Italian industrial districts as cognitive systems: Are they still reproducible?

Abstract

Adopting a knowledge-based perspective, this study develops a framework of how Italian industrial districts (IDs) operate and evolve as cognitive systems. First, we analyse the mechanisms that facilitate knowledge diffusion across firms within IDs, the enabler of cross-firm knowledge transfer (absorptive capacity) and the process of producing new knowledge by combination. Within this analysis, we consider the formation of new firms resulting from the break-away of human resources from existing district firms (spin-offs) as a particular form of knowledge transfer and production within districts. Knowledge production by combination may take place not only within boundaries of IDs, but also involve external sources. We suggest that innovations made by combining internal and external knowledge have played an important role in shaping the evolutionary trajectories of IDs. Finally, again from the cognitive perspective, we address the issue of how globalization impacts on district systems, concentrating on the positive role that two different types of local actors play in their reproduction and evolution: the global–local firms and institutions providing knowledge-intensive business services.

Keywords:

• industrial district
• knowledge transfer
• absorptive capacity
• knowledge combination
• globalization
• knowledge gatekeeper

Acknowledgements

The authors would like to thank the editor and the anonymous reviewers for their helpful comments and discussion of this study. Suzanne Berger, Giancarlo Corò, Robert Gibbons, Hakan Håkansson, Richard Lester, Richard Locke, Michael Piore, Enzo Rullani, Raffaella Tabacco, participants at the British Academy of Management 2006 Annual Conference in Belfast and at the IMP 2006 Conference at Bocconi University in Milan provided feedback and comments on earlier versions. Research funded by CROMA Bocconi, MIUR, and supported by the Industrial Performance Center, MIT.

Notes

1. A first version of this study was published in 1979 in Italian.

2. As a matter of fact, vicarious learning and training transfer (Baldwin and Ford 1988; Blume et al. 2010) take place when apprentices observe expert workers while doing their work. In most of the cases, learning takes place with virtually no formal communication, on the job, by observation, examples and trials and errors. Verbal communication and explicit instruction may accompany behaviours to favour the observer's learning process (Nonaka and Takeuchi 1995). In the case of pure observation, the observer comes into contact with the tacit knowledge of the observed person, which emerges in the actions in a semi-explicit state, in a similar way to that described for artefacts.

3. Absorptive capacity has been defined more restrictively compared to the classic definition proposed by Cohen and Levinthal (1990). The two authors extend the process of knowledge absorption to the utilization phase. However, it is useful to keep this phase distinct (Zahra and George 2002). In particular, knowledge can be correctly assimilated and therefore available for use, but remain unused for a variety of reasons (Davenport and Prusak 1998). For example, use could be too costly, or differences and internal conflicts on whether or not to use the knowledge acquired could arise.

4. In Nonaka's works, the term ‘combination’ is used instead to indicate only the third possibility (Nonaka 1994; Nonaka and Takeuchi 1995).

5. To that which has already emerged with reference to the relationships, we can add that the codification of knowledge is the basis of the foreign investments realized by the leader firms (knowledge transfer abroad).

6. We use the acronym KIBS to indicate both the knowledge-intensive services as well as the organizations supplying the same.

7. This information has been supplied by the managing director of CATAS during an interview given in July 2009.

8. Without specific reference to IDs, this formula has also been described by Ernst and Kim (2002), who talk of higher tier lead suppliers.