Local Economies and Internationalization in ItalyUniversity of Bologna, 20 November 2003

The papers presented here mark the completion of a research project launched two years earlier and sponsored by Banca d’Italia and the Statistics Department of the University of Bologna. The project shed some light on the very particular structure of the Italian economy.

In its distribution of firms by size, its sectoral specialisation and its technological level, the structure of the Italian economy contrasts sharply with that of the economies with which it is ordinarily compared. On this score very little has changed over the years; indeed, from a relative point of view Italian industry’s distinctive sectoral and size characteristics have grown even more pronounced.

Investigators of local systems of small enterprises have shown that these are not necessarily technologically backward, but it remains true that the sectoral specialisation of the Italian economy, and more specifically of Italian industry, is such that the more advanced sectors are significantly under-represented.

The question, then, is whether this structure causes sub-optimal resource allocation or imposes constraints on growth.

Sub-optimality and constraints could be due to two main causes: the prevalence of small firms could limit the exploitation of static and dynamic technical economies of scale, while the low incidence of sectors with higher growth potential, together with the high incidence of ‘traditional’ sectors that are labour-intensive (and thus potentially exposed to competition from the emerging countries) could limit the growth potential of the system as a whole owing to a composition effect.


This research project has been co-ordinated by Luigi Federico Signorini and by a Steering Group composed by Giovanni Ferri, Giorgio Gobbi, Massimo Omicccioli, Guido Pellegrini, and Sandro Trento.