ABSTRACT
For several years now the need for increased flexibility in most aspects of industrial production has been one of the central themes in economic debate in the industrialized countries. The network enterprise' has become the ideal model of the competitive firm. This has resulted in the process of disintegration of large vertical firms and their transformation into global business networks (Castells, 1996). As a part of the debate, small firms have attracted the attention of governments' economic policy. It has been claimed that these developments give small enterprises a new competitive edge in the world economy. Piore and Sabel (1984) for example, have argued that the rise of new production models takes small enterprises and their co-operation to the centre of the flexible economy. At the same time flexible co-operation of small firms would make sustainable business activities possible in previously non-industrialized rural areas.
