The Industrial System in Emilia-Romagna, Its Innovation Strategies and the Crisis Phase

The paper proposes to rethink about the Emilia-Romagna regional economic system trying to go beyond the sterile opposition between the decline thesis and the transformation thesis. One of the reasons why is the fact that this regions was frequently addressed as a relevant case of successful matching of strong competitiveness of the production system and robust medium-long period social cohesion. The aggregate result comes out of two diverging paths: on one hand, the industrial sectors, pulled by external demand, show value added growth higher than national average, accompanied by employment increase; on the other hand, the service sectors constraint the economic growth with their negative productivity dynamics, compensated by a high employment intensity growth. Three factors (pillars) are at the basis of the higher performance of the Emilia-Romagna industrial sectors: positive labour productivity trends accompanied by increasing real wages, high innovation intensity of the production system shown by specific input variables of techno-organisation innovation, an institutional system of labour relations between management and employees within the firm and od social regulation of conflicts which favours dialogue with trade union and the sharing of confrontation procedures apt to support the innovation activity. The limited service performance might result from poor integration with industrial sectors, not high adoption and diffusion of innovations, and specific lower technology productivity (the “Baumol disease”), creation of low skill employment. This source of distress is exacerbated by a macro-economic cause, related with the unbalanced growth - external component of demand vs. internal component - underlined by the internal consumption stagnation and related to unequal income distribution and compression of remunerations and wages in service sectors