Abstract
In the previous chapters we have seen how the concepts of competitiveness and development depend not only on internal company organisation, but can also refer to places and territories. In this way, it is possible to talk of:
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local competitiveness, in the sense that the competitiveness of companies depends increasingly on relational factors (trust, reciprocal understanding, skills, etc.) to which companies can gain access only by concentrating in particular areas;
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local development, in the sense that the process of development of a place does not depend on its ability to adapt itself to a single development path, but is linked to the capacity of the local communities to create and co-ordinate these particular relational factors.
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Notes
Identity as conceived in this way draws considerably on the concept of milieu (Maillat, Crevoisier and Lecoq, 1991) and of industrial atmosphere (Becattini, 1998), concepts familiar to local development scholars.
The failure of investments in the electronics sector in Scotland to create autonomous entrepreneurship and development is eloquent on this (Turok, 1993 and 1997; McCann, 1997).
The term “dialogue” is preferred here to “dialectic”. The latter carries a clear meaning of “opposition” between the dialectical terms that, traditionally, follow each other. In the perspective adopted, in contrast, local and global are not seen as opposing or alternatives, but as two dimensions of the same phenomenon.
It should be noted that the traditional conclusions of the product life cycle cannot be applied to networks of companies. Within the production organisation of the network, there is no clear and mechanical succession of phases (each of which corresponds to a territorial production structure and a specific location) as envisaged by the life cycle theory. This characteristic has strong implications for activities conducted through the network: shifting activities and resources outside the network always has powerful consequences on the structure of the network and even on its existence. Thus, where the maintenance of the network is considered indispensable by the actors that participate in it, we could fmd behaviour that openly contradicts the predictions of the life cycle model. This is the case of an industrial district where production phases are kept inside the local system even if decentralisation to emerging countries would be more efficient economically.
Numerous models of contemporary economic geography use these two dimensions to define a general framework of interpretation of the relations between territory and company organisation. For more in-depth studies, see Conti, 1997; Julien 1995.
It has traditionally been said that when a company needs a machine tool or equipment it can choose to “make” it internally or “buy” it externally. This distinction is replaced by hierarchy and network. Obviously, the “make” option in our terms is the equivalent of the prevalence of the hierarchy, in that production occurs inside the company, under its full control. The “buy” option is instead much more ambiguous: on the one hand, production can be delegated to companies that, although formally autonomous, can be highly dependent on the main company; on the other hand, the supply relation increasingly involves not purely mercantile aspects, so it is preferable to talk of network relations rather than market relations.
Monopsony is the situation in which a number of potential sellers fmd a single buyer.
Not as legal entities, as companies are not linked to each other through shareholdings.
One example is the growth in production of packaging machines in Bologna, where there has always been specific domestic demand from the local food processing industry (Capecchi, 1997).
An example here is the situation in which local practice and tradition help companies to modify and adapt the technology contained in their industrial goods. Once again, this relation between tacit and codified knowledge plays an important role in the transfer of appropriate technology to developing countries (Ramanathan, 1994 ).
It is clearly necessary to take into consideration the attempts to appropriate local tacit knowledge by external actors. The process of ubiquitousness increasingly involves tacit knowledge. This can happen, for example, in the transfer of local skills through formal contracts (Arora, 1996), or the development of expert systems, which can sometimes replace human knowledge and experience (Hatchuel and Weil, 1995 ).
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© 2001 Springer Science+Business Media Dordrecht
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Conti, S., Giaccaria, P. (2001). The relational economy: networks, space and knowledge. In: Local Development and Competitiveness. The GeoJournal Library, vol 59. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-2101-1_8
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DOI: https://doi.org/10.1007/978-94-017-2101-1_8
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