Entrepreneurship, Polycentrism, and Elites

Local Industrial Development in Modern Italy

Carlo Carboni, Francesco Orazi

• Publisher: Routledge
• Year: 2020
• Print ISBN: 9780367643911
• eBook ISBN: 9781000282191
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

The book is a cross-section of the over all Italian development. Italy can be considered a microcosm that contains all the imbalances and territorial differences that can be observed in the European macro-areas. Its north can now be considred integrated with the more developed European continental shelf. The Centre represents a local development in transition to a more visible technological change. The late south risks accumulating more socio-economic backwardness. For these reasons, we believe this volume is useful, with just a few pages presenting one of the most interesting cases of local industrial development, outside the mainstream of the industrial economy which saw in Fordism and Taylorism the best way for industrializaion. Here, on the contrary, it is argued that big fish cannot always consume the smallest one that flickers faster and its flexibility, that has social roots, can be an advantage in global markets. Technology appears to be the key to the future.

Please note: This title is co-published with Aakar Books, New Delhi. Print edition not for sale in South Asia (India, Sri Lanka, Nepal, Bangladesh, Pakistan, Maldives or Bhutan)

1
Rise and Changes of Italian Local Development

1.1 Three Stages of Local Development in Third Italy

On several occasions, observers and scholars have pointed out the pivotal role played in the last 30–40 years by the local Italian economy development. It is an endogenous development, a self-generating one, combining ingredients as local factors of economic, socio-cultural and historical character.¹

Within the economic and sociological literature it has consolidated the idea that the industrialization of our country took place not so much thanks to the great Fordist industry in the north-west, as the spread of small and medium industrial enterprises in local and semi-peripheral territorial contexts, some of which were defined by Becattini as industrial districts, i.e. local communities of companies and people.² With this expression, the Italian economist emphasizes two elements: (i) the importance of technical cooperation between firms that occurs in a district-sector (for example, textiles, footwear, etc.), (ii) the relevance of socio-context roots of the enterprises, mostly small and medium-sized (SME). The “local”, understood in the socio-cultural and institutional context, can contribute decisively to create value and economic development. Therefore, the local economy is deeply rooted in the social, local community. Community social cohesion has represented in the past, an essential vector for take-off development. Even today, the social capital³ is considered an economic factor of production at the economic level.

The international social literature has long since occupied the local development stimulated by the successes—production and employment—obtained by the Made in Italy industrial districts⁴ (as well as tourism and, in part, green economy). Therein, in the 1980s it has become a growing conviction that local development denoted not only an alternative to the Fordist industrial economic growth, but also a path of social development “non-traumatic”, unlike the one best configured by the Fordist development (“one company, one town”).

Local development is thus a significant issue for some academic disciplines, including economic sociology, and especially for those who work at the local level in the field of industrial, economic and social policies.

The theories of local development show on the one hand, that every territory follows its own particular path. On the other hand, they point out that some regional areas (Veneto, Marche, Tuscany, etc.), which are more fully characterized by local development systems, are similar to the special synergies that occur between economic factors and social factors (cultural and institutional). They give rise to “diffuse” territorial, with high density of entrepreneurs. These regions constitute a homogeneous macro-regional area which Bagnasco refers to as Third Italy and what Fua calls NEC (North-East-Centre Italy), a distinct social formation from north-west as well as from southern Italy (Mezzogiorno).⁵

At the diachronic level, by contrast, the issue of the different stages of development which were experienced by localism over the last forty-fifty years has been inadequately discussed. Though we have now perceived the profound transformation and the phase of changing local development. To understand this transformation, it may be useful to distinguish at least three stages of local development in the aforementioned regional areas:

• A spontaneous (maverick) stage: The take-off of industrial development, from the 1960s to the 70s, of which we will give a brief account given the large existing social literature on the emergence of SMEs in urban and rural areas of diffused economy.⁶
• The maturity stage, during the 1980s and 90s, when the emergence of small is beautiful, culminating in a high given institutional attention to industrial clusters.
• The relative decline/innovation stage, since the last years of the twentieth century till today, during which there is a noticeable fogging of Italian local development, as a consequence of the rise of the so-called turbo-capitalism, which is promoted by financial, technological, globalist forces. In this third phase, compounded by the recent economic slowdown, the “local” seems to have become opaque with the advent of globalization, like the small and medium enterprises crushed between the economies of scale achieved by large corporations foot loose (on the loose) and competitive advantages of new aggressive competitors, especially from large emerging countries such as China, India and Brazil.

Before analysing these phases, it will be appropriate to define what is meant by a localism. For now, we must keep in mind the statistical definition that formalizes it as a Local System of Labour (henceforth SLL), that is, an inter-communal territory with a high degree of population self-containment (over 70 per cent). This implies a large part of the inhabitants of the SLL working in the same territory in which it resides. Localism then means that residence and work are seen in tandem as a territorial social community.

1.2 The Stage of Spontaneous Local Development

The spontaneous stage is characterized by endogenous and self-generating local development, which essentially leverages on local economic and human resources. Not surprisingly, Massimo Paci, one of the most acclaimed scholars of this stage of development, emphasized that some semi-peripheral economies (especially the Marche region, the subject of his studies) were developing locally, “on their own”, both far from the Fordist path which adds big cities to large industries, and far from centralized state policies, mainly aimed at bridging the gap between the north and the south.⁷ According to Paci, this semi-peripheral economic development, occurred with the spread in the area of micro and small enterprises, particularly in traditional sectors (fashion, furniture, partly mechanical) creating a common economic backdrop in the territory, not centralized by the large urban web.⁸ Work ethics and culture of self-employment, as we shall see, were the main springs through which the self-generating development acquired functionality and compactness.

Moreover, the scenario of the 1950s and 60s in Italy was dominated by industrialization and the birth of a Fordist society, at least in the big cities of the north-west, where the increasing urbanization produced new rhythms and new social organization, a new meeting between big business and the state. On the contrary, local development occurs in semi-peripheral regions which are characterized by rural-urban continuum, as well as by the relative impact of the two main regulation forces of the national power (i.e. the state and the large market forces).

However, researchers were quick to point out that the relative absence of state policies in terms of (social and education policies) constituted a social context limit for local development. For example, the stage of spontaneous development was not only accompanied by the most disparate forms of illegal work and precarious jobs, but also by a strong school dropout by adolescents and young people, who preferred to work rather than attend school (driven both by traditional work ethic and, then, by consumer expectations).

The relative lack of centralist state policies in semi-peripheral NEC economies would have produced perverse effects if some local social nets and also a certain dynamism of local institutions would not have worked: in short, the family and community cohesion of the municipalities. But we have to take into account that in 1961, a century after the unification of Italy, almost half of the Venetian homes had no running water (48 per cent), three out of four without bathrooms (72 per cent), one out of six without electricity (15 per cent): a situation slightly better than that of some regions of the Mezzogiorno (Southern Italy plus Island).

Within the north-west, the sudden Fordist industrialization (during the 1950s and 1960s) had issued an unprecedented economic boom, but also led to serious social problems, due to migration of our southern people to the north. Within the Fordist model rooted in the so-called industrial triangle (Milan-Turin-Genoa), the process of industrialization took advantage of immigrant labour from southern Italy. Fordism plus Taylorism work organization could finally use unskilled labour: the common worker without any education or qualifications, often even below age.

Besides the attraction exerted by the big companies that was synonymous with progress, the emigration to northern Italy was accelerated by the mass media such as radio, telephone and, in 1954, by television. In 1958 the municipalities of Turin, Genoa and Milan roughly “recorded 69,000 new residents—historian Paul Ginsborg writes—in 1962 this number rose to 203,800 new units.” It is obvious that to urbanize this mass of southerns has been very difficult.⁹

The cities of the industrial triangle changed face. And also the surrounding countryside changed. The southern social web, after emigration, became more anaemic for the young workforce. Where the Fordist model was better developed, it had resulted in a perfect combination between the large factory and the city, according to the model “one-company, one town”. A coincidence of interests is sometimes so narrow as to make the destiny of a wide urban area dependent on strategies of a large company. It is a relationship so close as to invest, beyond the economic-productive sphere, even the socio-political and cultural ones. Migration flows had led to a population growth of large cities. In Milan, near the unhealthy coree of a suburb that was spreading visibly, growing like mushrooms the concrete block of public housing, but also the first skyscraper, the famous “Pirelli”. However, around the mid-60s, taking into account a hundred homes in Milan, one in seven still lacked drinking water, two out of five bathrooms and more than half central heating.¹⁰

The southern immigrants had to endure exploitation in the factory and overcome the persistence of hardship and social discrimination. The increasing urbanization therefore involved a new social organization but has struggled greatly to be realized. The workers’ struggles at the turn of the 1960s and 70s, urged a welfare state’s response to heal fractures and social conflicts fuelled by industrialization. All this created the conditions for a new model of social development, Fordist-Keynesian, a conductor of mass education, as the supply of social services on a large scale. The Fordist industrialization therefore implied a double social divide: in the north, the social distress of the common workers emigrated from the south with their families; in the south, the social hardship for the significant deprivation of the young motivated workforce: this emigration was a net loss of human resources for the south.

Since the mid-1960s, the NEC was instead engaged in an economic and industrial take-off to which it was not accompanied with a sudden social organizational change such as had occurred in the Fordist case. The persistence of a sort of rural-urban continuum keeps working within NEC. Indeed, a factor that characterizes the particular typical social structure of a community-based widespread industrialization scenario is a human settlement distributed in small and medium-sized cities, with no strong urban concentration phenomena, though not comparable to those induced by the Fordist development (Turin, Milan) or by the intensive growth of state headquarters (Roma).

Within Third Italy, industrialization took the foot without the appearance of serious social fractures. The change occurred in a scenario of a continuation of traditional values and institutions, while the territorial infrastructure (electricity, running water, paved roads, etc.) began to take shape. The modernization was imminent and knocking at the door.

Massimo Paci was among the first to observe empirically, in the early 1970s, a process of diffusive industrialization in semi-peripheral areas (compared to the industrial triangle and to the development of the state apparatuses in Rome as well as in southern big cities). He assumed initially that diffusive industrialization had socio-economic problems even more severe than those experienced by the common worker in large companies in the north-west. The worst treatment was evident in terms of protections and wages for the engaged workforce in small industrial and handicraft enterprises within a semi-peripheral economy such as Marche. Paci, however, argued that low wages and precarious jobs or off the books work, were socially accepted and softened within families as a regulation institution of the local labour market. Especially for the presence of an extended family pattern within which the peasant ethic urged young people and adults, male and female to work, backed by elders and relatives who had mostly managing reproductive functions, self-production and self-consumption. In the extended family a plurality of entries occurred and were acquitted by reproductive, self-production and self-consumption functions. These functions balanced out both low wages and irregular work treatments (including domestic work, especially of women)¹¹ and the shortage of state social services.

Not surprisingly, the industrialization for small medium enterprises did not cause a working class conflict comparable to the union of large enterprises of the north-west during the 1960s and 70s. In the Fordist industrial triangle, as seen, the heavy migration created problems such as wages, housing, social and cultural needs of the southern immigrant population marked by cultural delays and dis-embedding. On the contrary, within the diffusive economy of SMEs, industrialization has relied on the resident population, thereby resulting in a high rate of self-containment of the resident population. Industrialization is therefore characterized by an endogenous path of development based on the local community. This, in turn, has softened and diluted the material and cultural leap required by the industrial development.

One wonders why the Third Italy (NEC) localism—intended as community self-containment basins of the population—have managed to field one self-generating development of industrialization, as opposed to the southern localism. High density of local systems was found as much in some areas of the Third Italy and in some southern areas. Not only are regions like Veneto and Marche rich in local systems, but also regions such as Southern Calabria. While developing the industrial triangle industry attracted only partially immigration from certain regions of the NEC (thanks to “resistance” by organization sharecropping of their agriculture), in Mezzogiorno. The agricultural crisis pushed the landowner organization to release the excess of generic labour, more willing to emigrate for work to northern Italy.¹²

However, there are many other reasons as to why local development has spread in the Third Italy and only marginally in the south.

The first is that the regions of central and north-east Italy are contiguous to the north-west and this has encouraged herd behaviour. Geographical proximity has undoubtedly counted as a propellant for local development in the NEC, even for a certain decentralization of production flow to craft micro-enterprises. Geograp...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Contents
• Foreword
• Introduction
• 1. Rise and Changes of Italian Local Development
• 2. Ruptured Events and Social Practices in Italian Local Development
• 3. Polycentrism and Institutions
• Conclusion
• Afterword