Reggio Emilia, components up front

The ability to rethink the world as increasingly globalized has enabled the industries in the Reggio Emilia district to remain competitive in Italy and on international markets. The weight of suppliers and subsuppliers has grown thanks to designing hi-tech systems and devices

GPS technologies for crop protection, brush cutter heads, fiberglass tanks for spraying machinery and more, hydraulic valves, gearboxes, bearings, video terminals and sensors all manufactured today are the core business of manufacturers in the Reggio Emilia industrial district whereas mechanical engineering, and more precisely, the components sector, is the backbone. Moreover, years of crisis sweeping through the district’s industrial system have show that these manufacturers are not only capable of responding to problems but have been able to reconsider and take on the challenges raised by an increasingly globalized world. In summary, conditions elsewhere in the country have led to the the erosion of the industrial sector by an expanding tertiary sector whereas this trend had been much weaker in this industrial district. Unioncamere data on 2013, not a good year for Italian industry, indicate that manufacturing industries accounted for 14.6% of all concerns at work in the province, well above the regional average of 11.3% and the national average of 9.8%. Another significant factor highlighted by Unioncamere statistics was that Reggiano industries in the sector were able to report value added at 32.2% for 2012, much higher than the 24.5% for manufacturers around the Emilia Romagna Region and 18.4% throughout the nation. The vitality of the Reggiano industrial sector, and especially of the mechanical engineering manufacturers, was also evident in the trend of exports which rose from the threshold of € 5.2 billion in 2012 to € 8.6 billion. This figure boosted the Reggio Emilia Province to sixth place in Italy for value of machinery and equipment exported. 

 

From the countryside to cutting-edge electronics, the key to success

The mechanical engineering vocation of the district goes far back with roots planted in the well consolidated farming tradition in these lands as well as the rise of numerous producers of technologies for the primary sector and the strongly positive formation of the old Officine Meccaniche Reggiane, Reggiano Mechanics Shops, dating back to the beginning of the twentieth century. The legacy of these experiences as regards qualifications, professionalism and an entrepreneurial spirit still characterize the economic life of the province. Unindustria Reggio Emilia President Mauro Severi commented, “Many workers themselves, with the closing of the factories, founded activities still in operation which have become the excellence in mechanical engineering in our own house.” He went on to say there is another factor behind the “Reggiano model” and referred to the growth of specialization in the sector of suppliers and subsuppliers and especially in components developed in such traditional sectors as automotive supplies.

Aimone Storchi, the president of Reggio Emilia Innovazione, referred to “efficient and quality farming” and affirmed, “The success of enterprises in the district is based on the competitive plus of human competence, technologies and engineering, a sophistic organization of the supply chain which are factors difficult to replicate elsewhere.” In other words, a complicated setting in which about 80 companies which design and produce components have achieve considerable importance numerically, especially in relation to some 180 agri-mechanical enterprises. Also involved are institutions in that the Reggiano district is one of the most strongly represented in Comacomp, the association of components manufacturers in FederUnacoma, the Italian Agricultural Machinery Manufacturers Federation.

 

The engine driving Reggiano innovations: the Tecnopole

On the issue of technological innovations, it must be noted that Reggiano manufacturers are among the leading advocates for changing the paradigm which has led many industries to equip their basic mechanical components with electronic and IT content. These advanced technological solutions have made it possible to fine tune artificial intelligence devices able to interact with the environment and automatically adapt to sudden and unexpected changes in the agricultural sector. These applications, with high value added, have allowed Reggiano companies to make a difference in global markets, especially as compared to enterprises poor in innovations but highly competitive as regards pricing. Though this process is not a prerogative of the Reggio Emilia district, the high concentration of hi-tech components manufacturers shows that they have found fertile terrain here and, thanks to their entrepreneurial philosophy looking to the future without loosing contact with their roots and to their driving role it the Tecnopole. There was no coincidence involved in building this center of technological excellence in the district in which the  Officine Meccaniche Reggiane factor was established early in the twentieth century to develop the industrial fabric of the area. The Tecnopole is structured as a “laboratory of knowledge”, an environment for work on the development and creation of innovations. The objectives of the pole include forming synergies among public research institutes and private and industry researchers, the transfer of know-how, sharing information. A special focus is trained on the mechanization of the primary sector with the involvement of the Intermech laboratories specializing in industrial and precision mechanics, industrial design and mecatronics; En&Tech at work on energy efficiency and renewable energy sources with a department of centers conducting applied agriculture and agri-food research such as Biogest-Siteia, an interdepartmental facility dealing with improving the value of biological and agri-food resources; Crpa Lab, an animal research center specializing in applied agri-food, environmental and energy research.  

 

Suppliers and subsuppliers, a future ripe with opportunities

Against this backdrop of research and the development of new products, the Reggiano manufacturers have managed to differentiate themselves from their competitors. Tracing the district’s climb out of the crisis stall, the Chamber of Commerce has forecast growth of 1.9% for the province in 2016 due to the innovation capabilities of these industries, compared to a national average of plus 1% and 1.2% for the region. The Unindustria president, Mauro Severi, was quoted as saying, “The Reggiano companies are to be recognized for knowing how to get out of the long years of crisis. Many of them have invented the diversification of their products, patented increasingly innovative new products able to compete on global markets.” In this connection, these component manufacturers and, more in general, those operating as suppliers and subsuppliers are playing a front-rank role and succeeding, along with small and medium enterprises, in conquering new markets. According to Aimone Storchi, the president of Reggio Emilia Innovation, “A right and proper evolution of suppliers and subsuppliers can be foreseen for taking on a more important proactive role in their supply chains. The new frontier today is in the area of innovative materials and digitization wherever this can be adopted, research on industrial and monitoring electric devices, maintenance with mechanics diagnostics, mecatronics, hydraulic mechanics and robotics.” He concluded by referring to, “the scope of new requirements raised by the market in need not only of greater performance for the product but also increased flexibility in use, eco-sustainability and a lower environmental impact.” In substance, the Reggio Emilia System with the Tecnopole and vital enterprises have all their cards in order to become the manufacturing benchmark on markets around the world, including those distanced from the traditional trade routes.