New institutional dynamics for the creation of a favorable environment for competitiveness: hope or reality?

SUMMARY

The purpose of this study has been to identify institutional factors that have a bearing on the transformation of two Mexican regions, Jalisco and Chihuahua, closely related to the electronics and export sectors. The new trends in the economy of these regions formerly associated with traditional economic sectors, involved new challenges, especially, the implementation of a new institutional and consensus scheme to support incoming changes.

KEY WORDS innovation; economic development; institutions; networks; connections; disconnections; actors; consensus; new technologies

1. INTRODUCTION

The aim of this present study is to examine the way in which inter-institutional networks are being implemented in two regions of Mexico, Jalisco and Chihuahua, regions revealing similar as well as dissimilar characteristics in their efforts to decentralize and set up development strategies based on actions agreed upon by the several social actors involved. For three decades, the presence in these regions of the electronics exporting sector has contributed significantly to entrepreneurial learning abilities and the sophistication of production links.

Of the various phenomena and actors responsible for this synergy, one particular factor stands out: the action of political groups which, in coordination with local enterprises, have succeeded in bringing about political projects of regional development, and in undertaking decentralized production promotion programs and mechanisms to address local demand. As a consequence, the institutional structure of the region has been gradually modified, while the role of the public sector has become increasingly more active, resulting in the restructuring of old institutions and the creation of new modernization-oriented ones. Alliances and coordinating relations with the private sector have been predilect in supporting integration with local suppliers and encouraging exchanges with academic, entrepreneurial and technological institutions, all of which have strengthen the social and economic base. These efforts have been accompanied by the new role of academic and technological training institutions which, since the 90s, have sought to reformulate their programs with a view to addressing the latest production demands of the maquila export industry.

The changes undergone by both regions have involved several players, each with varying degrees of influence and each negotiating, via the new networks, their positioning and repositioning in the local institutional structure, creating in this way a new environment and a new internal dynamic (Boisier 1999). The new internal dynamic is related to the degree of articulation existing between the organizations of regional civil society and the kind of interchanges existing between them, a reflection of conflicts or cooperation (Boisier 1999).

The purpose of this study, then, is to identify the changes promoted through government development plans in these two Mexican states (Chihuahua, Jalisco), aimed at attracting international investment and integrating it into the regional economy. The counterpart of such efforts may be found in the new support from the private sector, especially in new private-private and public-private agreements established by bridge institutions and national and regional enterprise associations, which foster a thriving service market (Casalet 2000), multiply enterprise networks, and establish quality programs for suppliers.

The repercussions of modernization processes have been significant in that they changed operational market procedures, creating more open markets and greater competition, as well as introducing relevant changes in production and the enterprise infrastructure itself. However, the contribution of such changes to the consolidation of civil society is rather superficial, since the imprints of old practices cannot be removed through institutional actions, nor can they be overcome by adhering to free trade agreements. The after-effects of a deeply-rooted mistrust of anything public may be detected in the general outlook on the public sphere and the civil society, and such mistrust cannot be wiped out by merely implementing development programs.

2. RELEVANCE OF THE TERRITORIAL DIMENSION

Since the 1980's, the relevance of the external environment has been explored widely in economic and sociological literature, and further examined in studies about successful international experiences (Salais and Stoper 1993; Becattini and Rullani 1996; Scott 1998/1999, among others). These works indicate a marked trend favoring approaches that are not based so much on static advantages, but rather on a dynamic organization along path-dependent stabilized patterns (Becattini and Rullani 1996; Krugman 1995). Thus, present structures may be explained in evolutionary terms, not so much as a result of rational choices and effectiveness bur rather as more or less causal mutations which have been selected over time, and further amplified by the accumulation mechanisms characteristic of any system.

The territory itself is a geographical area where some actors make decisions about investments and the localization of productive activities. It is, somehow, an organization in which actors interact and exchange goods, services, and knowledge according to specific rules (Casalet 2000; Vazquez 1998; Poma 2000; Yoguel 2000).

Among these actors playing a significant role, the following may be mentioned: government agencies, universities, agencies devoted to establishing quality standards, think-tanks currently centered around national and international consultants, institutions dedicated to technical training delivering specialized training courses and education, which carry out research and offer technical support.

In his analysis of the Silicon Valley, Saxenian (Saxenian 2000) emphasizes the existence of an enterprise system closely related to both the external nexus and local institutions. The geographical localization operates as a socio-productive infrastructure where communication exchanges among economic agents are effectively and flexibly carried out. Collective learning processes, opportunities for mutual affluence, the opening-up of the labor market, the strengthening of cooperative processes, as well as a highly competitive dynamic, are all stimulated by the networks that make up the industrial system. (Casalet 2000).

Despite path diversity, local development efforts in advanced countries (Alburquerque 2002; Maillat 1995; Scott 1999; Poma 2000; Casalet 2000, 2001) share some common traits, which may be used in the analysis of these Mexican regions. Among them, the following may be identified:

1. A reference geographic localization with some homogeneity, where actor networks show identifiable behaviors and independence of decision. Behaviors may be modified through dynamic learning in accordance with changes in the environment, on order to find proper solutions for new conditions.

2. The presence of more or less formalized institutional coordination styles, as well as particular cooperation and exchange patterns between local firms, which include associationism and market relationships.

3. A social outlook prone to technological innovation, and the abilities needed to develop a local culture apt to produce local synergies and to take advantage of favorable external driving forces.

4. Intangible production factor endowment, such as know-how, research and development centers near the cores, and a technical culture that is the foundation for dynamic competitive advantages and the launching pad for positive externalities and closeness effects favorable to innovation.

5. Local development agencies resulting from agreements between public and private actors in the geographical area involved, which elaborate agreements on development and employment for the region relying on the support of dynamic local authorities fully aware of their catalyzing role.

3. SOME PERTINENT QUESTIONS

The previous points raise several questions about how this geographical dynamic works in Jalisco and Chihuahua. Deprived as they were of a long tradition of productive settlement and inter-institutional relations, how have these regions managed to create a structure favoring the exchange of knowledge and creativity? To what extent have changing public policies succeeded in generating a positive local environment and multiplying the levels of social tissue? Which were the options for constructing formal and informal interaction networks and creating public/private coordination spaces between the various actors involved? With regard to Chihuahua, and especially Ciudad Juarez, the following questions arise: what are the particular mechanisms and instances that have provided the means and opportunities to generate local social infrastructure in a region with no production history, affected moreover by significant migratory movements?