(Note 1) The current difficult economic conditions, but more importantly the need to protect their roles in the face of international competition, has led many economic and social players to reconsider their strategies for the future. In this new business perspective, there is consensus on the importance of producing innovative and quality products/services, having high levels of know-how and wide-ranging projects, using first-rate technology and making major investment. However these factors do not combine well with the "dwarfishness" that characterises the industrial panorama of Italy and Veneto.
In Veneto the average size of a firm was a little more than 4 employees, and small firms (Note 2) were 93.7% of the total in 2007, the last year for which data are available. In most cases, the small firms do not have the resources to respond to these new challenges.
Also small- to medium-sized firms, which in Veneto were 6.2% of the total, are very sensitive to containing costs and are not very prone to investment that may not bear fruit where economic payoff is deferred; however they are often 'forced' to invest to cope with the competition from emerging countries. National and Veneto SMEs cannot compete in markets on the basis of cost, therefore to maintain their autonomy they have to focus on "networks", as a form of agglomeration, in order to improve their performance: forming groups, districts, trade associations, consortia, collaboration with research centres, etc.
In reality, in the literature, the definition of a network is quite broad: it is generically defined as "a form of flexible organisation through which the firms in it are able to exchange information, know-how, goods and services in more efficient ways than they can through the market or hierarchically organised firms" (Marchica, 2004).
There are many economists (Note 3) that attribute the basis of the success of Veneto, which began in the 1980s, to "network economics"; this concept goes beyond an administrative-management kind of relationship, and derives from the existence of a community characterised by shared values and by a strong sense of long-standing belonging that accompanies technological progress and globalisation. The foundation of the relationships between the players within the network is trust. The players in the network are, not necessarily in hierarchical order: the final enterprise, suppliers, third-party services, clients, "teams" of employees, service businesses, unions, banks, trade associations, educational institutions, research centres and political actors. To examine further the nexus between economic networks and the local culture, see the anthropological study by Walter (2004) (Note 4); below business agglomeration is dealt with quantitatively from a statistical point of view, so after an analysis of the trend of business through the crisis of 2009, the chapter describes groups of firms in Veneto, through a study of its principal industrial districts, the features of the relations between multi-location businesses and the local labour markets of the region; it concludes with a brief mention of research networks.