How can small- and medium-sized enterprises (SMEs) successfully evolve? Lessons learned from Apparel and Textiles SMEs in Biella

Approximately, 95% of apparel and textile firms in the US are small- and medium-sized enterprises (SMEs). SMEs contribution to a nation’s economy is significant as they account for a majority of firms and create more jobs than larger firms. Nonetheless, survival rate of SMEs is considerably low. In the US, about 50% of SMEs survive five years and only about one third survive 10 years or more (U. S. Bureau of Labor Statistics, n.d.). In contrast, Italy has one of the highest survival rates for newly born enterprises in the world – 86% survive their first year (Eurostat, 2014). Compared to SMEs in other countries, many Italian firms started as small family businesses in a district and have evolved into a global firm such as Ermenegildo Zegna. To understand how SMEs can evolve successfully, it is critical to learn from successful Italian apparel/textile firms that started as SMEs. Built on the life cycle model of new SMEs (Kazanjian, 1988), the purpose of this study is to explore the evolution patterns of successful apparel and textile firms in Biella, Italy and analyze the characteristics of successful firms.