Local strategies of industrial restructuring and the changing relations between large and small firms in contemporary Italy: the case of Fiat Auto and Olivetti

Abstract

The aim of this article is to show that firms’ responses to changing market conditions and technological innovation cannot be explained by referring to economics only. This has been demonstrated with respect to the industrial districts, where there exists creative interaction between a population of small firms and a system of values and institutions which is historically ‘produced’. But large firms’ development too must be seen as the outcome of an interaction between economic decisions and the constraints/resources of their peculiar social and institutional relations within and outside the factory. This thesis has been illustrated by exploring the different strategies of two Italian large firms-Fiat and Olivetti-which undertook restructuring in the last ten years. The focus is on their relations with their subcontracting networks, certain parts of which have become increasingly autonomous in recent years. While at the level of industrial organization the diversification strategies of small firms and the increasing flexibility of large firms have modified the relationships of traditional suppliers, with each party enjoying greater autonomy and a tendency towards a form of co-operation among equals, the means and the political will to create articulated and well-balanced productive structures are both lacking. This point is particularly significant in relation to some recent interpretative proposals which would like to see, in the Canavese or even in the much wider area of Turin, the creation of a technological district or of an industrial district characterized by a strong innovative tendency. But if some vocation for innovation can in fact be observed, a locally-integrated structure does not exist as a point of reference for the social organization of production: the social system which was built up by the large firms has broken up but it has not yet been replaced by another capable of regulating a more complex and differentiated economy.