4
Figure 1.1: Timisoara in Europe
Therefore the industrial districts in Romania are faced with many of the same challenges
as the Italian ones – also if on a different scale.
The competitive advantage of industrial district lies to a great extends in the ability to
innovate. The industrial districts are often process innovators and through the working
process innovate production process, machines and products are constantly objects to
changes and improvements
4
.
On the other hand, the industrial districts lack more organised research resources and co-
operation with universities and other research institutions
5
. The latter is from
governments, institutions and universities claimed to be a fundamental problem for the
future competitiveness of the industrial districts
6
. The companies are used to “learning by
doing
7
” and the innovations are often incremental
8
. The focus on radical innovations, or
the use of information technology often seems superfluous and is not a part of the
organisational way of “thinking”. Many of the industrial districts are based on
4
Bellusi e Gottardi, 2000, p.22
5
Bellusi e Gottardi, 2000, p.22
6
Report by Confindustria on development and innovation, 2002
7
Learning by doing describes the incorporation of knowledge and information through practical experiences, typically through work
situations. The concept is among others used by Arrows and Von Hippel, 1988
8
Incremental innovations mean the gradual changes of a technology or a product, which results in an innovation. It stands in
opposition to radical innovations which are the introduction of a completely new technology etc.
5
manufacture production and have therefore never felt a strong need for in-house R&D, as
districts based on high technology would be
9
.
1.2 Problem definition
In this project I will therefore discuss the significance of science and technology in the
Romanian industrial district of Timisoara by asking;
“How does the firms in the industrial district in Timisoara incorporate science and
technology in the production and the products?”
By research and science I will refer to transfer of knowledge and technology in all areas
of the company activities. The content can vary much depending on its tacitness,
complexity or radically. My concept of technology will also be wide and include both
production technology and information technology. The actors in these processes also
varies and can be actors internal in the districts like institution, R&D department in
companies, large “leader” companies etc. Actors can also be external like universities,
private or public research institutions, science parks etc.
Off course it will not be possible to discuss this wide topic completely and therefore this
project will take form of an introducing discussion. The limits of the essay does not allow
me to show the variety within this broad phenomenon and my presentation will maybe
seem to generalising, but the importance in this project will be on the interaction between
technology, science
10
and society
11
9
OECD, 1992, p.105
10
Science will here be represented more by the role of research for the industry than merely basic science. But the role of how the
state as well as industry regards science is not less important in how it is applied in the production and in society in general.
11
Hereby represented by a specific production model, which is highly determined by historical and cultural factors. Eg. Brusco,
Beccatini
6
1.3 Methodology:
1.3.1 Romania as a case
I have been studying industrial districts as a part of my education and I was very
interested in seeing how industrial districts are changing in Romania. In particular seen in
the light of the many Italian companies which choose to outsource parts of the production
to Romania and other Eastern European countries. I have chosen Timisoara because of
the big concentration of Italian firms in the area. In Timisoara there are 5323
international firms and 1638 firms are owned by Italian entrepreneurs
12
.Another reason
for choosing Romania is that there has not been made much research compared to many
other Eastern European countries. And it was therefore interesting as well as a challenge
to write about the field. Romania was chosen a single area since it was too difficult to
embrace both different sources of data and case.
Another interesting factor is that in the end of the 80’, the Central-Eastern European
countries had suffered great social, economical and political changes after the collapse of
the Soviet Union. The socialist model, by which these countries have been functioning
for decades, suddenly crashed and they had to move on looking for a new path.
Therefore, they have been called countries with Transition Economies. Globalisation and
European Union enlargement is playing an important role in this restructuring process.
This new scenario has had direct impacts on the technology and on the social conditions
of the particular locality was the foreign firms are taken place.
12
Mihaela Boran Director Timis Prefecture (Prefectura Judetului Timis)
7
1.3.2 Timisoara
Timisoara has 300,000 inhabitants. There are good transport connections with the rest of
the country (e.g. airport, railway, and streets). The town is full of Italian restaurants,
Italian entrepreneurs and Italian banks like Banca Popolare di Vicenza, Banca di Roma,
Banca Italo-Romena, Monte dei Paschi di Siena, San Paolo IMI, Banca Intesa.
The Timisoara district is one of the best known in Romania because there was an
invasion of the Timisoara region by firms from the Italian Region Veneto almost 10 years
ago. It is the reason why the Romanian region is at the present called “the eighth Veneto
province”, Italy is the largest investor and has the largest number of enterprises in the
region.
13
.
“Monkey see, monkey do” is usually the behaviour of the firms in the industrial district.
When one district firm moves abroad and gets good results, other firms in the district
follow him. This process to aid businesses wishing to follow others that have move their
production processes to Timisoara.
14
The sme’s who relocate in Romania are driven by
incentives as the availability of labour force and the lower work costs, less restrictive
legislation and custom controls, the presence of know how. Italian firms often move to
Timisoara for outsourcing rather than to find a potential market. This relocation is
sometimes not functional to the search of new access to market in East Europe.
Why does the Italian firms move?
The Timisoara industrial district is specialised in the textile and leather goods sectors.
When companies move to Romania, they get some economical advantages from the
Romanian government - usually they don’t need to pay tax the first three years. This is a
part of the Romanian strategy to attract foreign direct investments. But in the case of
Timisoara, it is important to focus on the environment. The role of cultural affinity is
very important. Italian businessmen can come to Timisoara because Timisoara is near to
the Veneto region, the language and culture is similar and most of the people in
13
Mihaela Boran director Timis Prefecture (Prefectura Judetului Timis)
14
Berger and Locke, p. 96
8
Timisoara can speak Italian. According to the type of economical development for Italian
firms, Timisoara's land market has industrial land and residential land available. Many
developments were made in co-operation with the City Hall, so most of the land was gave
by the municipality, and the industrial parks created by the municipality have not entered
into the local real estate trade market.
1.3.3 Field work
I decided to go to Romania for several reasons. Firstly because I did not find so much
literature about this topic, so it was necessary to visit this area personally to apply the
designed methodology. The second reason was that I wanted to speak with the persons
face to face, see how the production was performed and how it differed from the
production in the Italian industrial districts.
I went two weeks to Romania from august 18th to august 29th. I tried to make a wide
range of interviews to get a better understanding of the industrial district of Timisoara
and the key actors. I interviewed Italian and Romanian entrepreneurs and I had some
interviews with institutions and with some professors’ from University of Timisoara. I
also met some teachers and students from the Technical Commercial Institute located in
Timisoara. Unfortunately it was not possible to meet more Italian entrepreneurs because
the period did not permit more. Since august is a summer holiday in Italy and therefore
also for the Italian businessmen in Romania. All interviews in this area were in Italian
because it is the second language of many of the people in Timisoara.
During my visit in Timisoara I had the opportunity to get a lot of information which
would be not possible to find in articles and books. The results are interesting and
justified the assumption of my work, which were formulated in the beginning. It was
good that in general there were not any linguistic gap between people and me in
Timisoara, so I was able to ask general questions regarding my topic. I also went around
for the industrial area and it was good to observe the big presence of foreign firms and
how they are correlated with environment. In general I found that many of the people I
interviewed focused at the some problems. They underlined the lack of Romanian
managers, and the need for Western technology and how cheap price of the labor force
9
permit to have this kind of firms in Timisoara. All people were happy of the presence of
international firms. This part has not a spectacular result, but I think that it was crucial for
the success of my work.
The trip to the districts also changed a lot of my preceding views from books and articles
concerning this subject. For example in many articles and books that I have read many
authors said that foreign firms have bad influence in the developing countries. Instead
during my interviews, I saw many of the positive aspects of the globalisation process.
This is curious because in the Western countries is often the opposite view.
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