Abstract
A long-standing stance argues the Italian industrial system does not comply with the “correct development process” because of its innovativeness shortage due to the skewed firm size distribution of its SMEs (Small and Medium-sized Enterprises). Such an approach, backed by innovation statistics, stems from the idea that ‘a firm’s growth equals innovation, which in turn equals competitiveness’. Yet these arguments both rely on a narrow concept of innovation and fail to match with historical facts. By putting the Italian industrial history into a Langlois’s (2003) perspective, this article suggests that “the Italian exception” actually represents one among several possible outcomes of the co-evolution among knowledge, technological progress, institutional development and aggregate demand dynamics. We further provide an analysis with very recent descriptive statistics showing that, even during the current crisis, “not so big” has not meant “not so competitive”. Therefore, innovativeness must be channeled in the right direction, because it concerns all those strategies allowing firms to “buffer risks”. What the Italian industrial system really lacks is consistent institutional and structural policies facilitating firms’ efforts toward new technologies.
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Notes
‘In particular, advertising, bandwagon and networks have been shown to be important factors in influencing the magnitude and orientation of inventive effort and the degree of industry concentration’ (Malerba 2006: 8).
‘… sectors and technologies differ greatly in terms of the knowledge base and learning processes related to innovation. In some sectors, science is the force driving knowledge growth, while in others, learning by doing and cumulativeness of advancements are the major forces. We also know that knowledge differs across sectors in terms of sources (firms, universities, and so on), domains (i.e., the specific scientific and technological fields at the base of innovative activities in a sector) and applications’ (Malerba 2006: 12).
‘…innovation and industry evolution are highly affected by the interaction of heterogeneous actors with different knowledge, competences and specialization, with relationships that may range from competitive to cooperative, from formal to informal, from market to non-market’ (Malerba 2006: 15).
In a broad sense, coevolutionary processes involve knowledge, technology, actors, demand and institutions, and are often path-dependent’ (Malerba 2006: 17).
The MET survey makes use of the most recent national classification criterion (Ateco 2007) at the second digit level in order to identify firms’ sectors. In particular it encompasses enterprises belonging to the following sectors: foods and beverages, leather and clothes, furniture and wooden objects, publishing and related industries, plastic and chemical products, metals and metal products, means of transportation, mechanics, electronic devices, the remaining manufacturing industries, communication and transportation services, and other services to the firms. The common definition of “manufacturing” involves the first ten categories, except for the mining sector, which is included in the “remaining manufacturing industries”. Therefore, in order to be as strict as possible, we decided to include only the first nine sectors within the “manufacturing” category, because it was not possible to disentangle manufacturing firms from non-manufacturing firms within the “remaining manufacturing industries” class.
Four of them will be taken as examples in the present work: one representing the so-called traditional “made in Italy” products (leather, clothes and fashion) and three related to the high-technology frontier (means of transportation production, mechanics and electronic device production).
The export-revenue ratio is doubtless a rough measure of competitiveness because it is both biased in favour of small revenues and very sensitive to the economic cycle dynamics. As to the first aspect, small overall revenues show a higher export share than large revenues ceteris paribus the amount of exports; meanwhile, as to the second one, during economic downturns the export-revenue ratio might increase simply because of a shrinkage of the domestic market sales. Nevertheless this index is interesting for two reasons. First of all, Italian “not-large-enough” firms are often regarded as less competitive than large ones on foreign markets: the evidence of a stronger drift of their activities towards these environments shows that they can satisfy foreign demand even better than large enterprises do. Second, and more importantly, by assuming a decreasing domestic demand throughout the 2008–2013 period (as is the case for Italy), export revenue values might be another signal of the firm’s ability to buffer risks by drifting its own activity abroad. Hence, higher values might be interpreted as higher managerial abilities.
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Acknowledgments
We are very grateful to Raffaele Brancati for having kindly allowed us access to the M.E.T. data set in order to write the section regarding the Italian industrial system during the crisis period. The views expressed in this article represent the authors’ opinions.
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Romagnoli, A., Romagnoli, M. The innovation in the evolution of the ‘Italian industrial model’: lights and shadows. Econ Change Restruct 49, 309–337 (2016). https://doi.org/10.1007/s10644-015-9168-4
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DOI: https://doi.org/10.1007/s10644-015-9168-4