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National income has returned to the levels observed in early 1993. In per capita terms, GDP has fallen to the values recorded at the end of the 1980s.
National income has returned to the levels observed in early 1993. In per capita terms, GDP has fallen to the values recorded at the end of the 1980s.
3 ‘reading
Italy’s GDP per capita went back 30 years and the reason, explains the governor of the Bank of Italy, Ignazio Visco in a speech at the Euroscience Open Forum (ESOF) in Trieste, is not just the collapse of the economy. due to the pandemic, but the fact that the country’s growth has been weak since the 1990s. No other major advanced economy has experienced such a major setback as Italy. Visco indicates the recipe to return to sustainable growth: the main asset in which to invest is knowledge and then measures must be implemented to remove the obstacles that hinder the country’s innovation.
The governor of the Bank of Italy, in his speech at the biennial Forum dedicated to scientific research and innovation, recalls in the text the fall in Italian GDP in the second quarter, around 13 percent compared to the previous quarter, and It notes that in other countries it was “similar or even worse” in the same quarter, but no one else made “the big leap back because growth was stronger elsewhere.” That is why Germany ‘landed’ on the levels of GDP per capita in 2010, France and Spain in 2002 and the United States returned to 2014. For this reason, Italy faces problems that have compressed its growth in recent times. Thirty years is “as important” as contrasting the difficulties that have arisen with the pandemic. “As I have argued on several occasions,” Visco states in the text, “it is essential that reforms be implemented to create a more favorable environment for companies, increasing the quality and efficiency of public services, reducing administrative and bureaucratic burdens, lowering the weight of ‘tax evasion, corruption and other criminal activities’. All important reforms “but not enough for an advanced country like Italy.”
According to Visco, “when a country approaches the technological frontier (…) economic growth depends on the ability to incorporate and promote innovation, which requires adequate spending on new technologies, and on the quantity and quality of the investments in education, from primary school to university. ” Next, the governor adds that “the accumulated delays in innovation and education and their interrelation with the structures of the productive system are probably the origin of the weakness of Italian economic growth.”
Priority in school and research
According to the governor, reforms should be implemented to relaunch the Italian economy after the Covid emergency, but they will be “insufficient” for an advanced country like Italy if it does not also focus on research and development and education. “We cannot rely only on cost and price competitiveness”, but on the ability to innovate. “Italy is among the lowest ranked countries in the OECD in research and development spending and this is accompanied by underinvestment in education.” Furthermore, “the data shows that Italians do not attend school long enough.”
Business dwarfism is holding back innovation
“The structure of the production system in Italy is extremely fragmented” and its “dwarfism” “is related to the ability of companies to introduce good management practices, adopt new technologies to develop innovation and invest in human capital. These characteristics of our industries profoundly affect the average productivity of the economy. Large Italian companies tend to be more productive than the corresponding French and German companies, but the large group of small companies is much less productive and lowers the average. ‘
