Mondragon and Emilia economic development models

Over time, economists have studied the uniqueness of the development models in both Spain and Italy for their success. In fact, the two models have been applied across other different countries and yielded positive results especially in the least developed countries of Africa. The Mondragon development model is based in Spain while the Emilia economic model is based on the developments in Italy. The two models are unique and different in their approaches to economic developments. However, they both have similarities in the fact that they are both geared towards the achievement of economic development in the respective countries.

The Mondragon model is based on the use of cooperative development to steer economic growth in Spain. In particular, the Basque region of Spain is an excellent example of the effectiveness of cooperatives in the development of different economies. Essentially, the potential of cooperatives to effectively compete with large international companies is emphasized in the model (MacLeod & Reed, 2009). The concept is widely attributed to the stopping of outward migration of locals into other countries. The effect is that it contributes to the local economic development of the country and the local people. The main difference between the Mondragon and Emilia economic models is that the former banks on cooperative movements while the former banks on small micro enterprises. Essentially, the Mondragon model uses the power of the society to steer economic growth by pooling people’s earnings and savings together. In contrast, the Emilia model uses the individual powers of entrepreneurs in driving economic development in Italy.

In sharp contrast, the Emilia model emphasizes the important role that small micro enterprises have on economic development in Italy (Amin, 1999). The concept is of great local and economic value owing to the support it acquires from the enterprise support system. The model is celebrated for its role in the development of the Basque area of Italy and the citizens of the location.  The model uses a mono cultural institutional base in its industrial system and has a singularity of purpose which is a detriment to the development in today’s world. Moreover, the presence of intermediaries has been effective in advancing economic development in Italy. Importantly, the ability of the intermediaries to foster common understandings and solidarity helps in the advancement of economic development in the country.

The expansion of small micro enterprises in the Italy is based on two vectors which made the model most effective. The first vector is the industrialization model of the agriculture where farm products were manufactured into quality food products to be exported in foreign countries. The process of industrialization pooled small firms into the business. In some instances, the firms were grouped together as seller or buyer cooperatives therefore increasing the economies of scale. This development is similar to the Mondragon model of economic development which emphasized on the use of cooperative movements in the development model. The second vector is the mushrooming of small rural towns that enhanced the development of manufacturing firms.

Essentially, the two models are both different and similar in some aspects of development owing to the uniqueness of the two models. Importantly, the different locations of the two models led to the uniqueness of the models depending on the circumstances at the time. While the Mondragon model emphasizes on cooperative movement, the Emilian model uses small micro enterprises to advance economic development.

Economic development models in Brazil and Venezuela

Brazil and Venezuela have continually been lauded for the success of their socioeconomic development models. In particular, Brazil’s entry as a BRIC nation can be attributed to the effectiveness of its economic development model that has spurred economic growth to great heights. All over the world, the concepts used in Brazil and Venezuela have been adopted in different countries with the achievement of the same positive results. A striking uniqueness of the economic development in the two countries stems from the fact that they have been faced by years of consistent poverty in the past. The concept in Brazil articulates the State as an important player in the development of the country. In the Venezuela model, though, the main emphasis is the use of company ownership structures to achieve a communal economy.

In Venezuela, there are three main economic pillars: the communal economy, private sector, public sector. The communal economy model articulates the advantages of having a socially based and communal ownership of the tools of production. As thus, it is not based on the ideals of individual accumulation of capital but an earnest bid to have the wealth of the country distributed to as many individuals as practically possible. The emergence of economic development in the country of Venezuela came as a blessing due to the transformation from rural populations to urban ones (Lemaitre et al, 2011). The main ingredient of the economic development witnessed in the Venezuelan model is based on the production and exportation of oil to other countries. The industrialization of the oil sector led to an influx of immigrants that supported the development of the country.

In Brazil, economic development is a responsibility of the state which must identify the challenges and problems facing the country and look for solutions for the same. The state has implemented unique measures of regulating the different forms of distribution of social goods (Marguit et al, 2010). Just like in Venezuela, the starting point for the Brazil government is the social inequality that plagued the country for many decades in the past. The importance of state intervention in the correction of the social anomalies of the past is an important aspect of the economic model in use in the country. In addition, the model banks hope in the use of technological incubators of business development models including cooperatives. Again, the model in Brazil is similar to the one in Venezuela because they both adopt the use of science and technology through research from institutions of higher learning.

In Venezuela, the incidence of high standards of living has been occasioned by the combination of both political will and improved public investments from the government and the public alike. Just like in Brazil, the model in Venezuela recognizes the importance of public investments. However, Venezuela banks on the citizenry to inject money to the businesses while Brazil views the government as a referee to ensure fair play in the market. The concept of having technological incubators is also a dominant practice in the case of the Brazilian model of economic development. As thus, it is common to find the modeling of business and their analysis before they are brought to the real environment. The advantage of this model is that it ensures that innovation is incorporated in the development of the larger economy. Ideally, therefore, most of the features in the two models are similar

References

Lemaître, A., Richer, M., & de França Filho, G. C. (2011). L’économie solidaire face à l’état en Amérique Latine. Revue Tiers Monde, (4), 159-175.

Amin, A. (1999). The Emilian model: institutional challenges. European Planning Studies, 7(4), 389-405.

MacLeod, G., & Reed, D. (2009). Mondragon’s Response to the Challenges of Globalization: A Multi-localization Strategy. In Co-operatives in a global economy: The challenges of co-operation across borders (Vol. 111, No. 140, pp. 111-140). Cambridge Scholars Publishing in association with GSE Research.

Marguit Neumann Gonçalves, Marcela Ribeiro de Albuquerque & Rosalina Lima Izepão. (2010).

Incubation of Solidarity Economic Enterprises: The Experiences of The Incubator Unitrabalho-Universidade Estadual De Maringá-Uem In Paraná State-Brazil

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