A significant part of this vast network of small and medium-sized enterprises is located in industrial districts, which taken together account for 41 per cent of industrial employment and 45 per cent of employment in manufacturing. For the most part, district firms are export-oriented.
The organizational model of the districts, which combine cooperation with competition, overcomes some of the limits of small size and permits high levels of innovation and efficiency. This is the Italian economic engine that in decades past created wealth and jobs. However, the steady loss of competitiveness and the weakness of domestic demand are threatening the growth prospects of an increasing number of firms.