The impacts of Foreign Direct Investment on the working force of the Romanian industry, the case of Timisoara distric

3 1. Foreword 1.1 Introduction: The industrial districts are today faced with new challenges. The industrial districts, which by authors like Brusco, Piore & Sabel 1 where seen as interesting alternatives to the existing ideas of competitive advantage as synonymous with large scale and mass production, are today faced with increasing international competition on labour costs, production prices and technology and knowledge content 2 . The strength of the production model has been a big concentration of small and medium sized enterprises (sme’s), which have shown to be extremely flexible, the production in networks and the ability constantly to innovate production and production processes. Many of the industrial districts especially in Italy have moved to East Europe therefore shown a remarkable ability to keep on being competitive due to many periods of rationalisation and restructuring 3 . The decision to move the production processes to Romania is not only due to advantages like low cost and the increase in the production quality in the Eastern European countries. But also the increasing problems for the Italian industrial districts like lack of manpower, saturation of building construction areas has caused the outsourcing of the production. It is interesting how these companies have moved unplanned in groups without explicit co-ordination, partly recreating the conditions that characterise the development of the Italian districts. In Timisoara it’s possible to see the creation of auxiliary services (mechanical, transport, banks, association of categories), for local markets of unfinished goods, for mobilised by traditional experience of local human resources. Although the decision to dislocate remain a strategy secret jealously kept within each single enterprise, in a short time production operations have been moving and also some parts of the districts with all related characteristics. 1 Sebastiano Brusco wrote many articles and books about the industrial districts and especially the regional structures in Emilia Romagna. “The second industrial divide” by Piore and Sabel, 1996 was an important contribution to the discussion about flexible specialization vs. fordism. 2 Bellusi e Gottardi, 2000, p.136 3 Sengenberger & Psyke In Psyke & Segenberger, 1992, p.7