The incentives to decentralized industrial creativity in local Systems of small firms - article ; n°1 ; vol.59, pg 99-110

Marco Bellandi

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Revue d'économie industrielle - Année 1992 - Volume 59 - Numéro 1 - Pages 99-110
12 pages
Source : Persée ; Ministère de la jeunesse, de l’éducation nationale et de la recherche, Direction de l’enseignement supérieur, Sous-direction des bibliothèques et de la documentation.

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• Publié par: REVUE_D-ECONOMIE_INDUSTRIELLE
• Publié le: 01 janvier 1992
• Nombre de lectures: 12
• Langue: English
• Poids de l'ouvrage: 1 Mo

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Marco Bellandi
The incentives to decentralized industrial creativity in local
Systems of small firms
In: Revue d'économie industrielle. Vol. 59. 1er trimestre 1992. pp. 99-110.
Citer ce document / Cite this document :
Bellandi Marco. The incentives to decentralized industrial creativity in local Systems of small firms. In: Revue d'économie
industrielle. Vol. 59. 1er trimestre 1992. pp. 99-110.
doi : 10.3406/rei.1992.1406
http://www.persee.fr/web/revues/home/prescript/article/rei_0154-3229_1992_num_59_1_1406Marco BELLANDI
THE INCENTIVES TO DECENTRALIZED
INDUSTRIAL CREATIVITY IN LOCAL
SYSTEMS OF SMALL FIRMS <n
« No one is so wise Marshall as all (1927, the world p. 174) »,
I. — INTRODUCTION
Big Research and Development (R&D) divisions need the funding of big firms
and/or central governments. And big firms and governments proudly advertise
their commitment to R&D and the ensuing flows of innovations. But the potent
iality for innovation depends also on the mobilisation of the energies of inge
nuity and creativity of large groups of people involved in product processing and
using. Local production systems based on specialized small and medium-sized firms
are relatively strong in this respect. Their potentiality for innovation is not always
inferior to that of big firms, supposedly strong in R&D, but often weaker in regard
to what I am going to call Decentralized Industrial Creativity (DIC).
In this paper I will try to define the concept of DIC, and then I will study the
relations between DIC and an idealized form of local system of small firms, the
so-called Marshallian Industrial District (MID). In particular I will concentrate
on some seemingly important incentive problems for DIC within the MID.
II. — THE CONTEXT OF DECENTRALIZED INDUSTRIAL CREATIVITY
Nathan Rosenberg (2) defines three types of learning which may be useful for
the growth of productivity : the first one is R&D, that is the specialized arrange
ment of specific facilities and scientific skills for the production of new economic
ally useful knowledge ; the second type is learning-by-doing, that is the develop-
(1) Acknowledgements : This paper is based on a former one, whose title is "Capacita innovativa
diffusa e sistemi locali di imprese", and is published in Giacomo Becattini (ed), "ModelH locali
di sviluppo" . II Mulino, Bologna, 1989. Carlo Trigilia allowed me to use some new results of
a 1990 case study of ours (Bellandi&Trigilia, 1992). Participation in the 1991 "Workshop on Indust
rial Strategy" , organized by the Research Centre for Industrial Studies at the Birmingham Busi
ness School, helped me to focus again on the subject of the mobilisation of the energies of inge
nuity and creativity of people involved in doing.
(2) Rosenberg (1982, p. 122).
REVUE D'ÉCONOMIE INDUSTRIELLE — n° 59, 1er trimestre 1992 99 ment of knowledge or skills for a productive process as a by-product of practising
that process ; the last type is learning-by-using, that is the development of knowl
edge regarding a product (improvements, etc.) joined to the use of that product.
Learning-by-doing or learning-by-using do not necessarily have a creative
content. "learns" For to perform example a there given productive is no creativity action at with all (in a predetermined learning) when standard a worker of
accuracy and speed ; neither can be supposed when the practice of doing
or using is only one of the means by which R&D receives feed-back on the wor
king of planned processes and products. Obviously, these cases are prevalent when
the organization of work is dominated by mass-production and bureaucratic, top-
down relations (3).
In other cases, learning may have a creative content, more or less interdepen
dent with R&D : for example, when the information which workers transmit to
R&D is enriched by suggestions ; or when new ideas spring directly from product
ive practice, and their development is sustained by technical education and/or
by circulation and comparison of ideas among producers (4), with the possible
support of R&D. Then, it could be useful to identify these opportunities with a
specific expression, for which I propose Decentralized Creativity ; "decentrali
zed" being meant to denote that the sources of the new knowledge are not con
centrated in specialized divisions of isolated few scientists, but also distributed
among the crowd of producers. Here I will discuss in particular what I denote
more precisely Decentralized Industrial Creativity (DIC) ; where "Industrial" is
meant to exclude the cases of creativity associated with the activity of isolated
craftsmen without formal technical education.
The building block of DIC is practical knowledge (experience). Specialized prac
tice is the pre-requisite of practical knowledge. Practice permits a broad sensorial
contact with reality ; and the sensorial data can be registered consciously and
unconsciously by the agent in his/her routines of action and thought, which cons
titute practical knowledge. Specialization of practice allows for reiteration, which
helps the establishment of routines of action and thought (5). In comparison with
formal knowledge, practical knowledge is less systematic in method and content,
less articulated and thus more difficult to transmit in formal and general terms
(6). The other side of the coin is that formal knowledge is separated that is, "ii
is removed in both time and space from the experiences and the events it descri
bes" (7). Now, not all the relevant circumstances of production and product-using
are easily understandable by means of accepted systematic methods, nor are they
easily communicable in formal and general terms (e.g. by means of textbooks,
blueprints, written instructions, etc.). These circumstances can be economically
grasped and accumulated as practical knowledge.
(3) Piore & Sabel (1984), Kern & Schuman (1984), Best (1990).
(4) The generic term "producer" distinguishes here those in charge of the productive process or of
the use of products from the researchers employed in separate R&D divisions.
(5) See for example Nelson & Winter (1982).
(6) Thrift (1985).
(7) Thrift (1985).
100 REVUE D'ÉCONOMIE INDUSTRIELLE — n° 59, 1er trimestre 1992 That part of practical knowledge which is not encompassed by formal knowl
edge may have economic value in itself (8), and it is the specific advantage of
DIC over separate R&D (9). The producers may directly draw data from practical
knowledge and combine them with personal endowments of flair, imagination,
technical education, outer experience, etc. The combination may bring about new
viewpoints and new hints, that is new approaches to circumstances of production
and use of products.
One important constraint on the learning and creative effects of specialized prac
tice is the degree of specialization. A high degree of specialization of labour, that
is a very narrow definition of the scope of a given practice, limits the accumulat
ion of meaningful and original approaches. Furthermore, there is a correlation
between extreme specialization of labour, and Tayloristic-like organizations, in
which the incentive to responsible reactions and creative actions are far removed
from the majority of producers. Even apart from extreme specialization, the fact
that formal knowledge cannot cope adequately with all circumstances of time and
space is not enough to imply that a useful practical knowledge is built upon such
circumstances. How can such fragmented knowledge deal "with the magnitude
and complexity of modern industrial operations, and their intricate relations to dependence on one another" ? (10).
Three very important conditions sustaining the learning and creative effects of
specialized practice are the coexistence of several approaches, their mutual inte
raction, and the segmentation of the production system. First of all, "the coexis
tence of different approaches creates the condition for a number of challenges
in the formulation of any given problem" (1 1). But coexistence can be useful only
insofar as the different approaches, and the related experiences and personal
endowments, do interact. Such interaction is restricted by feasibility and incen
tive problems, whose nature and solutions I will discuss later. Finally, the se
gmentation of the production system into partially autonomous production com
ponents makes room for single acts of DIC, within single components, even when
the overall system is highly complex (12). Then those acts may extend to other
parts of the system. For example, they can generate tensions (disequilibrium effects)
for some similar or connected components ; and these focus creative ener
gies and mutual interactions towards useful generalizations and adaptations of
(8) According to Aoki (1988), the weight assigned to local information in the Japanese firm is an
important factor in the competitive strength of this form of big firm.
(9) R&D is, in itself, a separate activity, whose approach to economic events is based on formal knowl
edge. Richard Nelson (1980, p. 67) proposes that "the degree of technique codifica