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Abstract After World War II, Prato (in Italy) became known for the extraordinary development of its textile industry. The development was extraordinary due to its size and because it was based on small firms, the study of which contributed to the rediscovery of the Marshallian industrial district. In recent decades Prato has become increasingly known for the rise of the largest agglomeration in Italy of Chinese immigrants’ businesses specialised in fast fashion clothing.

• Laura Zanfrini

Despite the attention devoted to this phenomenon, how and why the Chinese in Prato were so successful remains somewhat of a mystery. This paper explores the case of the Chinese in Prato, considering first their influx into the district as subcontractors and then their transformation into final producers of pronto moda. The paper focuses on the causes of these immigrants’ exceptional development and on the possible consequences of this evolution for the future of Prato in the new global economy. Introduction The number of firms set up by immigrants in the developed countries has increased greatly in recent years, partly as a consequence of the economic, social, technological and political-institutional changes that have come about in the past two or three decades. This phenomenon has extended to Italy within a relatively short space of time if one considers that by the end of 2011 no fewer than 440,000 foreigners owned or had a partnership in a firm in Italy. These firms represented almost 10% of the total number of firms registered at Italian chambers of Commerce (, p. In Italy, as elsewhere, firms run by immigrants are not uniformly distributed either throughout the national territory or within the various business sectors.

From the territorial point of view they are concentrated in the major urban areas, and also in the manufacturing areas, especially if the latter are characterised by agglomerations of small and medium-sized enterprises, as typically occurs in the case of industrial districts. While in the urban areas such as Rome and Milan firms run by foreigners are engaged above all in tertiary activities with a high intensity of unskilled labour, the situation is rather different in the industrial districts, where the firms run by immigrants generally act as subcontractors in the specialisation sector of the district in question. Among the immigrant-run firms operating in the Italian industrial districts, those set up by Chinese immigrants are particularly widespread. In contrast to immigrants of other nationalities, many of the Chinese immigrants who arrived in Italy between the early 1990s and the beginning of the third millennium set up workshops in the light industrial sectors typical of the Italian districts. The district of Prato is perhaps the best known of the Italian districts, partly because it was long the primary focus of an extended case study by Giacomo Becattini (and his colleagues), the scholar who was the driving force behind the rediscovery and development of the concept of the industrial district and who based his analysis on in-depth research concerning Prato.

But Prato is also well known on account of the importance of its textile industry in the Italian and international context. In more recent times, however, Prato has attracted the attention of observers and media reporters not so much due to its textile industry, but because of the multiplication of clothing firms set up by Chinese immigrants. Indeed in Prato the number of firms established by Chinese immigrants is not on the order of a few hundred at most, as is the case in other Italian fashion districts (, pp. 111–16), but rather no less than 5,000. Thus Prato is the Italian province that has by far the greatest proportion of foreign firms (23%) out of the total of registered firms (, p. Despite the increasing attention of public opinion, and to some extent also of scholars, towards this exceptional development of Chinese enterprises (; ), it still remains a poorly understood phenomenon and is sometimes even accused of being responsible for the crisis of the Prato textile district.

Consequently, the main aim of this research was to gain insight into ‘the Chinese enigma’ (, p. 164) of Prato. In addition to the knowledge I have personally acquired with regard to the Prato district over time (, ), I also made use of a wide range of published research papers on the Chinese in Prato as well as some administrative documents I was able to consult. Furthermore, for information pertaining to the quantitative evolution of Chinese immigration into Prato I utilised above all the population data available at the municipal offices with regard to the population and the data of the Chamber of Commerce with regard to Chinese-run firms. However, I was aware that the quantitative data would not, on their own, be sufficient; not so much because of unregistered enterprises and clandestine labour, but rather because the data provide no information on relations between the firms run by members of the local population of Prato and those run by Chinese immigrants.

Nor do the data give any indication on social and economic relations among the immigrants themselves. Therefore an essential aspect of the research was based on 24 in-depth interviews carried out with key informants (nine of who were Chinese) over a period of time extending from October 2009 to July 2011. To analyse the body of data, I explored the rich literature on immigrants’ entrepreneurial activity in order to identify a theoretical approach that would be appropriate for the case study in question.

With regard to the first phase of Chinese immigration into Prato and the multiplication of subcontracting firms set up by these immigrants in the 1990s, I made use of the so-called interactive model. This model shows that the factors underlying immigrant entrepreneurship are of two types: on the one hand, the specific structure of the opportunities encountered by the immigrants upon their entry into the host country (demand-side factors); and, on the other, the socio-cultural characteristics of the immigrant community, which are crucial in influencing the resources that will enable the immigrants to establish their entrepreneurial undertakings (supply-side factors). Interaction between the overall set of demand factors and supply factors can provide insight into the rise of firms set up by immigrants. I also derived further insight from the helpful additional developments of the interactive model put forward recently in what has been termed the ‘mixed embeddedness’ approach (;; ). With regard to the second phase of immigration, when, from the beginning of the twenty-first century onwards, a growing number of Chinese firms underwent a transition from the status as subcontractors to that of pronto moda final firms, none of the theoretical frameworks I found in the literature on immigrant entrepreneurs appeared to be capable, taken on its own, to provide a satisfactory account of the case under study.

Laura Zanfrini

Thus, somewhat hesitantly but encouraged by the suggestions put forward in, pp. 669–70), who proposed that the framework adopted for the study of immigrant entrepreneurship could be broadened to include other analytical traditions, I turned to the industrial district. In effect, the transformation of some of these immigrants from subcontractors into independent pronto moda producers and the ensuing territorial and sectoral concentration of Chinese firms and immigrants that has taken shape in Prato, have brought about an integrated and dynamic organisation of production, very strongly reminiscent of the industrial district: ‘social forces co-operate with economic’ (, book IV, chapter 10 paragraph 9). Several striking similarities between the productive system set in motion by the Chinese immigrants in Prato and the industrial district can indeed be singled out.

For example, one finds that in a bounded area there is the active presence of both a community of people and a numerous population of specialised small firms that tend to merge with one another ( p. Furthermore, similarly to the industrial district, there is a division of labour among firms that mainly all belong to the same sector and economic growth comes about through an increase in the number of firms; this means that growth comes about in the size of the system built up by these small firms rather than in the size of the individual firms themselves (, pp. It is also interesting to note that the division of labour among the firms becomes integrated by virtue of the localised intensification and intertwining or ‘thickening’ of the economic and social relations among the individuals operating in these firms. Competition is one of the major features of such relations: entry barriers are low and these immigrants are motivated by a strong aspiration to become self-employed, with the result that for every specialised activity there are a number of enterprises competing with one another. Yet at the same time the relations also involve reciprocal cooperation because the subjects are conscious of belonging to the same social group, sharing its values, aspirations and modes of behaviour (,;, ). They are also aware of all forming part of the same productive system.

This awareness is further reinforced by the economic growth springing from the multiplication of interdependent firms and by the institutional development that typically goes hand in hand with this type of organisation. It is a situation that tends, on the one hand, to favour the reproduction of entrepreneurial energy and competition while, on the other, it also enhances solidarity and integration. Finally, again as in the industrial district, these small firms, interlinked and integrated by the ‘thickening’ of their relations of competition but also cooperation, can enjoy the advantages—in the form of external economies—of large and varied production (economies of scale and scope) and low information, learning and transaction costs (;; ). To conclude this brief introductory overview of the subject matter of this paper, I would however like to point out that several distinctions can be drawn between the case of the Chinese in Prato and the experience of industrial districts that was a feature of industrial development in previous decades in the regions of the north-east and centre of Italy. It was this earlier type of industrialisation that constituted the empirical basis for the rediscovery of the concept of the industrial district, but in at least one crucial aspect it differed sharply from the type of industrial district shaped by the immigrant Chinese community in Prato.

The Chinese model has a distinguishing feature that sets it apart from the previous experiences: by virtue of the density of social and economic relations with family members and friends who have remained in mainland China or have emigrated to other countries, and based also on the advantage of modern technology and globalisation, the local productive system of the Chinese business community in Prato has a transnational extension. The paper is organised as follows: in the next two sections, first I outline the arrival of the Chinese immigrants in the textile district of Prato and the multiplication of their subcontracting workshops during the final decade of the twentieth century, then I consider the development of the Chinese fast fashion productive system in the first decade of the new century. In Section 4 I analyse the causes of the economic success of the Chinese in Prato. On the basis of the analysis carried out in the paper, the challenges and opportunities for the future of Prato are discussed in the final section. Number of active firms run by Chinese immigrants in the Province of Prato in clothing and in all sectors: 1992–2010.

Thus throughout the 1990s, the incorporation of Chinese immigrants into the district of Prato proceeded smoothly and was largely similar to the course of events in other Italian industrial districts. The socio-cultural features specific to this group of migrants (aspiration of self-employment, importance of family ties and solidarity between fellow countrymen) were matched by opportunities that arose in the host economy. This encouraged the process of business formation and the related migration chains. Nonetheless there were some differences compared with the situation in other Italian industrial districts, foreshadowing later developments.

A first difference involves the time and the size of the migratory phenomenon: Chinese immigration into Prato began at the end of the 1980s, a decade earlier than in other Italian districts and grew during the industrial recovery of the 1990s. Hence the agglomeration of Chinese firms that formed in the Prato area was notably larger than that formed in other districts (, pp.

Another difference concerns the fact that in Prato the Chinese did not enter into the main local industry (textiles) but into a secondary sector (knitwear), which at that time was experiencing a shortage of homeworkers. In addition the Chinese favoured the introduction of a new mode of organising production called pronto moda or fast fashion, which did not exist (in Prato) before they arrived; this novelty fostered the growth of clothing, a sector that had been relatively overlooked by local entrepreneurs. The rise of a Chinese fast fashion productive system in Prato in the first decade of the twenty-first century Prior to the arrival of the Chinese immigrants, Prato knitwear firms and the few existing clothing firms worked according to the so-called ‘programmed’ schedule, i.e.

The planning and design of new product collections began several months before their production and sale. From the second half of the 1980s onwards, the growing variability and differentiation of the demand for clothing (in knitwear and textiles), especially in women’s wear, led retailers and wholesalers to require from producers increasingly smaller batches and quicker deliveries.

This shift in consumer tastes and the reaction of retailers and distributors led to a progressive shortening of the time lag between design and sales, until the advent of the so-called pronto moda or fast fashion. Pronto moda is a method of organising production in which the times for design, prototyping, manufacturing and sales are so tight that they actually tend to overlap. The pronto moda productive system developed in Prato in the 1990s together with the arrival of the Chinese and the multiplication of their workshops, in which work was conducted round the clock, first in knitwear and then increasingly in clothing. Therefore by the end of the 1990s, Prato had the largest agglomeration of Chinese firms (87% of which in clothing) and the largest community of Chinese immigrants in any Italian industrial district (and the second largest in Italy after Milan), the majority of who came from Wenzhou. Some of these immigrants had been in Italy for over a decade and had lived in Prato for a number of years, where they had been working as subcontractors for pronto moda firms that were mainly local but also, in some cases, from other Italian regions. During these years they acquired experience and skills related to the various phases of clothing production and some of them also established relations that allowed them to start up direct contacts with retailers and distributors (, p.

These immigrant entrepreneurs, thanks to their migratory seniority, not only acquired a position of leadership among the Chinese community in Prato, but also established relations with sections of the Prato business community. The skills and relationships acquired by working as subcontractors in the district of Prato, combined with the resources (labour and capital) deriving from ties with family members and fellow countrymen, allowed some Prato Chinese entrepreneurs to make the business leap of transforming themselves from subcontractors to independent producers of pronto moda. This was an important advance in the development of Chinese business in Prato, because direct access to the market allowed considerably higher earnings than those obtainable as a subcontractor, in particular when, as in the case considered, the latter was at a disadvantage with respect to the Italian contractor. Moreover, the functional upgrading of some Chinese entrepreneurs increased the chances for other fellow countrymen to become self-employed, which is ultimately the goal of these migrants. Thus between the end of the 1990s and the start of the new century, the first Chinese ‘final firms’ were set up in Prato, specialised in the designing of models and the marketing of pronto moda garments. Within a short time, following in the footsteps of the pioneers who transformed themselves successfully from subcontractors to independent producers (an imitation process typical of environments where there is a high circulation of knowledge) other Chinese immigrants, mature in the experience needed to bring about an analogous business leap forward, began to set up final firms and entrust actual production to co-ethnic subcontractors. Such a transformation by numerous Chinese entrepreneurs in Prato significantly changed the development opportunities both for the subjects who brought about this transformation and for the community of immigrants of which they formed a part.

In the years following this transformation among the Chinese in Prato, there was a veritable explosion in business start-ups led by the boom in fast fashion: in a decade the number of Chinese enterprises in the Province of Prato rose from about 1,500 to almost 5,000. Clearly, the establishment of Chinese final firms favoured the setting up of subcontracting workshops run by family members and other fellow countrymen. However it was not only in clothing that the setting up of Chinese pronto moda final firms resulted in a multiplication of Chinese enterprises (final and subcontracting): the economic and demographic development heralded by that transformation paved the way for the emergence of firms in other sectors. On the one hand, the growing number of Chinese immigrants, attracted to Prato by the possibility of finding work and eventually becoming self-employed, generated a demand for consumer goods and services that opened up new business opportunities in the retail trade as well as in catering, personal services, transport and telecommunications.

And on the other, the boom in Chinese pronto moda produced also a demand for auxiliary businesses both of a manufacturing kind (such as dying or printing clothing) and of a service kind (such as professional and commercial services), in particular wholesale trade and import/export of textiles and clothing. Thus shortly following the start up of the first pronto moda final firms, Chinese wholesale and import/export businesses multiplied fast, as shown in. This further transformation of Chinese entrepreneurs was enhanced by their relationships with relatives and friends who had stayed in China, providing reliable sources for the purchase or manufacture of goods for which there was a demand in Italy and Europe. At the same time, however, their relationships with other co-national immigrants who had already become pronto moda producers, and with Italian and European entrepreneurs and wholesale merchants generally, facilitated the finding of buyers of imported goods.

In this way their dual relations in both places of origin and immigration, favoured by new means of communication, allowed a number of these immigrants to become transnational entrepreneurs. The creation of Chinese pronto moda final firms brought about a change in the organisation of these immigrants’ productive system in Prato. The division of labour between firms developed considerably, inasmuch as the Chinese final firms began to subcontract production to workshops run by relatives or fellow countrymen.

Moreover, they used co-ethnic firms also as wholesalers, importers, accountants, dyers, transporters or estate agents, as soon as Chinese businesses emerged in those sectors. Every final firm would subcontract the production to several co-ethnic workshops. Often the contractors started to make use of other trusted subcontractors specialising in the various phases of the garment production process, from cutting to sewing and from finishing to ironing. All of these businesses were mainly found close to the ordering firm because the turnaround times for fast fashion are so tight that delivery takes place between 24 and 48 hours from the order being placed (Prato Police Office, internal document, 2009). Such a production organisation based on the subdivision of labour between closely interconnected firms is generally characterised by a territorial agglomeration of enterprises. Consequently, for the Chinese immigrants their domicile and operations are concentrated in the area where they started to set up their sewing workshops in the early 1990s. Thus, the old Prato ‘factory town’ has become transformed into the new Chinatown of Prato where more than 70% of the buildings are occupied by Chinese immigrants (Prato Police Office, internal document, 2009).

This massive Chinese presence has changed the character of the area to such an extent as to render it foreign to long-term residents. Here shops trade in goods and services typical of these immigrants’ traditions, and a lifestyle and work ethic true to their place of origin is replicated. However, the ex-’factory town’ is not the only area in Prato in which the activities of Chinese immigrants are concentrated. Once the business leap from subcontractors to pronto moda final firms has been accomplished, Chinese enterprises abandon the cramped and often dilapidated quarters in the area of Via Pistoiese to move to more modern and viable premises in custom-built industrial areas provided by the Municipality of Prato in previous decades for textile companies (the so-called ‘macrolotti’ macroplots 1 and 2 and the Quadrilateral of Iolo), which are more suited to commercial activities of final firms and wholesale importers. The territorial concentration of family firms in which employers and employees come mainly from the same region, if not from the same village, and share the same culture, together with the division of labour among enterprises, reinforces the links among these immigrants and therefore their sense of belonging to the same social and economic system.

This is because the division of labour among firms has two effects. First, it increases the localised strengthening of economic and social ties necessary to coordinate the various activities carried out by different businesses but related to the same productive chain. Second, the continual rise of new specialised firms, which thus opens up opportunities to would-be entrepreneurs, enhances both the aspiration to self-employment and the solidarity among the members of this group. In addition to the reinforcing and multiplication of relations among Chinese immigrants promoted by the production organisation described above, the economic and demographic growth of these immigrants has also engendered the building of social institutions. First, Chinese associations have developed, the most important of which is the one that recruits entrepreneurs from Wenzhou, but there are also others, such as the association of immigrants from Fujian or the general association of Italy–China Commerce, which gathers together entrepreneurs from Zhejiang.

As they are associations of entrepreneurs, an important part of their activity concerns the promotion of business, although increasingly these associations also function as institutions connecting Overseas Chinese with political and economic authorities in their place of origin. Such associations furthermore engage in activities of general interest for the community, for example running schools for the children of Chinese immigrants and for the teaching of the Italian and Chinese languages. And as well as associations of business people, religious associations have also been established. Besides the community of Catholic Chinese set up following the first arrivals in Prato, the Buddhist association has been formed as well as a community of Chinese evangelical Christians. Briefly, the boom of pronto moda firms has not only generated quantitative growth in the Chinese community of Prato, it has also produced a qualitative change in its organisation, reinforcing economic and social interlinking and institutional density within the Chinese community and enhancing its relations with the place of origin. In contrast to the initial stages of the early 1990s, by the start of the new century the Chinese immigrants in Prato made up a fairly large economic, social and demographic presence.

Their number had increased considerably and their concentration in some parts of the city had so fundamentally transformed these areas that they became alien to the population who had always lived there. The interviews, recorded and transcribed, included interviews with six Chinese pronto moda entrepreneurs. The concept of the industrial district, derived from the writings of Alfred, was rediscovered by Giacomo and subsequently further developed by Becattini himself and by other Italian scholars in order to provide an explanatory account of the so-called Third Italy. This term referred to a form of industrial development characterised by territorial and sectoral concentrations of specialised small and medium-sized firms. Among the contributions on the concept of the industrial district by Italian scholars that have been published in English, see, and, ). The massive rise of immigrants is to be attributed, at least partly, also to the ‘indemnity’ policy adopted by the Italian government, which attracted to Italy the clandestine population present in other European countries. In the year following the 1998 indemnity, the number of permits to stay issued to Chinese immigrants by the Police Headquarters of Prato reached 7,900, while the number of Chinese who registered as a result of the subsequent indemnity of 2002 was such that the Chinese consular authorities, without asking for authorisation from the municipal offices, opened an office in Prato on the premises of a Chinese association (, pp.

In particular, the town government authorities, understanding the relevance and the complexity of this new flow of immigration, set up, as from 1994, a Research Centre for Immigration at the Social Policy Office, directed by university scholars specialised in the Chinese language and culture, flanked by cultural mediators and consultants, with the aim of studying the phenomenon in addition to offering services to immigrants. On immigration policy in Prato in the 1990s see. On the centre’s research activity see, ) and. From a study by a researcher of the Prato Research Centre for Immigration, matching municipal data on resident Chinese families with Chamber of Commerce data on Chinese enterprises in Prato for the years 1996–97 showed that in 70% of Chinese families with five members or more, at least one member of the family owned a business (, p. Moreover, in a recent inquiry on 75 Chinese entrepreneurs in Prato, when asked ‘Why did you come to Prato?’, 33 of the respondents stated ‘Because of the possibility of becoming entrepreneur’ (, p. In the new century, migrants coming from Chinese provinces different from Zhejiang or in part Fujian who had originated the pronto moda system arrived in Prato.

Coming from provinces in north-east China, particularly from Liaoning, these new immigrants have a different background, expectations and no personal ties in Prato, where they are employed as low-skilled workers in Chinese workshops with no chance of upward mobility (, pp. However, of the 15,029 Chinese residents in the Municipality of Prato at the end of 2012, omitting 4,118 people born in Italy, of the remaining residents 90% were born in Zhejiang (Statistics Office, Municipality of Prato, 31 December 2012). Local newspapers usually report only negative events involving Chinese immigrants, such as criminal behaviour or illegality. In particular, in recent years attention has focused on illegality in Chinese businesses such as the use of clandestine workers, tax evasion, the violation of regulations on employment relations, safety at work, pollution or the sending back to China of large amounts of money. For an analysis of media reports and Chinese immigration in Prato see.

Sometimes the local press even blames Chinese immigrants for the decline of the textile industry in Prato, even if they are specialised in a different sector (see, e.g., 6 November 2010. According to the estimates of the ISMU (Initiatives and Studies of Multiethnics) foundation of Milan in 2005 the irregular Chinese immigrants present in Italy were 11.4% of the total (corresponding to about 19,300 persons), but in the same year irregular immigrants coming from the Ukraine were 22.4% (corresponding to 40,300 persons) and those from Morocco were 14.2% (corresponding to almost 57,000 irregular immigrants) (, pp. On irregular immigration in Italy, see the European Migration Network (2005, p.

In the research on Chinese entrepreneurs conducted by the Prato Chamber of Commerce one reads: ‘extension of family networks corresponds often with an extension of the business activities taken forward with various companies by various members of the family. About two thirds of those interviewed stated that there are other business people in their family, who run one or more companies and, at times, even the same business people have direct interest in more than one company’ (, p.

From another inquiry into Chinese firms in Prato there emerges the fact that ‘about two thirds of the entrepreneurs interviewed have other family members who are business people in the same sector (clothing), and a significant quota presenting a considerably extended network of family members operating in Prato’ (, p. Examining the relationship between entrepreneurs and workers in the Chinese enterprises of Prato, Ceccagno writes: ‘With the passing of time it becomes evident how the Chinese productive niche is also the result of a vision shared among entrepreneurs and workers, a vision which implies exploitation and self-exploitation, but which also includes implicit and negotiated agreements and is perceived as favourable for both.

In fact both entrepreneurs and workers perceive this organisation of labour as being the best and fastest path towards economic success. The workers are willing to work long hours not only because they often can’t act differently or because the market requires it, but also because they aspire to become entrepreneurs themselves. Therefore they perceive the exploitation and self-exploitation as the quickest way available to them to achieve their own goal (even if in reality not everybody can become self-employed) Therefore a partial and untrue reading of the phenomenon is risked if only the paternalistic relationship is perceived as well as that of exploitation and dependence between the employers and the workers, without noting the mutual interest pact that binds them (for a period of time that they perceive limited to just some years)’ (, pp. 87–8, emphasis added).