Resuming the subject of generational turnover in district enterprises, which we already treated in the previous number of Economy of the Marca, we will now investigate the matter of abilities required to young entrepreneurs-to-be, concentrating on another dynamic district of the Marca, which is the district of sports footwear in Montebelluna. Data are taken from the survey by Ebav and others institutional bodies presented in March 2004 with the goal of analyzing the needs of generational turnover of the most important Veneto districts.

History and competitive situation of the Sportsystem district

The boom of the district happened between the years ‘60 and ’70: with the explosion of world market linked to skiing, local enterprises enlarged market horizons and restructured productive processes, thanks also to deep technological innovations occurred in those years.
Some enterprises went on producing ski boots, while others specialized in different kinds of footwear ( for motorcycling, trekking, soccer, cycling, skate, etc.), often rethinking their position with an innovative approach. Today the district dominates the world market of ski footwear, it is the leader in motorcycle boots, it covers a quarter of the production of in-line skates and others sections of sports footwear and sportswear.

From ’80 it has been started a process of internationalization, with the opening to foreign markets, the insertion of foreign producers on the district and the delocalization of manufactures in East Europe and Far East Asia; local producers chiefly concentrated on final stages of the “spinneret” and on valuable functions (invention, marketing, etc.). In the last period, the weight of “external network” and the scaling down of production activities boosted a strategic reorganization; the exit from the district of Benetton group is emblematic of the sector turbulence and of the difficulty in maintaining high growth rates, even though the take-over of its activities by others local producers confirms that there are also enterprises that believe in the district growth.

Roles of local enterprises are well defined: the group of leader enterprises is connected with markets and spreads innovations, middle-size enterprises develop product innovation, while small-size enterprises offer very specialized solutions or answer to bigger enterprises needs, in accordance with a district structure strongly stratified, but also competitive. The model firstly consolidated with the entry of multinationals into the district, but with the exit of Benetton and with the strong delocalization it seems to take new directions, strengthening some medium-size enterprises and complicating prospects for small-size ones.

Generational situation of district enterprises

In the first part of the table, we reported the answers of the Ebav sample of 76 district enterprises with less than 51 employees: they are small-size, but they can work with a certain autonomy (the half of them works by themselves). The average age of enterprises is not so high and the percentage of enterprises that have more than 30 years of life is very low. These data confirms that the birth of most enterprises dates back to the district boom of ‘70-’80. The average age of owners, still relatively young (47 years), suggests that they probably established their firm after a period of work under others enterprises of the sector, also because of their average educational level and their inclination to carry out operational tasks.

More than a half of owners have more than 45 years, but only the 26,3% of entrepreneurs maintains to be interested in generational turnover. Between them, the 55% seems to be willing to preserve the present situation and the 31% to close or reorganize the enterprise. Only the 9,7% intends to enlarge it and this orientation is completely different from that of the others big districts of the Marca: the Wood furniture firms ( in that case, the 36% of enterprises intended to enlarge their activity) and the Inox Valley (33%). It happens because of the strong scaling down of production activities of the Montebelluna district, which can result in two directions: a contraction of internal manufacturing or a different productive collocation of smaller enterprises, that is to say a niche specialization. Small enterprises strongly perceive the danger of the affirmation of low-cost producers (which is strengthened by the fact that big enterprises largely apply to foreign subcontract) and the limited possibility of investing in promotional activities. It is felt the necessity of cost reduction to cope with the challenge of prices and the need of qualified people and of opening new market areas.

Skills required to young entrepreneurs

Young entrepreneurs that will replace senior ones (the 100% of potential successors already works in the firm and is therefore acquiring the necessary skills for a prospective replacement) will have to master abilities concerning not so much the operational field, as the strategic profile of the firm: for example, they will have to improve the planning cooperation with customers and buyers, to forecast the demand evolution, as well as to build relationships with the most efficient distribution channels, choosing systems of selling that enhance the product.

In the organizational field, competitive necessities underlines the need of more functional service policies, with a deeper planning ability and efficient informative systems. This field includes also the ability of managing the more and more necessary specialized figures, urging them to enlarge their knowledge and to innovate their professional profile.

In the productive field, the sector is strongly pressed to introduce new technologies, which require an evaluation capability related to market, an efficient management of potentialities and the preservation of different productive positions. What is needed are not only skills in managing relations with delocalized foreign enterprises, but also an ability to exploit, within the district, productive cooperation forms that allow the protection or innovation of distinguishing qualifications.

Those indications must be primarily considered by contracting enterprises. To remain qualified suppliers for the district, these enterprises will have to safeguard specialization advantages, to improve the relation quality-price and organizational and planning answers and to develop new functions (for example, managing for the buyer relations with other suppliers) with the perspective of customer satisfaction. If they want to win the more and more well-trained foreign competition, local enterprises must direct theirs efforts not only towards costs reduction, but above all towards quality defence strategies, product personalization and upgrading of service activities.

The footwear and Sportsystem districts

Silvia Andreotti
From "L'Economia della Marca Trevigiana", April 2005