Italian small business: strength and weakness in the long term view Andrea Colli | Università Bocconi, Milano SAPIENZA UNIVERSITÀ DI ROMA 25-26 NOVEMBRE 2016 CONVEGNO SCIENTIFICO LA SOCIETÀ ITALIANA E LE GRANDI CRISI ECONOMICHE 1929-2016

The Italian “exception” 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Italian small business: strength and weakness in the long term view The Italian “exception” Italy is the only Mediterranean country which had a true industrial revolution at the end of the Nineteenth century, which had been followed by a process of (discontinuous) convergence with the most advanced industrialized countries during the Twentieth century. However, a completely divergent industrial “demography”.

Small firms in Italy today – the quantitative evidence 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Italian small business: strength and weakness in the long term view Small firms in Italy today – the quantitative evidence

Small firms in Italy yesterday – some quantitative evidence (I) 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Italian small business: strength and weakness in the long term view Small firms in Italy yesterday – some quantitative evidence (I)

Small firms in Italy yesterday – some quantitative evidence (II) 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Italian small business: strength and weakness in the long term view Small firms in Italy yesterday – some quantitative evidence (II)

Small firms in Italy in the long run – some propositions 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Italian small business: strength and weakness in the long term view Small firms in Italy in the long run – some propositions The “Italian exception” is largely due to the fact that notwithstanding the increasing relevance of big business (private and State-owned) in the course of the country’s economic history, the “small firm economy” has kept over time a: a) Under the quantitative perspective, a constantly relevant contribution to GDP formation and AV in the manufacturing sector b) Under the qualitative perspective, a largely autonomous and non- subordinated (to the big business) role, differently from other industrialized economies (memo: Japan)

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Imprenditorialità e cicli economici in Italia. Linee generali di interpretazione

Small firms in Italy in the long run – the explanations 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Italian small business: strength and weakness in the long term view Small firms in Italy in the long run – the explanations Business history research has tried to provide a number of explanations for such a peculiar persistency (Colli 2002; Colli and Rinaldi 2015) A belated industrial developement, largely linked to the primary sector and to regional markets until WW1, in which the small dimension could operate efficiently Some “efficiency-enhancers” for small firms: persistent trading capabilities, the role of the family as provider of capital and labor, the presence of clusters (industrial districts), a efficient, small-dimension oriented, banking system. An overall intense “institutional tolerance” (memo: endogeneity matters a lot): fiscal tolerance, political and cultural support. A “macroeconomic efficiency”: the countercyclical argument

Focus: the countercyclical argument 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Italian small business: strength and weakness in the long term view Focus: the countercyclical argument A new research direction: one reason of the resilience of small firms lies in their flexibility phases of economic downturn and crisis. Some (scarce) evidence in existing literature about industrial demography and economic cycles. Qualitative evidence (Colli 2002) shows that small business pervasiveness increases in phases of slowdown of the economic cycle. Some crucial phases: 1870s and the crisis in the primary sector The postwar reconstruction(s) The 1930s The 1970s Which proxies for birthrates?