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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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    8. Silvia Angilella & Sebastiano Mazz`u, 2013. "The Financing of Innovative SMEs: a multicriteria credit rating model," Papers 1308.0889, arXiv.org, revised Jun 2014.
    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.
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    13. Calcagnini, Giorgio & Marin, Giovanni & Perugini, Francesco, 2021. "Labour flexibility, internal migration and productivity in Italian regions," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 308-320.
    14. 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.
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    More about this item

    Keywords

    R&D; innovation; policy measures; Italy;
    All these keywords.

    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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