Keynotes on Milan between past and future
Milan, “land in the middle” according to its etymological root, is currently the functional-economic capital of a wider macroregion, Northern Italy with its 26 million inhabitants. If it were also a political capital, as some Italian parties have dreamed in the recent past, it would lead a not too small State, at least according to European standards.
This doesn’t capture the full story of Milan, which is a functional-economic hub and transit point much more than a political player. The city was also so in the past: Milan never created its own State but rather connected its firstclass handicraft production to European circuits of commerce. Milan was a small Lordship (Signoria) and then a Duchy (Ducatus Mediolanensis) under the Visconti and Sforza families. Later, it was dominated by Spain, Austria and shortly by France under Napoleon. For half a century (1815-1859) Milan was the capital of a dependent State, the Lombardo-Veneto, as part of the Austrian Empire.
Any region, and in particular those bordering on other countries, are affected by transfrontier dynamics. Milan is located in a peculiar borderland, which includes Switzerland: Lugano and the Canton of Ticino are part of its direct influence. Again the historical heritage is important: the Canton of Ticino was part of the Duchy of Milan and the Ticino river linked Italian-speaking Switzerland, Milan and Pavia in one cultural system. Pavia University was founded in the XIV century as Alma Ticinensis Universitas (University of Ticino) holding the same level as the universities of Bologna and Paris at that time.
Today Milan is part of a wider supranational network of European economic powerhouses including Stuttgart, Lyon and Barcelona. But the interregional links are even stronger. The regions of Northern Italy are directly linked to Milan: the Ligurian ports are points of transit towards Milan send 60% of their worldwide import toward the city, Lombardy is a Milan-led platform for people and goods on the move across regions and businesses, and the logical hub that attracts and distributes resources and people involving the three airports of Malpensa, Linate and Orio al Serio, as it does the seven universities of Statale, Catholic, Bicocca, Politechnic, Bocconi, IULM and Pavia. The Milan fairs attract small and medium businesses from across Northern Italy as well as business visitors from around the world, just like the huge service centres of finance, logistics, law, consultancy, accountancy and advertising.
Milan is identified with the fashion and design industries worldwide; however its diversified economy includes much more than that: the 115 municipalities of the Milan local labour market produce a wide variety of goods and services.
If we consider Northern Italy as a global city-region (Perulli, Pichierri 2010) it would be counted up among the first places according to Scott (2001). Northern Italy is much larger than other city-regions in Europe (Catalunya is 5.5 million, whereas Bayern is 12.5 million).
Who governs the global city-region (Le Galés 2011)? In the case of Milan the recent Law on Metropolitan Cities revisited by the so called Del Rio Law (after the name of the Ministry who elaborated the text in 2013) defines a province-wide government including the municipalities of the old Milan Province. This seems to be a past vision of Milan: in the 1960’s the PIM (Intercommunal Plan of Milan) designated the very same area. But in the following 40 years very much has changed. The Milan municipality has lost population and the Milan province has only slightly increased; however, the demographic weakness of Milan is now compensated by a recent trend: the “global city-region” of Northern Italy is certainly also interesting for its global influx of immigrants (2.5 million foreign residents in 2008) forming a new (for Italy indeed) transcultural and diasporic network.
What has also changed is the economic ranking of Milan: 8th place among world global cities in terms of global connectivity as measured by multinational service businesses located in Milan, revealing an economic strength that is disproportionate to its weak capacity of metropolitan governance. In fact, Milan ranks only 38th in the Global Cities Index produced by Foreign Policy which also takes into account the political engagement of cities. The governance of Milan is based on a series of loosely coupled institutionalized experiments in the metropolitan region (well examined in Gualini 2003). On the contrary Rome is only 53rd in terms of global connectivity and 30th in the Global Cities Index, confirming itself as a political (and religious) capital devoid of a global economic role. The map based on inter-business relations also shows that Milan is more interconnected with North America and Asia than with some other European cities. The research contracts of Milan with other research and innovation centres include North America, England, Germany and France more than other Italian or Southern Europe regions.
The importance of the location of Milan can also be measured by the presence of players in networks that have been defined, alluding to Italian industrial districts, as new “hybrid collectives” (Parolin 2012). Many players are involved in the creation of new industrial objects “made in Italy” as a result of the assembly of practical knowledge and heterogeneous theories and thus contributing to the development of a new product. In the case of the furniture industry, the networks are made up of designers largely based in Milan, market analysts and other metropolitan specialists, vendors and buyers coming from all over the world, developers from research and development departments of Milanese universities as well as craftsmen and suppliers located in the Monza-Brianza province. These multi-localized, hybrid collectives are interrelated and in constant interaction with each other, thus being both local and remote (but without the former there cannot be the latter).
Milan is not only the golden location of the fashion and design industries as well as hightech research centres. Milan is also the new hub of illegal flows of capital, goods and persons coming both Southern Italy and worldwide which take part in the dark side of globalization processes: from drugs to illegal transport of people from remote regions towards central cities.
Milan is also the main hub of Italian Internet but not at a level comparable with its economic strength: it the principal influx and departure point for the main Italian Internet infrastructures but the role of the Internet economy is still limited in terms of GDP growth (Derudder 2011). Creativity and innovation are widespread in the Northern Italy macroregion: Turin plays a special role in advanced technological research, Bologna and Reggio Emilia are strong in the research and development of advanced mechanical applications, and small ICT businesses are developing in the metropolitan area of Venice, Treviso and Padua.
The creation of Milan metropolitan city in 2015 in therefore both an opportunity and a challenge given its wider socio-economic role. In fact, the level of analysis needed to fully understand the innovative socio-economic dynamics taking place in Milan is not limited to the provincial territory (now identifying the metropolitan city), it is much wider than that designated by the recent institutional reform.
Let us begin with empirical evidence. In socio-demographic terms, Milan has shrunk in the centre (municipality) where population reduced by 28% between 1971 and 2011. Population growth has taken place in the province (+4%). However Milan’s population is now older both in both the centre (+58% of inhabitants more than 65 years old) and in the province (+ 100%). People have moved towards external areas with poor welfare services, and a new welfare network at metropolitan level is now urgently needed.
The economy has gone well beyond: while the central city hosts advanced production services (finance and accountancy above all), the metropolitan city hosts a diversified quality production: manufacturing still makes up 11% of total employment and accounts for 20% of total value added. Taken together, employment in manufacturing found in Milan and Monza-Brianza reaches 20% of the total.
Milan at the city-region level leads a network including Pavia, Piacenza, Novara, Bergamo and Lugano in term of logistics, research and other strategic functions. On one hand, Milan is the site where 3.000 foreign multinationals have their
Tab. 1. Mix of advanced production services: Milan, Rome and NYLON (New York-London)
Source: P. Taylor, in P. Perulli, Nord. Una città-regione globale (il Mulino, 2012).
registered office. On the other hand, the 4.000 medium-size businesses (we exclude those controlled by large Italian or foreign companies) mostly located in Northern Italy develop supply chains, managerial teams and advanced production services which have Milan as their centre. Under globalization, enterprises’ competitive chances are dependent upon their ability to connect to global cognitive circuits of the economy, which find in Milan the interfaces between local and global environments.
Public utilities, banks, fairs and other economic infrastructures have their centre in Milan. The governance centres of credit systems, following a process of aggregation, have largely moved towards Milan. The fair industry, existing in a very competitive realm, finds in Milan Fair its leading site even while other fairs in Bologna, Rimini, Verona, Vicenza and Padua have grown. Restructuring of public utilities has been led by liberalization processes – in telecommunications and energy above all – and stronger integration is expected in the near future along two axes: Turin-Genoa-Milan-Brescia and Bologna-Treviso-Padua.
Milan’s status as a metropolitan centre is becoming more and more important within these infrastructures: the metropolitan city impact will affect advanced services and enterprises’ location, the distribution of skilled workers as well as their mobility both in local and international terms.
We are concerned with socio-demographic changes induced by mobility vectors: roads, highways, railways, airports, ports and logistics infrastructures can provoke both displacement and recentralization effects. Within this framework phenomena of population moving and accumulation, the role of cities as powerful attractors, emerge. The new postmetropolitan corridors linking Milan-Turin, Venice-Padua-Treviso, Milan-Bologna are among them.
International literature on cities tries to explain why and how cities grow, and why some cities grow while other do not. One theory is “new production geography” which explains urban growth as a result of skilled workers location choices and also the job opportunities for less qualified and low-paid sectors of the workforce (immigration included). This interpretative effort finds its way in the diffusion of flexible production models distributed both within and between specific geographical settings: clusters, traditional industrial districts, new high-tech districts, localized enterprise networks and metropolitan platforms assuming the form of global cities like Milan.
Urban dynamics seems to be led by enterprises’ location choices which accumulate along corridors and nodes and interact with preferences and choices of individuals that are only partially free, mostly determined by factors like housing, mobility and so on. This helps explaining why in the last 40 years the urban areas which have grown more in Northern Italy are middle-size cities along corridors: like Rimini, Bergamo, Vicenza, Brescia, Parma, Reggio-Emilia, Modena, Verona, Trento and Venice-Padua-Treviso. Main metropolitan areas like Milan, Turin, Bologna and Genoa are lagging behind. A need for “organizing the polycentric region” emerges in which synergies and circuits among metropolitan and middle-size cities have to be designed, both at interregional and sub-regional levels.
Interpreting the urban form
The city is not the place were some industries are located and the social classes (bourgeoisie and proletariat) reside. The city is an industry itself whose raw material is urban land and whose final product is housing (Insolera 1975). These definitions can help to explain a difficult concept: urban form. In the case of Milan we can interpret the changing urban form between the industrial revolution and today as “following the industry”.
In XVIII and XIX centuries the industrial revolution did not take place within the city but close to energy and raw materials. It was only after the creation of the railway network that industry could get close to the markets, i.e. to the city. In the case of Milan, industry grew in Sesto San Giovanni, Brianza and Bergamo. Industrial companies such as Breda and Pirelli began their life near the railway stations. In XX century industry moved to Sesto San Giovanni in order to make use of larger spaces and to contract housing in the spaces left free by the industrial move.
This is why Milan is a case of centre without centralization: a radial model whose expansions have taken place following the railways infrastructures towards the North. Milan’s urban plan of 1912 is the document which follows the expansion toward the periphery introducing streets and boulevards, public gardens and squares able to introduce a parity of citizenship between the centre and the most remote peripheries (Romano 2014). In the following half century, the working class and the bourgeoisie experienced episodes of struggle and social compromise until the end of Fordism. In the final part of the XX century, the former industrial base was “deindustrialized” and new urban housing was constructed by reusing the large abandoned spaces of Pirelli, Falck, Breda, Innocenti. New developments were made: universities, the expansion of private hospitals, new creative industries locations and middle-class lofts.
What is peculiar about Milan, compared to London or Paris, is the contradiction between high density growth (made in the past by industry and the working class, today by finance and the creative class), and low polity. Milan is based on an external source of power corresponding to a weak nation-state. The local élites have been only partially able to negotiate with the central government. The past and recent history of Milan is one of fragmented urban expansion and limited vision.
Interpreting the contract form: the gateway city
Milan as a node of a global network (Magatti 2005) is an urban region of 8 million inhabitants, a “space of relationality” among the first ten in the world, a “platform” based on a “deposit” of networks whose horizons are local/regional, national, European and global. Indices of connectivity and of positionality
are therefore needed to assess the nature of Milan’s global nature. In order to find these indices, the representation and measurement of flows, both material and immaterial, are necessary.
We identify seven functional systems of access-transit-exit to/from Milan feeding different but interdependent flows of persons, enterprises, merchandise, services, information and knowledge. The function of logistics, airports and fairs represents the infrastructure gateway. The functions of universities and research represent the knowledge gateway. The functions of fashion and design represent the creative industry gateway.
Milan’s overall urban system can be read in terms of governance through the (variable, even conflicting) relations within each function and linking the three selected gateways.
Infrastructures represent the main and most powerful sector of the Milanese economy. Their systemic role is that of attracting heavy investments and lobbying for State public financing, assisted by the finance, insurance and banking sectors. The historical role of Milan has been marked by infrastructure-building, in the past and in the present. Its position on the vertical axis of our scheme means that it is intimately close to political and institutional decision-making. Railways from Milan to the North along the Simplon axis were the first modern infrastructures in the first half of the XIX century. The Milan Fair was founded at the beginning of the XX century as a key institution of Milanese industrial and commercial capitalism. Malpensa Airport was planned and implemented as the southern European hub at the end of the XX century: it is also a living symbol of the weaknesses and failures of Milanese élite in the recent past. Finally the Expo 2015 event has been the main infrastructural effort made by the Milanese economy at the beginning of the XXI century. When modern immaterial infrastructures serving the web economy are also taken into account, we have a complete picture of this gateway.
Knowledge and its institutions, university and research, are positioned along the horizontal axis of our scheme for their strong bottom-up ties with the Milanese society. Their past role was historically important in creating the Milanese hegemony in Italian industrial capitalism. Public and private universities were created in the last two centuries by the State (Polytechnic in 1863, Statale in 1924), industrialists (Bocconi in 1902), and religious powers (Catholic University in 1920). Since the second half of the XX century the Italian information and telecommunication sectors, television and web economy, have been largely based in Milan. The newspapers (Corriere della Sera) and publishing industries (RCS, Mondadori among them) are strongly based in Milan.
The creative industry is the most recent phenomenon within the Milanese economy. Born during the postwar economic boom as a result of Marshall Plan investments for reconstructing the manufacturing base, the fashion industry has become a quality production of French models at lesser production costs thanks to a highly qualified workforce. At the same time the design industry has grown thanks to first class industrial designers cooperating with industrial firms in the production of quality goods for daily consumption. The role of the creative industry, supported by research institutions and universities, training schools, journals and professional groups forming a complex ecosystem, has grown year after year until positioning it on the horizontal axis (due to its strong linkages with Milanese society) towards the future. Milan is considered today a leading global city in the world economy mostly for its first class ranking in the fashion and design industries. “Made in Italy” is driven by a number of giants fashion brands (some of them are Italian, some have been absorbed by foreign capital groups) known worldwide, feeding a larger ecosystem of small and artisan firms and independent professionals whose crucial role is forming a natural seedbed for innovation.
The urban contract is based on the (historically variable) social relationships and compromises between these main axial systems. The first is representative of heavy capitalist and financial interests; the second is the expression of the intellectual capital of the city; the third has the flavour of the new emerging forces of the creative class. Looking at North Milan’s recent development it is possible to follow how the contract scheme is implemented (Tosi and Vitale 2011). Past industrial firms have left the ground to service and commercial developers: rents are extracted through redevelopment of deindustrialized areas by real estate groups intimately connected to regional political power.
Peter J. Taylor, the author of the most important research on the World City Networks (2004) has explained that Milan is not only a place of transit, but a place where “many things happen” and this makes it a great city. The proposed metaphor is ecological, composed of input, output and throughput. The throughput is a “channel”: sometimes it is only modestly active but sometimes it creates a great value added. In the city, functionality is essential and each function corresponds to a channel: we have to look at what enters and what exits, and what happens in the middle. Fluxes crossing Global Milan are sticky: they accumulate and adhere to the city and transform it, and in they in turn are transformed by the city.
Property matters. Fluxes are made by companies (both local and foreign); yet this doesn’t imply a diagnosis of a weak city – of dependence upon external forces. It may be that the city simply attracts external functions and sectors where the local entrepreneurs are weaker. We will see that in some cases this does happen, in other cases not.
Fluxes also make clear that the traditional scale of municipal, regional and national economies, no longer represents reality. Scales are less important since the city is a node, sometimes global and sometimes local: a city of cities, a city-region, a global city.
As a logistics node, Milan is a functional region including such poles as Piacenza (in Emilia-Romagna) and Novara (in Piedmont). As an airport hub, Milan is interested in flows which are global in nature. As an international fair, it is a locus linked to a geographic place but it is also a function holding knowledge, which is global in nature, hence it is a globus. Looking at Milan universities and research centres, there is a flow of foreign students, patents and knowledge. In the fashion and design industries the city is a crossroads of worldwide visitors, designers and creative professions: this means global, but also local in term of artisans, businesses and services produced in the district.
This is another way of looking at city’s positionality.
The Milan logistics function
The Milanese logistics region is a quadrangle including Novara, Piacenza, Bergamo and Varese. This is observed thanks to logistics real estate data showing logistics platforms and warehouses. Data testimony logistics’s growing expansion: almost half of the enterprises are located “out of Milan”, in the wider logistics region.
Flows are increasing from and to Asia and East Europe. The main transport mode is the road, followed by naval and (last and marginal) the railway. Air transport is growing but 60- 70% of merchandise moving to/from Italy prefer other European airport hubs such as Munich or Frankfurt. Germany, France and the United States are the main commercial partners of Milan. Milan logistics enterprises account for 14% of employees, 20% of value added and 33% of turnover of the whole Italian logistics sector.
The Milanese logistics region is connected and utilizes Ligurian ports, North European ports, freight platforms of Novara, Verona, Padua, and the logistics gateways of Basel and Duisburg. Its strength is confirmed by 19 terminals (30% of Italian intermodal flows) and by the presence of international logistics groups (Deutsche Post, Saima Avandero, Geodis, UPS). Such groups occupy the first ranks (14 out of 25) in the ranking of logistics enterprises in Milan. International openness is led here by foreign logistics groups.
The Milan Fair function
Located in the conurbation between Milan and Pero-Rho, the Milan Fair is the exposition core of 37.000 enterprises from Northern Italy. It is a world leader in mechanical, electrotechnical (25% are foreign firms) and design sectors such as furniture and fashion (30% are foreign).
The crossing of fluxes and cross-fertilization between the world of domestic production and global people are made possible by the Fair infrastructure. The Fair makes it possible for small businesses located in industrial districts to move (districts on the move) and develop negotiations, absorb change and exogenous shocks, survive and regenerate over the long term. District networks are made of trust between individuals and groups more than of contracts: they need assessment through periodical monitoring. Group members receive stimuli from outside and understand their position in relation to inside partners and outsiders. They can figure out new solutions and generate new ideas. The Fair is both the physical and cognitive scaffold on which to introduce innovation both in products and in processes.
The Milan airport function
Malpensa, Linate, Orio al Serio are the keys of the Milan airports region located in three provinces (Varese, Milan, Bergamo). They specialize in (respectively) intercontinental, point-to-point national and lowcost flights.
Malpensa’s decline from 23 million passengers in 2007 to 18 million in 2013 (but 11 million in the fist half of 2014) is only partially due to the global economic crisis. In fact, in the same period, Linate only slightly reduced its flow from 9.9 to 9 millions passengers, and Orio al Serio increased from 5.7 to 8.9 million.
Competition among Italian airports, the crisis of the national air company and lack of strategic vision by regional and local authorities are among the reasons. Governing an international airport is a matter of strong regional vision like in the case of German airports led by Laender. Malpensa is destined to be a second level hub compared to London, Paris, Frankfurt and Amsterdam. The infrastructural idoneity index HUB (including the minimum connecting time) is 6 in Malpensa, 8.3 in Frankfurt, 7.9 in Paris and 7.3 in London.
The Milanese university function
The system of Milan’s seven universities (9 including Varese and Bergamo) is growing. In sectors like medicine, fashion and design the growth is also due to private investments.
The system is undergoing internationalization through the attraction of foreign students taking place at Bocconi, Polytechnic and IULM. In postgraduate courses, one student out of six is foreign at Bocconi, one out of ten at Polytechnic.
The foreign students are European students (mostly from Eastern Europe) but flows are increasing from Asia, the Middle East and Mediterranean countries as well. Milan could be the training gateway for the new Europe and the capital of the Mediterranean training system. These are important flows but they are also spontaneous and disorganized: a coordinated effort to attract young people from the world is necessary. The critical point is that in Italy, the State is the key institution in the field of the universities, yet its role is declining and investments have been reduced in this time of crisis. Local governments are not interested in assuming a key role. The result is a poor performance in the crucial international ranking system of universities.
The Milan research and innovation function
Lombardy has a concentration ¼ of the total Italian research and development, yet it is only 71th among the 208 European regions of the European Regional Innovation Scoreboard. 70% of R§D regional expenditure is private, 18% is university and only 7% is public administration. Private employees in R§D are 22.000, public employees are 22.000: clearly the productivity of public sector is very low. The balance of payments in the field (property rights, patents, know how: in other terms all the knowledge which is not embodied in a product but “disembodied”) is negative. This means that Milan is weak in industrial innovation, patents and know how; it is positive only in technological services.
The flows (what Milan sells in R§D) are directed to the EU (UK, Low Countries, Germany); also the payments (what Milan buys in immaterial technology) are directed towards the EU (UK, Germany). Milan is dependent on technological knowledge upon Northern Europe, yet it is able to sell sevices.
Also in terms of R§D capacity the university system is internationally closed: 88% of cooperation contracts of Consortia and Foundations and 57% of University Departments contracts are directed to Italy.
Milan is leader at home but it is dependent from outside in the crucial field of production of new knowledge.
The Milan design function
The Milanese design district is based on three pillars: fashion, furniture and home, advertising and graphic design. It combines high conception activities and service production, exhibition, communication, training, and manufacturing. In this sense it is probably first in the world.
Take furniture: 34.000 employees in enterprises often born before the II world war in cooperation with Milan Polytechnich architects-designers in touch with North-American and North-European design schools.
More than 1/3 of Italian furniture companies invest in design as their main competitive asset: their catalogs employ 1141 designers, half of them foreigners. Companies are located in Milan or within 70 Km from the centre. Italy is world leader in the furniture industry, following China. The main 18 companies feed 4.000 client shops, 400 direcly owned by the company. There are 235 show rooms or specialized shops located in downtown Milan, more than in New York or Paris, where Italian companies are actively present.
The Milan Fashion function
The peculiar nature of the fashion industry in Milan is to reunite what capitalism normally divides: conception and execution, big and small, design and production.
The ecosystem of the fashion industry is composed of giants (stylists like Armani and Valentino, Prada and Dolce e Gabbana, Marras, Gucci and so on) and a myriad of artisans, art masters, modelers and tailors able to capture the always changing and contradictory demands of the fashion world.
The conception of fashion products by creative people is a diffused practice, made by a community of different players.
The dimension of such a phenomenon is very impressive. The direct employment is made up of 37.500 employees distributed through 6.000 enterprises (the average dimension of the typical unit of production being 6 employees); but 1/5 of the total value added of the Milanese economy is directly or indirectly connected to the fashion industry (D’Ovidio 2014).
The local constellation of fashion enterprises creates a wider district including Milan, Busto Arsizio, Como, Varese, Monza, Vigevano specialized in different products and production chains (from silk to shoes, from textile to fashion design).
The miracle is that, notwithstanding the overall globalization and delocalization trends, the different phases of conception, design and production are still reunited here: making the daily exchange of knowledge and the quick adjustments to demand variations still possible. The production is made in a range of 60 kilometers from Milan.
The spatial distribution of the fashion industry is also a matter of income polarization. The 48 enterprises with higher revenue are responsible for 94% of the total amount of revenue. The small and artisans firms producing for the giants limit themselves to a small share of the revenue.
The creative industry is largely based on family companies (Corbetta et al 2014). The family of the entrepreneurs leads the 48% of the creative industry companies in Milan (with more than 20 millions euro turnover); the remaining 41% is led by multinationals (what remains is made by cooperatives and consortia). This is another feature of the polarization effect and makes clear that the urban contract is made of both local and global players in an asymmetric game.
The rhetoric of the creative class, led by Florida and others, declares that talented people are attracted by places where some peculiar characteristics of technology, environment and culture exist. In the case of Milan, we can see how different is the interplay among social actors making the creative industry viable. On one hand we find a robust, yet limited group of giants leading the worldwide famous brands and spreading their products around the world, sometimes family-driven companies or sometimes multinationals. On the other hand, we find a diffused system of small and artisan firms, scattered around the territory and interconnected in a vital ecosystem, yet holding a limited share of the revenue produced within the system.