ABSTRACT
The inability to elaborate a general approach to policy strategies for the development of small and medium sized enterprises (SME) local systems without historical cultural contexts, e.g. the South of Italy, has been the inevitable consequence of this kind of discussion. The real opening of the debate on small enterprises and local development in Italy can be attributed to the reintroduction of the concept of industrial district. The industrial policy set looked at local SME systems in methodological terms. The systems theory supplies a variety of instruments to explain the evolution of local SME systems, and provides key insights into a variety of questions. The development of Italian SME systems in the post-war period can be seen as a paradigm for the general development process of SME systems. Once the system achieved an important position in the market, its ability to compete in terms of flexibility and price decreased; the mechanisms of the virtuous cycle were blocked.
