Abstract

"Redefining SMEs: Historical and Sectoral Perspectives from Interwar Italy’s Industrial Landscape"

Francesco Romagnoli, Bocconi University (francesco.romagnoli@unibocconi.it)

How does the definition of small and medium-sized enterprises (SMEs) evolve historically and across sectors? This research investigates this question focusing on Italy’s polarized business landscape. By late 1920s, SMEs comprised the vast majority of Italian industrial firms and generated 85% of national income, yet the criteria for defining SMEs have shifted over time. Early classifications focused on workforce size, defining “small” and “medium” enterprises as employing fewer than 1,000 workers, but this limited scope did not capture sector-specific characteristics like labor intensity, energy consumption, and capital investment often central to Italian firms’ distinctions. As Italy’s second industrialization intensified in the 1930s, SMEs classification broadened, with industrial censuses introducing categories from “micro” (under 5 employees) to “huge” (over 1,000).
In this research I question these classification criteria using a novel dataset from the IMI-Intesa Sanpaolo Archives, focusing on loans applications to Istituto Mobiliare Italiano (IMI) between 1936-1943. As Italy’s primary mortgage-backed credit provider during this period, IMI’s loans offer a detailed view into autarky-era financing when SMEs faced severe credit scarcity. My dataset includes both funded and non-funded applicant SMEs, allowing to examine closely IMI’s selective evaluation process and sector-specific dynamics.
Understanding Italy’s SMEs definitions has broader implications for Europe, where small firms dominate many sectors. A uniform SMEs classification, which European institutions apply widely, often fails to account for sectoral differences (e.g., seasonality in workforce recruitment, revenue vs marginality). This study contributes a framework for analyzing SMEs that recognizes these variations and can inform European policies aiming to support SMEs across industries. Through this analysis of Italian SMEs during Italian autarky, I shed new light on the need for adaptive definitions that reflect sectoral and regional distinctiveness, offering insights into more responsive support frameworks for Europe’s long-standing ecosystem of small firm.