On the eastern coast of central Italy, the green hills ambling toward the sea are dotted with perfect towns such as Sant'Elpidio a Mare and Montegranaro near the Chienti River. The region, known as Le Marche, is home to some of the finest Romanesque architecture in Italy, untouched by the cultural revolution of the Renaissance. The same cannot be said of the industrial revolution. Nestling among hills covered with olive groves and fruit orchards in an area of Le Marche that covers barely 50 sq km are more than 2,700 small factories dedicated to the art of shoemaking that supply shoes for brands like Prada, Gucci, Pierre Cardin, Calvin Klein, Versace, Roberto Cavalli and Claude Montana, to name just a few. In Sant'Elpidio there is even a Museum of the Shoe. Since the Middle Ages families have worked leather in the area's tanneries, using it for everything from furniture upholstery to the first leather-lined motor carriage, crafted in the early 1900s for the King of Italy. Since the 1970s shoes have been the mainstay of the region's economy. "I've been kneeling in front of my clients for 30 years," says master shoemaker Silvano Lattanzi, whose shoes are a favorite of Arnold Schwarzenegger. In the 1960s and 1970s, homespun values of frugality, hard work and risk taking helped transform the area from an agrarian to an entrepreneurial society. There's a firm for every eight inhabitants; only 7% of the population is involved in agriculture (down from 61% in 1951), and more than 43% work in shoemaking. Last year, the region exported 1.5 billion euros' worth of shoes. Best of all, the Le Marche companies have been able to weather various economic crises since the postwar boom because of their innovation and capacity to adapt to different fashions. "The majority of businesses are small and medium firms with less than 12 employees, so they are extremely flexible," says Silvio Pascali of the Ascoli Piceno Chamber of Commerce.

The towns of Montegranaro and Civitanova Marche specialize in men's shoes; Sant'Elpidio a Mare and Porto Sant'Elpidio concentrate on women's; most of Monte Urano's production is devoted to children's shoes. Many of the small firms specialize in a specific phase of production: uppers, heels or soles. Together these factories produce everything from Roberto Cavalli's sexy stilettos to Geox "breathable" baby shoes. This is also where Ferrari gets its leather upholstery and where furniture-design company Poltrona Frau makes its sumptuous leather couches.

One local legend is Diego Della Valle, the founder of Tod's, whose iconic, stud-sole driving shoes are worn by everyone from Princess Caroline of Monaco to Milanese matrons. His grandfather was a cobbler, and his father built the business into a shoe factory. In 1979 Della Valle launched a sideline called J.P. Tod's, later shortened to Tod's. Now he has a high-tech design headquarters in Casette D'Ete and seven shoe factories. The designers who use Le Marche factories export around the world, and while their customers are primarily in the West, their factories are looking East to cheaper labor in Asia and the former communist bloc. Some companies have moved operations out of the region, but many more firms are outsourcing parts of the shoemaking process to Eastern Europe so that the Le Marche factories stay competitive. But even though exports fell by 15% in 2002-03, shoemaker Lattanzi thinks that customers will always be willing to pay a premium for the traditional handcraftsmanship of a Marchigiano product that will last a lifetime. "I have 29 artisans working on only 25 pieces a day," he says. "The Americans and Japanese want my factory to go on forever so they can have shoes for their children and grandchildren." All around Le Marche, the 27,000 people who work in the shoe industry are hoping he's right.