Abstract

One of the causes of regional inequalities is that in backward areas there are constraints to the expansion of local firms. High level of uncertainty within the local trading environment and a restricted supply of organization and managerial skills increase coordination costs. As a consequence cost curves begin to increase much earlier than in more industrialized areas. The higher cost of capital and a smaller local market are other factors that reduce the rate of growth of local firms. All these aspects characterize the economy of the South Italy. However during the last ten years some local firms and some branches of external firms showed an high rate of growth and reached considerable sizes. In our paper we analyse a sample of three ICT firms that have experienced a very high growth rate during the past ten years. The three firms belonging to the following ICT sectors, software, telecommunications, and semiconductors. The aim of the paper is to evaluate what share of such growth has been caused by external factors and what share by internal factors. It has been found that internal factors and mainly the ability of the entrepreneur or of the managerial team were responsible for most of the growth. Among the external factors taken in considerations financial incentives were important only for the Southern branch of the external firm. The availability of human capital and the low turnover of such skilled workforce were also mentioned to have contributed to such growth. On the other hand the role of Southern Italy Universities and the one of Italian Public administration were not considered important.