In Jablonec’s glass
industry, competition for market share is favouring larger, more industrialised
firms, which use modern equipment to achieve economies of scale. The smaller
firms’ reliance on pre-industrial methods of production makes it hard for them to
attract the capital investment they need to compete with the larger firms on
their own terms.
Individual survival
In Jablonec’s glass industry, several of the small firms
don’t operate in a factory as such. Instead,
 |
| Pressing strings of beads, Jablonec |
each firm’s operations are dispersed
across a number of sites. These may include:
·
part or all of a building, which the firm rents
to run the business, store and distribute its products and, perhaps run a shop
·
small workshops in rented premises
·
private homes in which people make the firm’s
products on a ‘piecework’ basis (i.e. they are paid for each piece of glasswork
that they produce).
When asked, “What one thing would enable you to develop your
business?”, the owner of one of Jablonec’s small glass firms answered that he
would really welcome capital with which to buy premises in which to gather his
operations together in one place. This would bring him several benefits: his
premises would be a capital asset, rather than a drain on income through rent; his
control over his whole operation would increase; and he could build a narrative
through which to market his products – “tell the whole story”, as he put it.
 |
| Glass beads get pearlescent coating - Jablonec |
A bank would seem an obvious first stop for a company seeking
capital to develop. However, that same owner said that the local banks are
cautious and conservative lenders. Instead of backing small companies wishing
to develop, they restrict their loans to larger, wealthier firms. As ever, the
wealthier you are, the easier it is to become wealthier still; and the less you
need to borrow money, the keener the banks are to lend you some!
Collaborative
development?
Jablonec’s smaller glass firms need alternative business
strategies if they are to survive the local banks’ intransigence and match
their larger competitors’ economies of scale. For example, the area’s glass
firms could collaborate to grow the market overall for Jablonec glass. However,
the firms’ present single-minded focus on competing with each other – while
necessary for their survival - precludes anything more than minimal
collaboration between them.
 |
| Hand-making glass beads - Jablonec |
There is a vehicle for such collaboration - the local glass industry
association, to which many of Jablonec’s glass firms belong. However, the
association restricts itself to assisting individual firms to attend trade
shows and exhibitions. This reproduces the firms’ individual competition, rather
than advancing the interests of the local industry as a whole, or even expressing
a view about what those interests are.
New sources of
investment
If Jablonec’s smaller glass firms decide to collaborate –
within or alongside the local industry association – they could get around the
local banks’ reluctance to invest in them by approaching two alternative funding
sources: the Czech Ministry of Regional Development and the European Union’s
European Regional Development Fund.
The Ministry is an obvious potential source of funds to
develop Jablonec’s glass industry. However, its website (in English) doesn’t
describe its day-to-day activities; and while it mentions the spending of
money, there’s no indication as to what this money is spent on or the criteria
by which it is spent. Perhaps a direct personal approach would elicit more
useful, practical information.
The ERDF aims to help reinforce economic and social
cohesion by redressing regional imbalances and co-financing the conversion of
declining industrial regions. It supports a rage of activities, including
research, development and innovation; telecommunication, energy and transport
infrastructures; and health, education and social infrastructures. In 2014 –
2020, ERDF support will concentrate on three themes:
·
research and innovation, including support to public research
and innovation bodies and investment in technology and applied research in
enterprises
·
creating
and safeguarding sustainable jobs, through co-investment in small and
medium-sized enterprises
·
climate change mitigation.
Clearly, the first two of those themes are relevant
directly to the development of the glass industry in Jablonec.
The latest report on the Festival of Glass web site shows that it's becoming increasingly effective as the public face of the Festival.
