrial policies to the Autonomous Regions. In due course, after the industrial reconversion (re-structuring) programs, led by the Central Government during the 1980s, in the 1990s the most industrialized regions, that is, Valencia Region, Basque Country and Catalonia, started to develop and carry out specific industrial policies adapted to their concrete regional industries. On the other hand, regional industrial associationism has slowly emerged. In this process, each region has displayed different dynamics, depending on both its tradition for employer collective action, and its particular industrial sector structure. Whereas in Catalonia the tradition for institutionally oriented local associationism in the textile industry stimulated similar dynamics in local industries, in the Valencia Region, a small tradition for local
See Ahedo, 2004 for a detailed account of the Basque Cluster Policy.
industry associations has not brought about integration in the region’s industry interest representation. In the Basque Country, its rather concentrated industrial structure and its strong federal system of interest representation has slowed down the emergence of regional industry associations. In this respect, the constitution of sectoral Cluster-Associations has been an nonintended but innovative solution to the previous lacking Government-Industry collaboration.
5. Analysis: Institutional similarities and differences In this section, I analyse here the main similarities and differences concerning their institutional factors in order to explain the existence of this similar phenomenon in both countries, and institutional differences that explain why these regional industrial clusters operate rather differently.
Table 5.1. Main similarities and differences in the institutional system of industrial clusters in Denmark (Jutland-Funen) and Spain (Ebro-Mediterranean Axis) in the 1980s and 1990s. Similarities The importance of locality and proximity - municipality - province - region Decentralized industrial relations In the 1980s and 1990s a growing importance of sector, region-province and firm in collective bargaining. Differences Key cluster-institutions Denmark: professional and educational organizations Spain: territorial industry associations Organization of industrial interests Denmark: strong national labour unions, employer associations and sector associations Spain: strong territorial labour unions, employer and SME associations.
As for the Spanish case, I will draw the analysis from my own research on comparing different regional industrial policies and business systems (see Ahedo 2006 for the case of Basque Country and Catalonia). As for the Danish case, the other main source of inspiration is the sociologicallyoriented account of the common functioning of the Danish industrial districts, provided by P. H. Kristiansen. Specifically, Kristensen (1992, 1994) summarizes the similar key organizational features of how the knitwear-garment (Herning-Ikast-Brande districts) and wood-furniture (SallingSkive area), the two most important traditional industrial districts operate: a) the industries are dominates by small, locally-owned firms; b) they call upon a strong tradition of entrepreneurship and self-employment; c) they appear to have deliberately pursued strategies aimed at the high quality, design-conscious and export-market; d) they are able to make use of a decentralized structure of small, specialized firms to respond flexibly to new fashions and technical specifications; e) flexibility, quality and a capacity for innovation is greatly facilitated by the maintenance of a craft tradition and capability; f) the districts can count on well-developed local service infrastructures; g) close family ties, together with craft relations, play an important part; h) both competitive and co-operative philosophies and practices exist side by side; i) people’s craft identity is important for linking individuals and firms to the larger, national labour market, the craft educational system and other enterprises, throughout the country; j) the engineering and metal-using industry plays a vital role in the proper functioning of clusters of small firms organized in industrial
districts; l) industrial relations and the wage setting procedures are significant elements. Another important element is the lacking of SME associations.9 5.1. Similarities Based on what has been explained on the particular cases, it can be pointed out an arguably general similarity concerning the historical pattern of regional industrialization process from dynamic agriculture activities, trough demanding agro-food industries and to increasingly more complex craft and engineering products. However, the focus here is on two institutional aspects. The importance of locality and proximity In Denmark, there are three politico-geographical levels. The importance of the municipality in the economic and political life is very high, one of the highest in Europe (Knudsen, 1993). A strong local democratic culture can be argued to be the main explanatory of the consensus and quality of the Danish democracy. Municipality politics have mattered, and therefore, industrial and economic activities have also been matter of politics at this level. This social space for economic and industrial pro-activity happens to be higher in Jutland-Funen than in Copenhagen, the latter being more dependent on the state-budget for its economic pro-activity. The counties or regions: the supra-municipality level or county has just been an intermediary level between municipality and state, but without a real significance for labour and socio-economic politics. Since early 1970s, the 14 counties (amter) have enjoyed several important public-policy areas, such as health, transport, adult education, etc., but they have not been important actors in relation to industrial policies. The state in Denmark is the most powerful political level, with a long tradition of legitimate public officials and policies, and open state-society relations. In Spain, there are four politico-geographical levels. The municipality has not been a relevant political unit, and still its weight has not improved that much: municipalities administered the 12% of the public expenditures in 1975 and the 16% in 2004. However, municipality local life has been the frame of much social relations and collective identity. Local traditions, rituals and “fiestas” provide the glue for the social life, the social capital the bring people together, which compose the social infrastructure for certain kind of collaboration in industrial and economic activities. This cultural factor is rather typical of Mediterranean societies, with its outdoor life and long cultural history. The province has been historically the most important administrative unit, since the 19th century until now. There are two exceptional cases: the even higher importance of the province in the Basque Country, and the less importance of the province in Catalonia and some other small areas. The province has therefore been an important politico-administrative unit, representing the state. The regions have turned out to be most growing political institutions in Spain’s latest history. The Autonomous Regions or Communities non-exiting in 1975 administer in 2005 about the 33-35 % of the public expenditures. They have also gained key responsibilities in industrial policies, and in other related areas, such as labour, education, innovation, etc. The state has been the most important level, as coming from an historical colonial empire, and a dictatorship. However, the
As Kristensen also indicates: “Denmark has no organizations representing small firms at the local level. Thus, there are no organizations, which could act as bridges between a locality’s enterprises, communal and regional politics, and the national administrative and political bodies. The association of all crafts, which was formed after the prohibition of the guild system in 1870s, had long been dead when the SMEs from the railway towns needed it. What existed in fact were associations built around specialized crafts, trades or industries, organising small and large enterprises together on a national scale. Politics of space and size in such associations are difficult, and they work very slow” (1992, p. 162).
strong regionalization and federalization process in Spain has weakened the financial power of the state: it administered the 85 % of public expenditures in 1975 and in 2005 it has been the 50 %. Decentralized industrial relations In the 1980s and 1990s in most European countries, within the context of the active neo-liberal ideological movement, a growing importance of the sector, region-province and firm in the industrial relations have eroded the so-far centralized systems, and reinforced the decentralized systems. This similarity has been experienced differently in each country. In Denmark, the traditional national and centralized corporatist policies started in the 1980s to take steps towards decentralization to sub-national levels (regions and communes), sectors, and more importantly to firms. This process coincided with the adoption of some neo-liberal policies, which in Denmark was even strengthened by two specific Danish features. On the one hand, the traditional importance of local politics. In fact, in the pre-II World War, the basic level of collective bargaining was the sector level. On the other hand, the new decentralization was reinforced by legal developments in worker participation at the workplace, as the 1974 law enabled that workers in firms with more than 35 employees to choice a third of representation in the firm’s Board of Directors. In sum, the Danish system is defined as a “centralized decentralization” or “coordinated decentralized system” (Campbell, Hall and Pedersen, 2006). In Spain, the province and sector level of collective bargaining has been the most important level in the last three decades. About 60-70 % of employees are covered by province sector agreements. In fact, the first collective agreement signed in democracy was in the metal industry in the Basque province of Gipuzkoa in 1977. In the last three decades, there has been of course a permanent dispute between centralization dynamics mainly advocated by the peak business associations, and decentralization dynamics defended by regional and province associations. After more than 20 years of collective bargaining the province and sector level has become even stronger. This reflects the clear formalization of territorial decentralization in the Spanish politics (Miguélez and Prieto, 1999). 5.2. Differences Key cluster-institutions In Denmark, they key cluster-institutions are argued to be the professional and educational organisations. The organization of craft and professional interests is arguably the longest tradition in Denmark. This is an effect of the early high levels of high literacy that the Nordic countries already at the beginning of the 20th century. As has been seen above these professional identities and organizations are behind many of the most supporting institutions of the clusters. Many of the most important industrial clusters have education and knowledge organizations. In the most traditional clusters: in the furniture cluster in Salling-Skive and textiles cluster in Herning-Ikast educational institutions have been the major sources of competitiveness and networking for the clusters. In the newer clusters educational institutions have appeared to play key roles too. In the North-Jutland mobile and tele-communication cluster, in the association NorCom Aalborg University plays a critical role; in fact, NorCom is located in the Science Park besides the University. The same happened in other engineering clusters, such as robotics, gardening, etc. In general, the tendency in the last decades has been to increase the links and collaboration between higher-education
institutions, such as universities, and research institutes, and the industrial private actors. In most cases, the constitution of education institutions has been the broadest instrument to strengthen this collaboration. In Spain the key cluster-institutions are argued to be the territorial industry associations. Within the traditional territorial politics in Spain, business associations in provinces and localities were among the first movers in the process of interest organization in the late 1970s. A number of local associations in the Mediterranean area were organized also very early as an effect of the local cultural life in the Mediterranean culture. Although they had to cope with the representative role of the peak national and regional associations, many province SME associations have still defended the interests of the province industrial sectors. As said before, it was also during the emergence and institutionalization of regional industrial policies that many regional and province industry associations have been constructed and developed. Organization of industrial interests: labour unions and SME associations In Denmark there are strong labour unions but weak SME associations. In Denmark business interests are organised in two main organisations: DA (Danskarbejdgiveforening) as employer association dealing with collective bargaining and other industrial relation issues; and DI (Dansk Industri), a kind of trade association, specialised in services and defence of the industrialist’s interests. The 19th century organization Dansk Håndværksrådet (Danish Federation of Small and Medium-Sized Enterprises) does not still have the necessary power to participate in industrial and labour market policies. Regarding labour, the unified umbrella organisation, LO (Lands Organization) integrates most kinds of labour and professional interests, while cartels and sector unions maintain their autonomy. Both DA and LO have been the main characters in the construction of the strong neo-corporatist system of consultation and consensus-building that Denmark has developed throughout the 20th century. In Spain labour unions are weak but rather respected and legitimate, and the SME business associations have increased their strength in the last decades. In Spain business has its unified voice through the peak business association CEOE (Confederación Española de Organizaciones Empresariales-Spanish Confederation of Employers’ Organizations). CEOE has in the last decades developed an organizational structure that tries to balance the main three interests: the regional business associations, the SME interests represented in the CEPYME (Confederación Española de la Pequeña y Mediana Empresa- Spanish Confederation of SMEs), and the large sectors’ associations (such as commerce, construction, and the like). The main source of conflict in this system has been the contestation by the industrialized regions, such as Catalonia and Basque Country, who have defended their industrial interests. Labour gets a more complex organisation. Since the arrival of democracy, two main unions have monopolized the representation of labour. UGT (Unión General de Trabajadores-General Workers’ Confederation) of social democrat ideology and traditional relations with the Spanish social democrat party, and CCOO (Comisiones Obreras-Workers’ Commissions), that with some ideological linkages with the communist and related ideological groups has pursued a mix of pragmatic and radical labour union strategies. These two unions have received the votes of about 70-75% of workers in the last decades. The remaining percentages belong to other class unions and sector or professional unions. Concerning the latter, although both UGT and CCOO have developed structures to integrate the sector and professional interests, these interests have experienced an intensive process of self-organisation, especially in the more education-based regulates professions, such as nursery, technicians, various bachelors, etc.
The only relevant regional unions are the nationalist unions of Basque Country, where the moderate ELA-STV (Eusko Langileen Alkartasuna-Solidaridad de Trabajadores Vascos-Basque Workers’ Solidarity) and the more radical LAB (Langile Abertzaleen Batasuna-Union of Worker Nationalists) have achieved to represent about the 60% of employees (40-45% and 15-20 % respectively), and in Galicia where the INTG-CIG (Intersindical Nacionalista de Trabajadores Gallegos-Confederación Intersíndcal Gallegal-National Union of Galician Workers) has gained about a 1/3 of the representation.
6. Conclusions In Denmark and Spain there are regional industrial clusters, where networks of SMEs play an important role. These industrial clusters have been the result of a historical construction process. In the national industrialization process, these relevant peripheries have used their strong social structures and dynamic traditions to develop industrial activities, mainly in engineering and craft industries. Geography has mattered much as to enable the proximity and linkages between entrepreneurial groups. Society has also played its role, as these regional societies have based their industrial development in dynamic social organizations and societal traditions. In both countries, the cluster-approach to industrial policy has been very welcome as a policy instrument to support the upgrading and on-going adjusting of the regional industries. Despite these and other similarities, the functioning of the industrial clusters in Denmark and Spain is substantially different. This distinction is evident in two respects. Concerning the key institutions that oil the machinery of the clusters, these are various educational and training institutions in Denmark, whereas in Spain these are the growing regional and province industry associations. Regarding the cluster-oriented policies, while in Denmark the policy process has been more cautious and multi-lateral across the politico-administrative scales, in Spain, the regional governments have rapidly used the approach to support their regional industries, although in different ways responding the particular business structures of each region.
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