The last mile of industrial policy: Opportunities and risks in the implementation of Italy’s recovery plan

Luigi Burroni

Stato e mercato, 2025, issue 2, 285-299

Abstract: In recent years, the return of industrial policy across Europe has marked a major shift from decades of state neutrality. Italy’s National Recovery and Resilience Plan (PNRR), the country’s most ambitious public investment strategy in decades, exemplifies this new wave of state intervention. This paper focuses on the «last mile» of industrial policy – namely, the phase of implementation where strategic objectives meet concrete realities – and explores both the promises and pitfalls of this new paradigm. Drawing on the tools and instruments of the PNRR, particularly those in Mission 1 (Component 2: Digitalization and Competitiveness) and Mission 4 (Component 2: From Research to Business), the analysis identifies three key opportunities: the modernization of the production system; the reinforcement of public research and hybrid professional skills; and the promotion of new forms of connection between actors, institutions, and territories. These emerging forms of coordination move beyond Italy’s traditional focus on firm-level incentives, offering a more systematic approach to development. However, the paper also highlights three structural risks. The first is the episodic nature of the intervention («camel logic»): the absence of ordinary infrastructures could turn extraordinary funding into fragmented and unsustainable outcomes. The second risk concerns territorial inequalities, where stronger regions benefit disproportionately from the program («Matthew effect»), exacerbating existing asymmetries. The third involves limited additionality and the lack of conditionality: too many interventions merely accelerate existing investments, without generating new trajectories or requiring firms to commit to broader social or environmental goals. Ultimately, the paper calls for renewed attention to the implementation phase of policy, where ambition meets institutional reality – and where the potential for transformative change truly resides.

Keywords: Industrial Policy; Regional Development Planning and Policy; Government Policy (search for similar items in EconPapers)
Date: 2025
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