Abstract
A region or a city, with local specific resources that are untapped or badly employed, would have potential for development if interaction between agents and institutions were able to bring about appropriate intentional actions. This condition is very hard to fulfill. Even if some actors are oriented towards change, they must exit the circular causation mechanism, where everybody waits for someone else to make the first move. In this chapter we will see a simple representation of the trap. The experience of change can be considered as a condition for changing routines at the level of individual private actors and changing narratives at the level of interaction between actors and institutions. We can therefore simplify by describing persistence and change in the allocation of resources as dependent on decisions of firms that are affected by the experience of other firms. We will also discuss two obvious but ineffective ways of getting out of it: the “big push” and the drop of wages.
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United States, Japan, Australia, Ireland, Switzerland, United Kingdom, Iceland, New Zealand, Spain, Portugal, Luxembourg, Canada, Greece, Germany, Norway, Netherlands, Italy, Belgium, France, Austria, Finland, Denmark, Sweden.
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Including raw material costs, labor costs, depreciation, and a normal remuneration of capital.
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Reuters in Rome; theguardian.com, Monday 2 December 2013. «While textile was losing weight, clothing made by the Chinese exploded to the point that in a few years in Prato was born a true ethnic industrial district for clothes low cost, unique in Europe, consisting of 4 thousand Chinese companies employing at least 30 thousand compatriots (including illegal), capable of sewing nearly one million item per day. The system covers all phases except the production of the fabric, bought in China at low prices». Silvia Pieraccini—Il Sole 24 Ore—10 August 2012.
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Sonia Montrella, “Agichina 24”, 14 December 2013.
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Silvia Pieraccini, cit.
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«A revival of development would require profound changes which can no longer exclusively and primarily rely on familiar experience, behavioral models, the division of labor, and the integration and innovation that were typical of the former equilibrium. Instead, it requires the conscious construction of a new equilibrium through a deliberate individual and collective action capable of introducing into the economy and into the society substantial innovations consonant with both the local resources which can be activated and with new opportunities of the changed global and local context» (Dei Ottati 2009, 29).
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«Shirts 3 €, jeans 7.50 (but negotiable), leggings 2.5, dresses long and light between 6 and 7» (Laura Montanari, La Repubblica Firenze.it, 15/12/2013).
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Two billion euro divided by 40,000 workers divided by 350 days per year, gives 214 €. One million items multiplied by 8 € divided by 40,000 gives 200 €.
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Seravalli, G. (2015). Under Valorized Areas. In: An Introduction to Place-Based Development Economics and Policy. Springer, Cham. https://doi.org/10.1007/978-3-319-15377-3_4
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