Big Idea No. 4 : Supports for Small Business

This article is part of a series that explores Five Big Ideas for economic development in the Cowichan region.

Emilia-Romagna of Northern Italy is one of the wealthiest and most advanced regions of Europe, known for its decentralized and democratic economy, high level of entrepreneurialism and world class artisan products. And it may offer lessons for the Cowichan region on how to build a stronger local economy where small and medium-sized firms play a larger role.

Emilia-Romagna’s per capita income is 25 per cent higher than the national average and its unemployment rate has historically been one of Europe’s lowest.

With 4.3 million inhabitants and 90,000 manufacturing firms (compared to New York’s 19.7 million people and 26,000 manufacturing firms), this region is also one of Europe’s major exporters, producing high quality and specialized goods in a wide range of sectors including metal products and ceramics, machinery and advanced mechanical engineering, electrical and electronic equipment, textiles and garments, and food and agriculture.

Ferrari, Ducati, Lamborghini, Maserati and other world-class products are all manufactured in Emilia-Romagna.

Interestingly, more than half of these manufacturing firms have fewer than 50 employees. Only a handful of businesses employ more than 500 employees, and most of these are co-operatives owned by their workers.

So what gives Emilia-Romagna its advantage? How are its small and mediumsized firms able to compete so effectively in the global market during this age of corporate globalization?

What makes this region of Italy unique is the high degree of cooperation and networking among smaller businesses and artisans.

While much of this occurs organically, the regional government plays an important role.

During the 1970s, the regional economic development agency worked in partnership with the business associations, chambers of commerce, trade unions and universities to establish a network of "real service centres."

Offering a broad range of business services, these centres target artisans and very small firms in key export sectors such as textiles, footwear, ceramics, building, and agricultural machinery.

They provide services that would typically be too costly for smaller firms to afford, such as sales and marketing expertise, research and analysis, advanced research and testing, quality certification and education programs.

"Service centres scan the globe for the most current information on markets, consumer trends, technological developments, and best practices which they then provide to their members," explains John Restakis, the former executive director of the BC Co-operative Association and an expert on the Emilia-Romagna model.

"They are driven by the needs of small firms which they serve, and are situated in the industrial districts where their membership is located. What service centres make possible, in short, is global knowledge for use in local production."

Emilia Romagna’s small and medium-sized firms are also given a competitive advantage through other shared service support mechanisms that allow them to focus on their area of specialization.

For example, the National Confederation of Artisans and Small and Medium Sized Enterprises (CNA) offers its members comprehensive business services including training, planning, counselling and marketing advice, as well as "back room services" such as financial, legal, payroll, accounting, insurance.

Additionally, they provide extended social service coverage, including pensions, workplace injury coverage and maternity leave.

These shared service support mechanisms allow smaller firms to "stick to their knitting," remain small and highly specialized, and stay competitive on the global market. Could the Emilia-Romagna model of small business supports, cooperation and networking be applied to the Cowichan economy, or perhaps to Vancouver Island as a whole?

Imagine for a moment if the Cowichan Valley Regional District (CVRD) were to transform its existing economic development division into a "real service centre" offering comprehensive business services to smaller firms and artisans in key sectors such as value-added forestry, agri-food, tourism and small-scale manufacturers and artisans.

Or picture the CVRD partnering with the local business associations, chambers of commerce, and organizations such as Community Futures to develop shared service support mechanisms including "back room services" for small and medium-sized firms in the region.

There are all kinds of possibilities.

The Cowichan region already has many dynamic small and medium-sized firms and highly talented artisans.

But with the right business supports in place, we can encourage greater specialization and co-operation among our businesses while also giving them a competitive advantage on the global market. There is so much potential in the Cowichan region. Let’s not miss this opportunity.

Stay tuned for the final instalment of our series, where we will explore Big Idea No. 5: Local Ownership, and discuss the future role of the CVRD including Economic Development Cowichan and the Economic Development Commission.

Rob Douglas is a councillor for the Municipality of North Cowichan and director for the CVRD. Roger Hart is a member of the CVRD’s Economic Development and Environment Commissions. The views expressed here are their own and do not necessarily reflect those of the CVRD, its commissions or the Municipality of North Cowichan.