What's Gone Wrong with the Third Italy

Msc BUSINESS ADMINISTRATION INTERNATIONAL BUSINESS

CONTENT

Introduction p. 3

Early glitches of the SMEs within the industrial districts p. 5
Analysis of two of the regional clusters at stake p.6
What went wrong? p. 7
Concluding remarks p. 9

References p. 10

Introduction
The purpose of this paper is to determine to which extent the economic areas known as ’Third Italy’ have not managed to achieve the well-desired status. The local development model has been presented as the perfect small-scale flexible capitalist type that has adopted a post-Fordist mode of production (Grancelli, 2007).

The economic cluster referred to as Third Italy, was founded in the post-war period (1950s and 1960s) when the global economy was going through hard times of recovery. In the north-east part of Italy a new type of firms was developed. The question may be put why didn’t the other two important industrialized districts known as First Italy (the industrial heartland of the North) and the Second Italy (the backward South) have become the regions of wealth and economic growth. The answer lies primarily in the cultural values: the local culture of entrepreneurship and cooperation (Boschma, 1998) that to some extent doesn’t apply for other Italian regions. The following figure displays accurately the industrial zone of Italy:

According to Bagnasco (1977) from a economic point of view Italy was divided into the ’Three Italies’: the North-west, the big companies, was tagged as ’central economy’, the shallow regions of the South seen as ’marginal economy’ and the central-North-eastern regions- known as Third Italy- characterized by the presence of small firms that are defined as ’peripheral economy’. Nonetheless, the way in which the Third Italy region was defined didn’t hide the real facts; when compared to the North-west typology, productivity per worker

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