Footwear cluster’s decline in the South of Brazil: the transformation of a supercluster

Purpose This paper presents an empirical contribution to the literature on cluster evolution, highlighting the decline phase. The analysis focuses on the footwear sector in Rio Grande do Sul (RS) state, in southern Brazil, where an important footwear cluster is located, which was once considered one of the world's largest footwear clusters. The purpose of this study is to analyse the transformation of this footwear industrial sector since the beginning of the 2000s using several sectoral statistics. Design/methodology/approach This paper presents an empirical and longitudinal study that comprises the sourcing of 20 years of secondary data, based on official sources. The main data analysed were production, price, industrial structure, labour market and foreign market. Findings The main results indicated a significant reduction in production, export and employment. In addition, a precarization of the labour market was observed, with lower wage levels, even with an increase in the formal qualification of labour over time. The finding is that the RS footwear sector underwent a huge structural change and lost the status of a worldwide supercluster. This decline occurred due to two central factors: an external shock related to China's entry into the international and Brazilian domestic markets, accompanied by a slowdown in the Brazilian economy since 2015; and the difficulty of local firms responding to the new challenges. Research limitations/implications Synthesizing the findings, it is understood that this paper contributes to registering the trajectory of decline over time of the footwear sector in RS. In this sector, the Sinos Valley cluster is located, historically known as a footwear producing and exporting supercluster. This cluster loses the characteristic of a “supercluster”, but it still remains an important footwear cluster in Brazil. Therefore, this study reinforces the existence of fragilities already pointed out by the literature in Schimtz (1999) and, more recently, in Schmidt (2020). The need to address a set of fragilities remains current, both at the micro- and meso-levels. This is key to reversing the decline trajectory of the cluster and the sector. Moreover, as recent studies on clusters point out, one still must think about the impact of another ongoing paradigmatic transformation concerning the use and development of Industry 4.0 technologies. Thus, the central challenge is to think about and implement new public and private policies. The historical, economic and social relevance of the sector and the cluster demand efforts to reverse the decline. Originality/value This study focuses to contribute to the discussion about the decline of the footwear production in the region by analysing secondary data regarding the industrial sector. This is an analysis at the meso-level (industry). The authors understand that the originality of the research lies in the longitudinal analysis for a recent period (past 20 years) that captures the greatest current crisis experienced by the region.