Innovation Strategy

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Innovation Strategy and Regional Innovation
Systems The Agro-food system in Emilia-Romagna
Claudia Degli Esposti Head of the Regional
Marketing Unit
The Agro-Food Industry as Engine for Growth and
Wealth in Africa
18 - 20 June 2008 FAO Headquarters Rome, Italy
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Summary

• The Industrial District concept and its
  historical evolution
• The Industrial policies in Emilia-Romagna the
  ERVETs role
• The Agro-food Regional Innovation System in
  Emilia- Romagna
• The agro-food system in Emilia-Romagna, between
  tradition and innovation a general outlook
• Conclusion and proposals

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The Industrial District concept and its
historical evolution
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The Industrial district concept

• The Industrial districts are groups of companies
  and institutions co-located in a specific
  geographic region and linked by interdependencies
  in providing a related group of products. Because
  of the proximity among them, the constituents
  enjoy economic benefit from specific
  externalities, like for example
• specialized human resources
• suppliers
• learning from closes interaction with customers
  or suppliers
• knowledge local advisory centres, training
  centres, etc.
• The IDs model of development is widely studied
  in literature for its economic performances. At
  European level the concept is more known as
  cluster, even if this concept is more related
  with technological and innovation issues. In last
  years high tech clusters creation is considered
  an important strategy for the competitiveness of
  the advanced regions

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From IDs to

• The concept of IDs strictly defined, in the last
  years has shown increasing difficulties to be the
  unique point of reference for territorial
  policies
• Issues concerning the local development of the
  region are too narrowly represented by IDs
• Changes occurred in the inter-firms relations and
  in the sectoral composition of IDs
• Increasing range of entrepreneurial opportunities
  
• Opening of productive systems
• Productive and financial concentration by leader
  companies
• Acquisitions from and to foreign countries

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.Supply value Chains
TWO COMPLEMENTARY APPROACHES  
Industrial District Dense network of
relationships among socio-economic players
(companies, intermediaries, local authorities)
inside a specific territorial area

• Supply value chain
• Productive system formed by
• productive chain and companies network
• cognitive factors (competence and knowledge)
• territorial actors (institutions and social
  capital)
• relations among the above mentioned elements

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From ID to Supply Value Chain highlights
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• The Industrial Policies
• in Emilia-Romagna
• Ervets role

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Industrial Policy Emilia-Romagna Regions role

• 1970 creation of Regions, foreseen by the
  national Constitution
• Delegated powers on agriculture, vocational
  training, handicraft, no competence on industrial
  matters
• Competitiveness between national and regional
  model of governance encouraged innovative
  policies
• Spontaneous growth of Micro and Small-Medium
  enterprises (SMEs)
• Important role played by business associations
  and unions influencing local policy making

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Historical evolution
is a corporation established
in 1974 as a limited company by the Emilia
Romagna Regional Government. Its mission is
focused on ensuring a technical support to
regional development policies devoted to social,
economic and territorial valorisation favouring
cooperation processes and resources integration

• 70s Policy of Industrial Settlements Areas
• 80s Policy of Real services
• From 2003 Re-positioning Regional Law n. 5

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The Agro-food Regional Innovation System in
Emilia-Romagna
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Emilia Romagna Region Manufacturing
specializations 2001
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Emilia Romagna Region Manufacturing
specializations 2001
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Food and beverage Industry 2001
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Agro-food Players in the Regional System
COMPANIES AND ASSOCIATIONS
EMILIA - ROMAGNA REGIONAL NETWORK FOR INDUSTRIAL
RESEARCH
PUBLIC BODIES

• Agri 2000 - society for services in agrofood
  research and environment (Bo)
• Research Centre for Vegetable- which promotes
  research, experimentation and dissemination of
  producitve (Fc)
• Fruit and Vegetable Produce Service Centre for
  the competitiveness of Italian fruit and
  vegetables - (Fe)
• Business Studies Centre - for vocational training
  specialized in food and agriculture - (Bo)
• Italian Centre Services from Earth to the Table -
  service centre for quality, innovation and safety
  in food chains (Pr)
• Food and Logistics Centre of Parma market
  activity of fruit and vegetable
• Italian Consortium for Research on quality and
  food safety (Pr)

• EFSA European Food Safety Authority (Pr)
• SSICA - Experimental Station for the Canned Food
  Industry (Pr)
• SMEA - High School in Food Economics (Pc)
• SOPRIP Local development Agency (Parma e
  Piacenza)
• Local Action Groups
• Antico Frignano e Appennino Reggiano
• Appennino Bolognese
• L'Altra Romagna
• DELTA 2000
• SOPRIP

RESEARCH LABORATORIES

• CEREALABNon GM Biotechonologies Laboratory for
  the Seed Industry (Re)
• SIQUALRegional Laboratory for Food Safety and
  Quality (Pr)
• TECALLaboratory TECnologie facilities for the
  Food Industry (Pr)
• RESEARCH CENTRES
• SIQUILACACentre for Innovation, Safety and
  Quality in the Dairy Industry (Re)
• CITIMAPCentre for Innovation in the use of
  remote Sensing in the Agricultural Mechanical
  Industry (Pc)
• PROATTIVO
• Romagna Centre for Innovation (Fc)

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Innovation systems in the Agro-food Industry
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The case of SIQUILACA Centre for Innovation,
Security and Quality Dairy Industry

• Partner and scientific project collaboratorations

Consortium

• CFPR - Consortium of Cheese Parmigiano Reggiano
  (Reggio Emilia)

Research Centre

• Research Centre for Animal Production (Reggio
  Emilia)

Companies

• ARTECASEARIA (Modena)
• CLC - Centre Lattiero Caseario (Parma)
• SALCHIM - Private Laboratory for analysis (Reggio
  Emilia)

University

• DIPROVAL University of Bologna - Department of
  Microbiology (Reggio Emilia)

• Targets

• To raise awareness among businesses of the use of
  new tools for assessing the quality of hygiene of
  raw materials
• To develop methodologies for the sharing and
  transfer of information and to adapt tools to
  control the production process and manage
  contractual relationships between operators

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The SIQUILACA and Research

• Background
• Coordination activities, to support the
  development and promotion of the relationship
  between the High Technology Network of Emilia -
  Romagna and the productive regional fabric
• Purpose
• Reaching a common approach for the development of
  innovative technologies in the dairy sector,
  taking into account the needs of the different
  players in the specific sector
• Methodology Thematic Focus Group
• To organize and manage meetings between relevant
  players from the territory for a collective
  discussion leading to issues such as packaging
  milk product, dairy products as functional foods
  fast and processing controls for milk
  productions.
• Players involved researchers and companies
• University of Bologna Department of Biochimica
  and University of Cattolica Institute of
  Microbiology
• ACMA s.p.a., Consortium of Parmigiano Reggiano,
  Granarolo s.p.a., Orlandini s.a.s., Parmalat
  s.p.a, Sympac Corazza, Termocontrol s.r.l.
• Siqual and Tecal (Research Laboratories)
• Target
• The innovation of production systems for small
  businesses the difficulty to match the new
  European regulations relating to food quality and
  safety required by large enterprises with tha
  updating of quality control systems.

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Regional Innovation Policies
The Regional Policies are targeted both at
companies and players in innovation

• The Regional Programme for Rural Development
  2007-2013
• Competitiveness of companies in agriculture,
  credit for companies investing in agriculture,
  environmental and rural space, quality of life
  and diversification of activities
• The Regional Operative Programme (ERDF), the
  Regional Programme for Research and Transfer of
  Technology (PRITT), Three Yearly Programme for
  productive activities.
• Company competitiveness and innovation,
  company-research centres and university projects,
  energy and environmental innovation, support to
  the Regional Network for research and
  technological transfer, creation of Technopoles,
  eco-sustainable tourism
• Special Territorial Programmes
• Negotiated programmes with local players, some of
  them targeted at agro-food cluster promotion (ex.
  in the Basso Ferrarese area)

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Consumption trends and eating habits

• Ageing population diversification and variety of
  diet related to health needs of older people -
  23 of the population in Emilia - Romagna
• Increased immigration and multi-ethnicity
  diffusion of "new" food typical of the countries
  of origin of the immigrants 7.5 of the
  population in Emilia - Romagna
• Spread of mono-nuclear families and greater
  participation of women in the workplace
  increased consumption outside the home and
  greater consumption of frozen precooked foods
• Emergence of a consumer more "aware" of food
  consumption and more "attentive" to diet new
  approach towards the safer food for all citizens
• Family expenditure dedicated to food basket
  oriented at the purchase of food dictated by
  quality and price
• The GDO has a new contractual relationship with
  the suppliers, based on requirements for more
  high quality products

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The strategies for the promotion of agro-food

• Quality
• Quality indicators (Geographic Indicator of
  Origin and traditional methods used)
• Certification systems
• Product Traceability
• Diffusion of organic productions
• Regional and local marketing
• Promotion of brands of excellence (Parmigiano
  Reggiano cheese, Parma ham, etc.)
• Territorial marketing actions, promotion of local
  supply, Food and wine Trails, integration of
  agro-food cluster with culture and tourism
• Internationalization
• International fairs, advising on entering the new
  markets and the promotion of partnerships
• Specific policies for cooperation with
  Mediterranean countries

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The system, between tradition and innovation a
general outlook
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The agro-food system in Emilia-Romagna

• A sound specialization in agriculture and the
  agro-food industry, based on local resources and
  vocations and with a good potential for growth
• Having grown between local traditions and
  innovation, the system is today central to Europe
  due to its positive performance in terms of
  export, quality of production and it is well
  linked to market demand.
• The agro-food system of the Emilia-Romagna region
  bases its competitiveness on the innovation of
  products, new technological and organizative
  processes and logistics.
• The Emilia-Romagna agro-food industry is part of
  the Made in Italy products and it is recognized
  for its typical production of high quality.

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The composition of agro-food system
Horizontal Activities for All Clusters and
Specific for Agro-food
Horizontal Activities for All Clusters and Not
Specific for Agro-food
Legenda
Specific for agro-food
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and the typical products

• Cold Cuts Culatello of Zibello, Coppa
  Piacentina, Prosciutto Crudo Parma and Modena,
  Zampone and Cotechino Modena, Mortadella Bologna,
  Pancetta Piacentina, Salame Piacentino
• Wines Lambrusco  and other wines
• Balsamic Vinegar from Modena and Reggio Emilia
• Extra Virgin Olive Oils from Romagna and
  Brisighella (Ravenna)
• Cheeses Parmigiano Reggiano, Pecorino of Fossa
• Peaches of Romagna
• Pears from Emilia - Romagna

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A general outlook
2007

• Agricultural production

77,000 employees 15,800 companies
24 sole proprietorships 13.8 joint stock
companies a positive growth trend for companies
managed by women

• Agro-food industry (food and beverages)

11,480 employees (industry and small scale
production) 9,350 active companies with a
positive performance in milk and dairy
production, meat, pasta and beverages sectors
Not only do we have small companies operating in
the region, but we also have the sizeable
presence of medium and large sized businesses in
the territory
Source Register of companies Chamber of
Commerce
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The Agro-food in Emilia-Romagnarecent import
export performance
2007
Import

• Emilia-Romagna is the importer of 14 of total
  Italian imports of agro-food production

Export

• Emilia-Romagna is the exporter of 15 of Italian
  export of agro-food production
• Regional agro-food growth in import of 9.7, that
  is 4,370 million, and represents 15 of total
  regional imports
• Regional agro-food growth in export 5.2, that is
  3,660 million and represents 8 of total
  regional exports.

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The Agro-food in Emilia-RomagnaImport and
Export (1)
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Import and export agriculture and food-industry
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Export of agro-food industrial districts 2007
trends

• ID of fruit-juice and jam (Lugo-Ravenna) positi
  ve
• IDof milk, dairy production and ice cream (Reggio
  Emilia) good
• Industrial (and traditional made) District of ham
  
• (Langhirano-Parma) positive
• Industrial (and traditional made) District of
  parmigiano cheese
• (Parma) positive
• ID Tomato production (Parma) positive
• Industrial (and traditionally farmed) District of
  poultry (Romagna) positive
• ID of animal feed, meat, and derivatives
  (Reggio-Emilia) less positive
• ID of Food Machinery (Parma) gets better
• ID of Automated machinery (Piacenza) gets
  better
• ID of agricultural machinery (Modena and
  ReggioEmilia) less positive
• ID of packaging (Bologna) less positive

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Conclusion

• Industrial Districts, clusters and supply value
  chains, have a common base the concept of
  aggregation among companies, which are
  independent and interconnected, and specialized
  in the different phases of the productive
  process.
• The development of Ids or clusters has to be
  based on the local resources and specializations
  and to the local context. The diversification of
  interconnected clusters can be a key issues.
• The factors that appear central to the successful
  development of this type of industrial
  cooperation are the networks and partnerships,
  the strong base of skills, the innovation and the
  capacity for RD.
• The networks and the partnerships (public and
  private) generate formal and informal flows of
  knowledge and information exchange through
  interconnected companies
• Other relevant factors are the external
  environment favorable to businesses and the
  public policies supporting the development of the
  different forms and levels of aggregation among
  companies
• The industrial policies (financial and advanced
  services) have a relevant role in planning the
  development and in pushing company aggregations
  towards a higher quality of production and to a
  better link with market demand

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Some suggestions for the African countries

• Governments role in planning local and
  sustainable development for a territory
  (Public-Private-Partnerships)
• An integrated approach, operating at different
  levels
• Agriculture specialization, art craft traditions,
  local demand of food, typical products
• business, regional/local players, regional/local
  institutions
• existing and new companies well linked to the
  different level of market demand (local,
  national, international)
• local clusters and policies diversification,
  promotion of excellences and support to the
  weaker companies and aggregations
• innovation of local resources and
  specializations, following a general value chain
  approach (production, transformation, trade,
  interlinked industry and services, etc.)
• creation of business advisory service operating
  as local player for innovation
• An integrated and international partnership
  between territories or clusters can be a key
  factor for the development (companies, business
  support centres, players for innovation, public
  institutions, etc)

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Thank you for your attention!
Claudia Degli Esposti Head of territorial
marketing unit 39 051 6460 411 39 338 2731632
cdegliesposti_at_ervet.it www.investinemiliaromagna.
it