Learning from successful small and medium firms in the South of Italy

Abstract

This thesis questions literature approaches regarding Southern Italian development, and suggests a different way of thinking about the issues of i) culture, ii) organizational development, iii) social prerequisites for development. This study of successful small and medium-sized firms in the garment sector in a small city in the South of Italy, found that: i) There is no culturalist or historical functionalist argument that can explain or address the causes of underdevelopment of some regions compared with other ones, or the lack of industrial development paths. Culture impacts the way people interact at various levels, the way they link themselves in community relations over time, but elements considered negative at first sight have a certain ambivalence and can transform themselves into a positive one over time. ii) In the small town in the South of Italy an organizational process of development occurred. Over time, through an economic, punctuated process, these small and medium-sized firms managed to organize successfully the assets, mainly types of knowledge, already present in the environment. However, in this process, there has been no organizational prerequisite, such as the division of labor, which has made the firms more competitive or better off in the market. The organizational developmental process has been successful for the presence of four key elements: 1) the local presence of suppliers; 2) semi-skilled knowledge in sewing provided by traditions; 3) the presence of distribution channels and their evolution over time; and finally, tied to the presence of the first three elements, 4) a quick, flexible decentralized production process, the subcontracting, which allowed the firms to be ready and prompt in answering the shifts in the market. iii) There is no economic prerequisite for development, nor is there a social prerequisite. All the phenomena I will describe took place not in a well-developed civil society, but in a difficult social environment, contrary from what some strands of literature about industrial development argue. However, the success of these firms is leading the entrepreneurs to change their own self perception and to recognize themselves in new, better off social categories, with a strong desire for improving their social and economic conditions.