Territorial Capitalism and Global Competition: The "Made in Italy" challenges for SMEs

In an increasingly globalized market environment, there is an impetus for many companies to look to foreign markets in order to maintain and expand margins and competitive advantage. Once embarked on this endeavor, organizations are involved in governing and managing the complex and vast competitive and institutional net of finance, production, communication, and distribution related relationships that constitute globalization. The push to engage in international development is imperative and even small and medium enterprises (SMEs) feel the need to extend their business activity beyond conventional local markets, identifying and employing distinctive yet accessible competitive advantages to be able to compete. One such possible factor is exploration and interaction with the local territories in which they reside. This study analyses this territorial issue as a distinctive factor through which the concept and practice of the label of ‘Made in Italy’ operates. Specifically, it considers the role of interterritorial collaborations – outsourcing activities with smaller added value whilst preserving and enhancing history, style, and talent that constitutes the essence of Italian ‘quality’ – as pillar of the Italian territorial capitalism, operating with a ‘glocal’ approach. The research investigates this Italian phenomenon through an investigation on SMEs that compete successfully abroad (although also in the domestic market) with a ‘glocal’ approach, through the formula of industrial districts. The findings conclude that international expansion is always complex (as, in truth, every growth/development strategy is). For SMEs, however, territorial capitalism could emerge as a specific factor of competitiveness, clearly and most of all when the territorial reputation is noteworthy, like the case of ‘Made in Italy’ is.