The Italian Smallness Anomaly: Coexistence and Turbulence in the Market Structure

The Italian economy has always been characterized by a relatively large presence of medium and small size firms, a feature that has received a range of definitions and has been the subject of a large number of studies even in the international literature. The continued and sometimes large relative presence of small plants and firms has long been considered a kind of anomaly. However, the alleged inefficiency and unsustainability of small scale productions is in patent contrast with the durability of the phenomenon, with the good economic performance of those regions where small scale production dominates, with the often high innovation performance of small firms, with their export performance and with the high degree of internationalisation of many small and medium size firms. Small wonder then that in the last twenty years there has been a complete revision of the interpretation of the small firm’s role in economic theory, mainly along the lines of evolutionary economic theory (Section 14.2).