Territorial Competitiveness

Territorial Competitiveness: an alternative approach in Sustainable Territorial Competitiveness, or “Sus-Competitiveness”

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Territorial Competitiveness: an alternative approach in Sustainable Territorial Competitiveness, or “Sus-Competitiveness” Giancarlo Canzanelli, Coordinador ILSLEDA, 27 Februay 2009 The classical approach to the concept of competitiveness points out the competition (between systems or companies) to ensure external resources (technical, economic, financial, technological, human, etc.), to the detriment of others. This case recalls the principle of Machiavelli, according to which all the ways to ensure these resources can be justified and side effects (in terms of environmental and social impacts) do not have primary importance or they have to be treated outside the economic actors responsibility. The discussion on the current international economic social and financial crisis has much to do with these effects and human development can provide important conceptual and practical inputs. The human development approach, in fact, includes two variables strongly mark strategies and behaves: a) the inherent compatibility between economic, environmental, and social objectives b) the differentiation and specialization of territories, as alternative to their brutal competition Sus-Competitiveness The point is not to overcome the market as a exchange place and price formation (the subjects of the market individuals or organizations purchase goods and services on the base of price, quality, and response to their needs. Rather the problem is finding a "competition" in the market to avoid a “break” with other systems that are interdependent with the "strictly" economic one: the social system, the educational system and environmental system. Why is it important to avoid this break? The discriminating factor in the approach to competitiveness is the possibility (and ability) to maintain competitiveness at the same time now and in the medium-long term. An example is the case for the use of precious wood (then very competitive) that maybe provides a lot of jobs to the community (then of great social utility), but it destabilises the environment and it is of relevant risks in the medium and long term in producing disasters that eliminate the gains made earlier. On the other hand a clean production (such as a biological fruit value chain, not harming the environment) could be performed through a single or few companies, which employ some people, but maintain a position of oligopoly and it does not allow the inclusion in the economic circuit of the majority of the poor population. This has the great risk of social conflicts, which can easily reduce competition (for the image of the territory, strikes, difficulties in production and marketing, and production transfer to other territories). Finally, it is difficult to maintain productivity and improve knowledge and competitiveness if the territory does not have good health and education systems. In other words, it is difficult to maintain competitiveness without considering the conditions for its sustainability: social and environmental, educational and for health maintenance. It is worth, then, to modify the classical concept of sustainable competitiveness and think in terms of sustainable competitiveness or sus-competitiveness.

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Territorial difference and market: the co-opetion There are two factors for products and services being more attractive than others for the market: 1) the factors of proximity to certain types of goods: agriculture production, some services to the population, typical production, etc. 2) the factors of differentiation for products and services difficult to imitate, for which the sale depends on the unique attractiveness, the payment capacity of users and the habits and philosophy in consumption (for example, with the same capacity of purchase, to consume more in publications or food, than in jewellery or cars, or more in wine or chocolate products than in super-alcoholic or cigarettes). In these cases the concept of cooperation is added the concept of competition at different levels: from a few decades the neologism co-opetion has been created. To Co-opete at the territorial level is important for several reasons: a) because it is necessary to prioritize the valorization of those resources that can better achieve sustainable competitiveness, and this prioritization has to rely on collective responsibility, shared among all local actors, through cooperation, in order to be effective b) within the various prioritized sectors or value chains it is indispensable the cooperation between the actors directly involved in the realization of the product (eg in the production of dairy: farmers, milk and milk-derived producers, but also veterinarians, controllers of the quality, transporters, etc..), and between the actors that allow some important "environmental" conditions: strategic services, innovation, credit, technical assistance, marketing, and even government administrations (local and national) for regulatory framework, incentives, infrastructure, etc.. This co-opetition allows to achieve more efficiency in production, thanks to aggregation economies (lower transaction costs) and improved quality control, in addition to the control of the sustainability above mentioned conditions. To c-opete at international level is also important because of other reasons: a) to change habits in consumption: for example by facilitating cooperation between areas producing goods that are biological or with social or environmental responsibility, in alternative to other types of products that do not have these features. b) to enhance the attractiveness of typical and genuine products compared to products of mass production c) to strengthen partnerships between areas with the same economic approach, or social and cultural processes of co-development It is not, again, to eliminate or decrease the value of the market as allocating resources, but to accompany market exchanges with and increased "human" responsibility of consumers and government’s, sensitised about the effects ( economic, social and environmental) of the purchases and offering goods and services that outline and reflect the differences (competitive advantages) rather than factors of comparative advantage. There are already practices in this direction, such as fair trade, slow food, ethic banks, local economic development agencies of the United Nations, various experiences of social economy and solidarity economy. They show alternative ways to the free market are possible with the introduction of variables that transform the classical paradigm of economic competitiveness.

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Factors for achieving sustainable competitiveness: the territorial capacity to be sus-competitive The question now is: what are the conditions for a territory being sus-competitive? Summarizing the characteristics of sustainable competitiveness, they are: • the inherent compatibility between economic, environmental, and social objectives, involving the concept of time in defining the territorial range of the supplied goods and services (durability of competitiveness) • provision of consumer goods and services with -added human value • differentiation and specialization of the territories (competitive advantage) • proximity between the production, markets, and re-production factors • territorial cooperation and intra-territorial co-opetition The territory must have specific skills in order to achieve sustainable competitiveness, "remain visible in the global context, reacting to the frequent mutations without renouncing its specificities, unlike considered as a point of strength." 1 This presupposes: 1. a comprehensive vision of the territory, not fragmenting economic growth, social harmony and equity, the accumulated historical and cultural values of the people, the evolution of life style, the environmental equilibrium , the health of the population and of the consumers of the offered goods and services, the infrastructure policy; 2. the development process governance capacity in order to identify sustainable human development strategies, based on the definition of shared priorities and the formation of a territorial and relational capital, which is the only form capable of supporting it; 3. the ability to exploit local resources, through the cooperation of economic, social, administrative, and cultural actors around territorial value chains; 4. the ability to sustain and promote innovation, in order to face the needs on changes and productivity, and through the appropriate use of domestic resources and international relations. 5. the ability to focus all the education and cultural system towards values of solidarity, ethics and human development, whether in production or re-production of goods and services or consumption. Conclusions: a change in the paradigm and a definition The focus on human development involves a paradigm shift in the concept of competitiveness, which is not a new qualification (sustainable) of the classical concept, as it is based on a entirely different system of values from those traditionally related to the economic competitiveness. In conclusion we could define sustainable territorial competitiveness “sus-competitiveness” as the ability of a territory to offer own resources that: 1) are attractive to the consumer market, and 2) maintain the territorial harmony, from a standpoint of -present and future- social, cultural, environmental, and human equilibrium.

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Gabriele Di Stefano (ILSLEDA Tool Kit: “Valorization of endogeous potential”, next edition

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