Growth, competitiveness and firm size: factors shaping the role of Italy’s productive system in the world arena

The well-known anomaly of the size structure of Italian manufacturing industry, in which small and micro firms have a disproportionately high share of total employment and value added and large firms a correspondingly low one, has been accentuated in recent years, depressing nominal labour productivity in the economy as a whole. Hindering the expansion of small firms are obstacles rooted in structural and behavioural characteristics of the productive system, such as the aversion to loss of direct ownership and management control of family businesses and the consolidation of the model of industrial districts, alongside factors external to the firm, such as the nature of Italy’s banking and financial system and industrial policy measures. The declining trend in Italy’s shares of the international market in recent years reflects an unfavourable composition of outlet markets and sectors in terms of their relative growth dynamics, but it also stems largely from problems connected with the size-imposed limits on international and transnational expansion and the gradual break-up of once-dominant oligopolistic groups. The risks of a model of development in industry and services based on poor or mediocre human capital, and thus unable to employ and exploit the growing supply of graduates entering the labour market, must not be underestimated.Trade, Competitiveness, Size of firms, ItalyDirect Investment, Employment,Productivity.