Working Paper

Responding to Global Competitive Pressure: Local Co-operation and Upgrading in the Sinos Valley, Brazil

Published on 1 January 1999

This paper investigates whether enterprises in the export-oriented Sinos Valley (South of Brazil) have stepped up co-operation in response to intensified global competition in leather footwear.

Recent cluster literature suggests that joint action is essential for responding successfully to major challenges. Using a combination of quantitative and qualitative methods, the paper shows a substantial increase in bilateral vertical co-operation, contributing to a major advance in raising product quality, speed of response and flexibility. In spite of these advances, the cluster has not been able to raise exports and profits have fallen. This seems related to the fact that upgrading was largely limited to the sphere of production. Upgrading in other areas such as marketing, design and image was attempted in an ambitious program of multilateral co-operation. The program failed for two reasons: some leading enterprises put their alliance with a major global buyer above co-operation with local manufacturers; and the state failed to mediate at critical moments between conflicting business associations and entrepreneurial alliances. The paper shows that the centrifugal forces of globalisation make local co-operation increasingly difficult and concludes with suggestions for future research on global competition and local upgrading.

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Schmitz, H. (1998) Responding to Global Competitive Pressure: Local Co-Operation and Upgrading in the Sinos Valley, Brazil, IDS Working Paper 82, Brighton: IDS.

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Hubert Schmitz

Emeritus Fellow

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IDS Working Paper, issue 82
1 85864 252 3


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