Abstract

The paper gives an interpretation of the recent diffusion of the processes of productive outsourcing that increasingly characterizes industrial activities. This empirical fact has two main features. The first is that it replaces a hierarchical paradigm of information diffusion, in which all the prominent information must flow to a central processing unit, with a decentralized paradigm in which independent firms collect and process autonomously part or all the prominent information. The second is constituted by the specific pattern of production innovation, that is the result of autonomously developed inputs, that are made complementary by the work of the network through an encapsulation process of the information. Such a process is made possible by the fact that after an initial phase, in which a new input is jointly projected by the contractor and the subcontractor and in which the information comes shared, a second phase follows in which the prominent information for the specification of the characteristics of the product and for the solution of the local and the unforeseen problems is collected and processed sequentially and then encapsulated in the input by autonomous production units. In comparison with the vertical integration (make) or the market (buy), this form of governance (subcontract) allows for the organization in more efficient manner of the processing of information, for the reduction of the informative costs, and for the minimization of the risk of spillover. The processing of the information becomes more efficient because of the simplification of the internal organization of the firms, through the practice of skipping level, and of the network structure, through the disappearance of the market maker. This evolution makes resources available for the productive units and attenuates the distortions in the transmission of the decisions. Besides it is helped by the fact that the information is processed in the decentralized paradigm by the same subject that collects it and this allows for the exploitation of the learning economies. The information cost reduction is the consequence of the existence in the network of a competitive process, that makes the cost much more visible the more the subcontractors interact within a stable population with limited flows of entry and exit. The dimension of such flows depends on the transferability of the production process, which is related to the technological level of production and the degree of specialization.