Murano Glass ClusterMICROECONOMICS OF COMPETITIVENESS

CHACON, EduardoDRAKE, EmilyMAIOR, DanielROBINSON, DianeTREMBINSKI, Kristen

MBA 2011

Under the Supervision of Professor Ingo Böbel, PhD

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 2

Italy

Total Area: 301,333 km²

Neighbors: France, Switzerland, Austria, Slovenia

Languages: Italian (primary), German, French,

Slovenian

Religion: 90% Roman Catholic

Population: 61 million

Median age: 43.5 years

Population growth rate (2011): 0.42%

Birth Rate: 9.18 births/1000 people (lowest in

Europe)

Main Exports: machinery, transport equipment,

chemicals, clothing and wine

Government: democratic republic

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 3

Veneto

Total Area: 18,399 km²

Population: 4,931,430

8th largest region in Italy (out of 20)

3rd wealthiest

One of the most developed and industrialized

Most visited: 60 million tourists/year

Most productive agricultural sector in Italy

One of Italy’s most important wine growing areas

Strong fashion industry

Independent state: Venetian Republic

One of the greatest immigrant-receiving regions in the country

454,453 foreigners (2010) – mainly Romanian & Moroccan

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 4

Italian Economy

GDP: 1.782 trillion USD (2010)

GDP per capita: $30,700 USD (2010)

Labour force: 24.97 million people

Unemployment: 8.4% (2010)

Germany; 12.9

France; 11.4

UK; 5.8

Others; 69.9

Trade: U.S & other EU countries

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 5

Venetian Economy

GDP per

capita:

€30,038

Major

contributor

to GDP of

Italy

3.5%

unemploymen

t rate (2008)

24,000

companies

(metal &

mechanics)

Agriculture

and food

industry

132,500

artisan

companies

Metalworking,

building, fashion,

glassware, artistic

ceramics

Capital Goods: hide

tanning, marble &

granite

Consumer Goods:

Clothing, footwear, eyewear

(80% of all Italian eyewear

manufacturers), furniture,

art of goldsmith

Tourism = + €10mi to

Venetian annual

income

GDP:

€121,113

million

1200

850

2007 2010

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 6

Murano Glass Cluster

Factories and family owned/operated studios

Pride in heritage >>> Rivalry

Century-old technique (lampworking)

Main purchasers

Tourists

Architects and interior designers

Museums

Restaurants

Large corporations

# OF GLASSBLOWERS

Cheap knockoffs (China)

Low-cost/good quality products

Historical focus on neighbours as

competitors

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 7

Mission

To promote Murano trademark worldwide

+50 glass producers consortium (1985)

Trademark (1994 law)

Museo Vetraio

Murano Glass art schools

Craftsmanship from generations

Short-term courses

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 8

Factor Conditions

Artisans isolated on the island

Atmosphere of high competition

Increasing innovation and creativity

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 9

DEMAND

Italian appreciation for art-glass

Independent collectors

Made in Italy

Tourism

+60% of Murano glass products

Demand Conditions

Country of origin (fashion, design)

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Historical Evolution of the Cluster

1200’s:•Trade association•Glassmakers Guild•Importation law•Murano as a

premier glassmaker

All furnaces used for glassmaking were required

to be moved from Venice to Murano:

- Risk of fire or secret protection?

15th & 16th centuries•Cristallo: process of

making clear glass

8th century:•Venice as prominent

glass-manufacturing

center 17th century•Slow decline:

competition

from England,

Bohemia and

France

18th & 19th centuries•Increasing

competition with

new techniques•Worsening political

climate•New laws: more

expensive

importation and

exportation

1854•Antonio Salviati•School for glassmakers•Archive’s exhibition

20th & 21st centuries•Great production•Worldwide recognition•The Glass Museum

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 11

Cluster (under)Performance

World renowned brand in decorative glass

Competition led to stagnation

Trade domination

Domination built only on monopoly of know-how: instability

Geographical integrity

Isolation and island size limitations

Intensive touristic activity

Tourism as a vulnerable industry

Open integration (Vitrino Artistic Murano)

No cooperation among the companies; calcified ideas

Glass school

“The only way to learn is through apprentice”

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 12

Cluster Competitiveness

Veneto: 3rd most wealthiest region in Italy (GDP €139bi)

45 recognised clusters and mega-clusters

Exports increased 150% in the last four years

Veneto Development Model

Strong social cohesion: political and economical

Incentive to wider use of communication technologies – 2000

Veneto Net Goal 2006: Net Globe and E-Cluster

Exports decreased 25% in 2009

Relocation of factories to Eastern Europe (high costs)

Small size of Venetian companies: innovation and R&D

(1) Establishment of SME’s

(2) Traditional products/methods and technology

(3) Globalization and adaptability to changing markets

MURANO GLASS CLUSTER | INTERNATIONAL UNIVERSITY OF MONACO – MBA 2011 13

Recommendations

1. Apprentice programs in the glass schools

2. Articulated aspiration to quality and rigorous marketing

3. More strict monitoring of standard and sales venues

4. Increase cooperation among companies

Q&AThank you.

CHACON, EduardoDRAKE, EmilyMAIOR, DanielROBINSON, DianeTREMBINSKI, Kristen

MBA 2011

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