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Growing business culture and parks

Businesses grow if they find “fertile ground” to grow in. And more often than not, development is more likely when businesses pool together.   A lot also depends on the prevailing business culture, which is growing more complex, more uncertain, and able to adapt. Very often, the right physical foundations have to be laid for enterprises to take root and grow. Technology parks are responsible for a large part of recent industrial history, in Italy too. But often they are not enough.

One of the latest Occasional Papers published by the Bank of Italy reveals the complex combination of factors necessary for business development. Aside from technology parks, that is.  “Local policies for innovation: the case of technology districts in Italy”, by Federica Bertamino, Raffaello Bronzini, Marco De Maggio and Davide Revelli, takes an in-depth look at the effect of the regional policy introducing technology parks, rolled out in Italy over the past decade with the aim of boosting innovation and, by extension, also business development.

The authors first looked at the features of the parks and of the businesses within them, then at how the relative organisations were performing.  The research paper begins by outlining the theoretical context then presents a detailed examination of Italy’s 29 technology parks located across 18 regions (excluding Marche and Valle d’Aosta) and hosting 2,298 businesses.

The results point to how more technology parks have been set up in southern regions as compared to other parts of the country, although they are smaller, less diverse in terms of sector representation and located further from the centres of regional power. Moreover, the authors found that, generally speaking, businesses joining a technology park tended to be bigger, more innovative and profitable than the ones belonging to the same area who didn’t join the park.

Another interesting fact emerged: “Following the creation of the park, the businesses in the park performed more or less the same as their counterparts outside the technology park”. The numbers tell a story which, translated, shows that imposing conditions from above is not enough to spark growth and development. On top of this it takes widespread enterprise initiative, informal business networks and manufacturing organisation skills.

The document produced by Bertamino, Bronzini, De Maggio and Revelli explains clearly how this takes place.

Local policies for innovation: the case of technology districts in Italy

Federica Bertamino, Raffaello Bronzini, Marco De Maggio, Davide Revelli

Occasional Papers Banca d’Italia, no. 313, February 2016