Fourth capitalism

Information on intermediate size companies

R&S and the Research Department of Mediobanca have for many years put a great deal of effort into analysing companies which form part of what is sometimes referred to as the "fourth capitalism", i.e. companies of intermediate size which are such a feature of the Italian economic system.

The attention devoted to these companies is well-documented in the publications issued both by R&S (especially its Annual Directory, each new edition of which usually includes profiles of new groups, of medium size, which have achieved significant critical mass in terms of capitalization and workforce) and the Mediobanca Research Department (Leading Italian Companies and Financial Aggregates for Italian Companies, both works which devote ample space to medium-size companies). Companies forming part of the fourth capitalism were also the focus of the research that led to development of the R&S-Unioncamere scoring model for small and medium-size companies.

In 2000 the Mediobanca Research Department entered into an agreement with the Research Department of Unioncamere to prepare an annual survey of the universe of industrial medium-size companies. The first edition was published in 2001, and statistics regarding earnings and financial data for such companies were compiled starting from 1996. This survey enabled significant material to be published from testimonies given by academics and businessmen participating in the various conferences organized to present the annual survey editions. A similar survey on European medium-sized companies is currently being launched in conjunction with Confindustria and Unioncamere.

In 2006 Mediobanca instituted a prize to be awarded to medium-size companies that stand out in terms of their high growth rates, profitability, governance arrangements, internal organization, innovation, and market leadership. Profiles of the successful companies are published on this site.

A co-operation began with the Fondazione Istud in 2009 to identify corporate development models and success strategies for the firms of the fourth capitalism.


F.A.Q. - Frequently Asked Questions

What does the term "fourth capitalism" mean?

The fourth capitalism refers to companies of intermediate size, i.e. neither large nor small, which are generally distinguished by having an international presence and in part at least have links to local production systems.

Have any publications been issued on the fourth capitalism?

The term "fourth capitalism" was coined by Giuseppe Turani in the mid-1990s in his book entitled "I sogni del grande Nord" (Bologna: Il Mulino, 1996). Turani identified medium-sized companies as the main protagonists in this new form of capitalism, describing them as "pocket-sized multinationals". In the same period, the Mediobanca and Unioncamere research departments began to investigate the universe of medium-sized manufacturing enterprises; the first survey, which was limited to north-east Italy, was published in 2000, and was extended to comprise the whole country in the years that followed. In 2002 Andrea Colli analysed medium/large firms from a historical perspective. Colli's research, published in his "Il quarto capitalismo" (Venice: Marsilio, 2002) was based in part on information taken from data published by Mediobanca. The term “fourth capitalism” was then taken up again in 2006 by the Mediobanca Research Department to identify the fields for data to be recorded for use in the "Laboratory for the competitiveness of companies" established in conjunction with Confindustria's European Committee dedicated to the set of medium-sized and medium-large companies.

What are the limits of the fourth capitalism?

The fourth capitalism comprises the intermediate bracket in terms of company size, between small businesses and large groups. Traditionally it encompasses both medium-sized companies (which according to the Mediobanca-Unioncamere definition are joint stock companies with a workforce of between 50 and 499 staff and a turnover of between €15m and €330m, and the first bracket of large scale enterprise (companies with more than 499 staff and turnover of below €3bn). These are not absolute limits, but they may be taken as a basis for ensuring rigour in terms of empirical research carried out on this group of companies.

Who are the main protagonists of the fourth capitalism?

The most important companies are regularly covered by the Research Department of Mediobanca, which publishes data on individual companies in its Leading Italian Companies publication and on aggregates in Financial Aggregates for Italian Companies. Details on medium-size companies (e.g. concentrations in districts and local production systems) may also be found in the annual Mediobanca-Unioncamere surveys of medium-sized businesses.

Is the fourth capitalism a residual phenomenon?

No. Taken together, the companies that go to make up the fourth capitalism derive from the gradual transformation of Italian industry driven by global competition and declining performances by the largest Italian industrial groups. The origins of the phenomenon may be traced to the 1970s, and the key end-markets for it are European countries, largely those in the Eurozone, and more recently Eastern European countries. The companies of the fourth capitalism tend to produce in facilities located in Italy (chiefly in North-East, Central and North-West Italy), and are distinguished by their quality, and those of intermediate size in particular for their customer service.

Is it fair to describe the fourth capitalism as an Italian miracle?

No. Miracles are defined as extraordinary phenomena which cannot be explained on the basis of existing knowledge. The emergence and structure of the fourth capitalism is entirely ordinary as a phenomenon, and functions according to well-known laws.

Is the fourth capitalism a niche phenomenon?

The commercial model of the companies should not be confused with the relevance of the phenomenon itself. The companies of the fourth capitalism tend to specialize in terms of individual products, which are placed in market niches deliberately created in order to defend positions against both manufacturers in low-cost countries and large-size multinationals, which are able to leverage on economies of scale and relocated production facilities. An approximate valuation of the phenomenon, based on the individual companies, would come to roughly a quarter of national Italian manufacturing production, or 1.7x the contribution of the largest Italian-controlled groups; this rises to just under 40% if affiliated industries are also included. As is well known, the manufacturing segment is chiefly comprised of companies that are small in size (around half a million in 2005), mostly organized into local production systems and clusters - partly attributable to the "filières" of the fourth capitalism companies themselves - which generate by far the largest share of Italy's foreign trade surplus.

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