Innovation, structural change and

productivity growth: evidence from Italian regions, 1980–2003 Francesco Quatraro* This paper develops a Schumpeterian approach to structural change, by grafting the role of business cycles and creative destruction into the growth retardation theory. The context of the empirical analysis is represented by the growth path of 20 Italian regions over the period 1981–2003, in the light of the transition towards the knowledge-based economy. The results strongly support our hypotheses: (i) early-industrialised areas are fully involved in the generalised movement towards the knowledge-based economy; (ii) due to the delayed expansion of manufacturing activities in late-industrialised areas, productivity growth and innovation takes place within manufacturing sectors