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The innovation gap of Italy�s production system: roots and possible solutions

Author

Listed:
  • Matteo Bugamelli

    () (Bank of Italy)

  • Luigi Cannari

    () (Bank of Italy)

  • Francesca Lotti

    () (Bank of Italy)

  • Silvia Magri

    () (Bank of Italy)

Abstract

The lag in innovation in Italy vis-�-vis the other main industrial countries is one of the effects of the fragmentation of the production system into many small firms that have trouble bearing the high cost of R&D and taking the related risks. Such other causes as shortages in human capital for management and R&D and excessive labor flexibility, undermining the incentive to invest in training, also play a role. Lack of financial sources is a further hurdle; equity, more suitable than debt for financing innovation, is less common than in other countries. Public incentives for firms have had modest results. To enhance the capacity for innovation some actions should be taken to help firms grow, adopt a more managerial approach, and increase their equity. It is important to support the venture capital market, which is less developed than in other countries. The design and management of public funding for innovation need improvement.

Suggested Citation

  • Matteo Bugamelli & Luigi Cannari & Francesca Lotti & Silvia Magri, 2012. "The innovation gap of Italy�s production system: roots and possible solutions," Questioni di Economia e Finanza (Occasional Papers) 121, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:opques:qef_121_12
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    Cited by:

    1. International Monetary Fund, 2013. "Italy; Technical Note on the Financial Situation of Italian Households and Non-Financial Corporations and Risks to the Banking System," IMF Staff Country Reports 13/348, International Monetary Fund.
    2. Giovanni Marin & Francesca Lotti, 2017. "Productivity effects of eco-innovations using data on eco-patents," Industrial and Corporate Change, Oxford University Press, vol. 26(1), pages 125-148.
    3. Daniela Bragoli & Flavia Cortelezzi & Giovanni Marseguerra, 2016. "R&D, capital structure and ownership concentration: evidence from Italian microdata," Industry and Innovation, Taylor & Francis Journals, vol. 23(3), pages 223-242, April.
    4. Criscuolo, Chiara & Gal, Peter N. & Menon, Carlo, 2014. "The dynamics of employment growth: new evidence from 18 countries," LSE Research Online Documents on Economics 60286, London School of Economics and Political Science, LSE Library.
    5. Stefania De Mitri & Antonio De Socio & Paolo Finaldi Russo & Valentina Nigro, 2013. "Micro-enterprises in Italy: a first analysis of economic and financial conditions," Questioni di Economia e Finanza (Occasional Papers) 162, Bank of Italy, Economic Research and International Relations Area.
    6. Silvia Magri, 2014. "Does issuing equities help R&D activity? Evidence from unlisted Italian high-tech manufacturing firms," Temi di discussione (Economic working papers) 978, Bank of Italy, Economic Research and International Relations Area.
    7. Silvia Angilella & Sebastiano Mazz`u, 2013. "The Financing of Innovative SMEs: a multicriteria credit rating model," Papers 1308.0889, arXiv.org, revised Jun 2014.
    8. Angilella, Silvia & Mazzù, Sebastiano, 2015. "The financing of innovative SMEs: A multicriteria credit rating model," European Journal of Operational Research, Elsevier, vol. 244(2), pages 540-554.
    9. Harald Gruber, 2016. "Industrial policy options for sustaining growth in Italy," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 43(3), pages 281-289, September.
    10. Silvia Magri, 2014. "Does issuing equity help R&D activity? Evidence from unlisted Italian high-tech manufacturing firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(8), pages 825-854, November.
    11. Valerio Vacca, 2013. "Financing innovation in Italy: an analysis of venture capital and private equity investments," Questioni di Economia e Finanza (Occasional Papers) 209, Bank of Italy, Economic Research and International Relations Area.
    12. Lima, Rita, 2016. "Capitale umano, innovazione tecnologica e divari economici nell’era post-knowledge? Un’analisi econometrica a livello sub nazionale
      [Human capital, technological innovation and economic gaps in the
      ," MPRA Paper 70539, University Library of Munich, Germany.
    13. Matteo Bugamelli & Francesca Lotti & Monica Amici & Emanuela Ciapanna & Fabrizio Colonna & Francesco D’Amuri & Silvia Giacomelli & Andrea Linarello & Francesco Manaresi & Giuliana Palumbo & Filippo Sc, 2018. "Productivity growth in Italy: a tale of a slow-motion change," Questioni di Economia e Finanza (Occasional Papers) 422, Bank of Italy, Economic Research and International Relations Area.

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    Keywords

    R&D; innovation; policy measures; Italy;

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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