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

Matteo Bugamelli, Luigi Cannari (), Francesca Lotti and Silvia Magri ()

No 121, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

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.

Keywords: R&D; innovation; policy measures; Italy (search for similar items in EconPapers)
JEL-codes: L11 O32 O38 (search for similar items in EconPapers)
Date: 2012-04
New Economics Papers: this item is included in nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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