DAVID GREENE, HOST:
And now to Italy, where more than 70 percent of the country's economic output comes from small enterprises. A big problem is that businesses aren't growing. Economists worry that could derail Italy's efforts to dig out from under its $2.5 trillion debt load. And that brings us to our last word in business, which is how the economy's contractions could be impacted by the contraction of some bellows.
From central Italy, Christopher Livesay explains what I mean.
CHRISTOPHER LIVESAY, BYLINE: In a global economy, even something as small as Italy's accordion industry can have an impact.
(SOUNDBITE OF ACCORDIAN MUSIC)
LIVESAY: The work of its craftsmen has reached millions of ears.
(SOUNDBITE OF SONG, "MARINER'S REVENGE SONG")
LIVESAY: The accordion you hear in that Decemberists song was handmade in the central Italian town of Castelfidardo. Seaside workshops here helped pioneer the modern squeezebox 150 years ago. Today, the likes of Bjork, Calexico and Gogol Bordello come here for what's considered the Ferrari of accordions.
GENUINO BAFFETTI: (Foreign language spoken) (Through translator) It's a very special job. It takes passion to want to make the best accordions.
(SOUNDBITE OF ACCORDION)
LIVESAY: Genuino Baffetti runs the Baffetti accordion company. The air inside his workshop is thick with sawdust and glue. At one end of the shop, a worker is adjusting some out-of-tune reeds.
(SOUNDBITE OF MUSIC)
LIVESAY: Baffetti says the instruments are made pretty much the same as when his father began making accordions 60 years ago. Back then, they were not novelties in popular music. In the U.S., Lawrence Welk had a primetime TV show.
(SOUNDBITE OF "THE LAWRENCE WELK SHOW")
(SOUNDBITE OF APPLAUSE)
(SOUNDBITE OF SONG, "SPRINGTIME POLKA")
LIVESAY: Business was booming in Castelfidardo. The town was home to some 3,000 accordion makers and dominated the global market. But then, something happened.
(SOUNDBITE OF SONG, "GOOD ROCKIN' TONIGHT")
GREENE: Rock n' roll reshaped the accordion market in the 1950s and 60s. Before the electric guitar, the town sold around 200,000 accordions a year. Today, it's just 20,000 - a 90-percent plunge.
LIVESAY: Beniamino Bugiolacchi directs Castelfidardo's accordion museum.
BENIAMINO BUGIOLACCHI: (Foreign language spoken) (Through translator) The Beatles, The Rolling Stones, and Elvis Presley - perhaps for the better - changed musical tastes.
LIVESAY: You can't blame it all on rock and roll, says Michel Martone, Italy's newly appointed deputy labor minister.
MICHEL MARTONE: We need to globalize more, we need to open up our country, we need to face the globalization time.
LIVESAY: Martone points out that the accordion didn't disappear after the 1950s. Many people still play it. But there's been a huge market shift. China now manufactures most of the world's low-cost accordions. The businesses in Castelfidardo that used to make them, they're long gone. What's left are mostly tiny companies who focus on high-end instruments. Some accordions made here go for as much as $50,000.
Small business owners like Genuino Baffetti can make a pretty decent living.
BAFFETTI: (Foreign language spoken) (Through translator) It's been our goal to grow, but slowly, in order to keep quality high. If quality drops, then we've missed the point. Our company makes 180, 200 accordions in one month. If for some reason we got 250 orders, that would be difficult if not impossible to do. So sometimes we turn down requests when business is too good.
LIVESAY: That's great for Baffetti, says Michel Martone, but it's a big problem for the economy as a whole. If small businesses don't do more to grow, then it will be hard for the entire country to compete globally.
MARTONE: We have a problem in Italy. It's the country of many many little things very well done. That's the great of Italy. But that's also our problem. We don't have the big stuff, the big thing you need in a global time. That's the big problem of Castelfidardo. It's not knowing how to do, well, something, it's, the problem is if you're the excellent in something, you have to sell it all over the world.
LIVESAY: That doesn't mean that quality has to suffer, he says. Martone wants niche manufacturers to band together the way Italy's giant fashion industry did decades ago. Once-boutique companies like Prada and Ferragamo, today bring in billions of euros to the Italian economy. But until more small companies do the same, economists worry that things in Castelfidardo - and the rest of Italy - will stay out of tune with the global economy.
For NPR News, I'm Christopher Livesay.
(SOUNDBITE OF MUSIC)
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