Policies for Industrial Districts Location in Italy and Israel: a Comparative Perspective

Recent global trends have affected significantly territorial and economic policies, especially in advanced-economy democracies, weakening frequently their national sovereignty. This paper, through published data, documentary sources, and interviews, offers a comparative perspective of industrial localisation's policies in Israel and Italy, focusing on the dualism national decision-making/local practice. Although they have two different political structures, both countries have shifted to greater decentralisation, increased deregulation, and more privatisation. Since the beginning of the State, Israel industrial localisation policy used tools as national and regional planning and fiscal incentives, with the objective of the industrial dispersal. But last years' profound economic, political, and social changes have led to a transformation of Israeli industrial geography, shifting changes in the government policies, and reinforcing the local-government assertiveness. Developing industrial parks has become a top priority even for rural regional council, with the risk of over-investment in too many industrial parks of too small a size. Similarly, since post-war years Italy concentrated on regenerating the economic periphery, the southern regions, through the "Cassa per il Mezzogiorno", helping finance and developing irrigation, agriculture and industrial development in the most disadvantaged areas with a policy of investments in infrastructures and financial supports to the localisation of large firms. The change of industrial models, now based on more flexible structures, has brought, almost spontaneously, the "Third Italy" phenomenon, a proliferation of 'local production systems' (LPS) where SMEs represent an high share of total employment. Based on an endogenous development model, the success of LPS is not guaranteed unless change and innovation take place among local SMEs and institutions and between the local production system and the external environment, competing areas and other spatial system. For both countries is necessary a comprehensive, strategic and flexible planning and a stable, efficient and no-bureaucratic decision-making process, at an intermediate scale between regional and local.