Industrial policy and technology in Italy

After the crisis started in 2008 Italy’s industry has lost close to one quarter of its industrial production. The possibility for the country to reconstruct its production capacity largely depends on whether a new industrial policy is developed. The article documents the decline of Italy’s industry and technology and the impact of the crisis. The demise of traditional industrial policy in Italy and Europe in the last two decades is examined, assessing the consequences of the retreat of public action in this field and the evolution of the current debate. A detailed analysis of the current tools used in Italy’s industrial and innovation policy is carried out, showing its ‘horizontal’ approach, limited resources, fragmented measures, modest impact. Current initiatives appear unable to support a revival of production and domestic private investment, close Italy’s gap in R&D and innovation and upgrade its technological activities. In conclusion, a proposal for a new industrial policy combining Italian and European initiatives is summarised.

After the crisis started in 2008 Italy’s industry has lost close to one quarter of its industrial production. The article documents the decline of Italy’s industry and technology, setting it in the context of the demise of post-war government intervention and of the current European debate on industrial policies. An analysis of the current tools used in Italy’s industrial and innovation policy is carried out, showing its ‘horizontal’ approach, limited resources and fragmented measures. Current initiatives appear unable to support a revival of production and investment and to reduce Italy’s gap in technological activities. The conclusions argue that the possibility to reconstruct the country’s production capacity largely depends on the development of a new industrial policy combining Italian and European initiatives.