Global Competition and Local Cooperation: Success

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Global Competition and Local Cooperation: Success and Failure in the Sinos Valley, Brazil

HUBERT SCHMITZ *
University of Sussex, East Sussex, UK
Summary.蠷ecent cluster literature suggests that joint action is essential for respondingsuccessfully to major challenges. This article investigates whether enterprises in theexport-oriented Sinos Valley (South of Brazil) have stepped up cooperation in responseto intensi甧d global competition in leather footwear. Using a combination of quantitativeand qualitative methods, it shows a substantial increase in bilateral verticalcooperation, contributing to a major advance in raising product quality, speed ofresponse and 痚xibility. In spite of these advances, the cluster has not been able to raiseexports and pro畉s have fallen. This seems related to the fact that upgrading was largelylimited to the sphere of production. Upgrading in other areas such as marketing, designand image was attempted in an ambitious program of multilateral cooperation. Theprogram failed for two reasons: some leading enterprises put their alliance with a majorglobal buyer above cooperation with local manufacturers; and the state failed tomediate at critical moments between con痠cting business associations and entrepreneurial alliances. The paper concludes with suggestions for future research on global competition and local upgrading.