Emerging Hubs in Central-Eastern Europe, Trade Blocs and Financial Co-operation

Many European countries have faced the erosion of the competitive advantage in the international market with a mixed strategy of productivity increase at home and labour cost reduction abroad, through the international fragmentation of production and subcontracting in low wage countries. Italy in particular, has delocalized segments of its industrial production in Eastern Europe. The advantage of delocalization abroad – with particular reference to East European countries – is due to the low cost of labour, depends from the capability to transmit information efficiently and the availability of a complete supply-type blueprint in the receiving country. The paper discusses the prospects open to Italia apparel firms and presents a case study dealing with the development of outsourcing by the Benetton group in the last decades.