Globalization and local industrial development in the European periphery: Enterprise strategies in Eastern Macedonia and Thrace

Abstract

Over the past quarter of a century or so parts of the countryside of southern Europe have undergone a process of socio‐economic change. More specifically, clusters of small towns and villages in Spain, Portugal and Greece, following on the acclaimed development path of the Third Italy, experienced a mushrooming of new manufacturing enterprises. Industrial growth in these areas was closely associated with the renaissance of industrial districts and a trend towards increased globalization of production. Within this context we set out to explore how enterprises located in peripheral areas are integrated in international production networks. Our paramount aim is to identify the effects of increased globalization upon the depth and characteristics of the embeddedness of new manufacturing enterprises and upon the local socio‐economic milieu. Drawing upon the experience of Eastern Macedonia and Thrace, one of the poorest regions of the EU, we argue that industrial growth was initiated by the decision of large‐scale enterprises to move into the area. This relocation was induced by the incentives involved in the regional development policy and the availability of a small army of underemployed males and house‐bounded females. The deepening and widening of the processes of globalization during the late 1980s and early 1990s offered a number of new threats and opportunities to local manufacturers. The 19 enterprises included in the panel not only survived in the face of intensified competition, but were also able to achieve a modest increase in the employment that they provided.