A New Phoenix?: Modern Putting-Out in the Modena Knitwear Industry

Abstract

Support for this research was provided by a Jean Monnet Fellowship at the European University Institute and by a research grant of the O.E.C.D.'s Office on Local Employment Initiatives. I am most indebted to Paolo Bignardi, who introduced me to the inner workings of the knitwear industry and gave generously of himself during my many visits to his home and firm, and to the Modena National Confederation of Artisans and its staff members, who offered me invaluable assistance. The Modena Camera del Lavoro, the Modena Association of Small Enterprises, the Modena Industrial Association, and Professors Sebastiano Brusco and Tiziano Bursi of the University of Modena also provided crucial help. In addition, I would like to thank Charles Perrow, who first encouraged me to study putting-out, and Marshall Meyer and three anonymous reviewers for their editorial and substantive comments. Drawing on data from the contemporary Italian knitwear industry, this paper examines putting-out, the domestic system of production, and criticisms of it in traditional theories of economic development as inherently backward and organizationally inefficient compared with large-scale production. I describe the historical putting-out system and its context and distinguish it from modern putting-out by contrasting the features of each. The paper shows that a modernized form of putting-out, composed of interlinked microfirms, is compatible with high living standards and organizational efficiency. The success of the system rests on technological and marketing factors, the presence of cohesive family units, cooperative relationships between business and community actors, and an institutional environment supportive of small, family-run firms.'