Flexible Specialization in the Southern European Periphery: The Growth of Garment Manufacturing in Peonia County, Greece

Since the mid-1970s a number of rural areas on the periphery of Southern Europe have undergone rapid economic growth and structural transformation. They appeared to be following the earlier and much celebrated experience of the Third Italy comprising the North-East and Central provinces. The major form of industrial organisation which emerged in these regions was the small “flexible” firm, which was widely regarded as an alternative to the principles of Taylor-Fordism that lay at the heart of the industrialisation process of the more favored regions. However, almost from the outset the idea that flexible specialization presented a coherent and robust organisational paradigm has been controversial. Much of the debate was directed towards Spain and Portugal, but Greece, though an integral part of the Southern European space and despite its earlier accession to the European Community (hereafter, EC), has only attracted a limited degree of scholarly interest. Our study, based upon primary data obtained through extensive field-work investigation, focuses upon a particular county (eparkhia), Peonia, located in Macedonia, which has enjoyed rapid industrial growth during the last two decades. We set out to explain the causes and processes of this growth, led primarily by the garment industry, and we place this experience within the wider context of Southern Europe. We suggest that in peripheral areas, such as Peonia, sweating work has been an integral, rather than a transitional, feature of flexible specialization. We argue that the rapid growth of small rural enterprises after 1978 was initiated by a restructuring process taking place in the garment industry of the (erstwhile) Federal Republic of Germany (hereafter, FRG). Firms there began to see the advantages of diffusing parts of their production to areas with lower wages outside the country. This trend combined with several characteristics of the local socio-economic structure, particularly the local institutional setting and the labor resources at hand, favored the emergence of manufacturing enterprises in the countryside. This articulation of exogenous forces and endogenous factors produced a pattern of rural industrial growth that shares some attributes with other regions of Southern Europe but also displays several traits specific to it. In order to explore these features in this essay, Section 1 probes the literature on flexible specialization with a view to interpreting recent industrial growth in the countryside of Southern Europe. Section 2 introduces the area studied, and Section 3 considers the structure and growth of the local small enterprises. In Section 4, we discuss the nature of the product market and in Section 5 examine the conduct, performance, and prospects of local enterprises. Then, we offer some conclusions