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We often pointed out that, on average, Italian companies do not invest enough in innovation. An MPS research shows that this may have costed as much as a 5% total GDP growth between 2000 and 2008. In fact, Italian enterpreneurs and politicians usually blame China’s competition for Italian export difficulties, that suffers the low prices of goods produced in countries where labor cost is very low. But the research shows that, between 2000 and 2008, Italy lost competitivity most of all against the other Eurozone countries, and Germany first of all.

If Italy had the same productivity development as Germany, they could have had a $78 billion export growth, that equals 5% of GDP.

There are several reasons, and I’d say they are well-known since even here we talked about them quite often:

• under average productivity: even if Italian salaries are under EOCD average, labor cost per product unit are well above
• insufficient development of hi-tech industries: Italy is too focused on low added value industries, and did not re-positioned itself as other EU countries were able to be.
• low attractiveness for international investors: international investor think twice before investing in Italy, given the high tax rate (that, summing all different taxes, reaches 68% of profits, compared to a 44.5% European average). But also judicial system slowness deter investor, since they may have doubt of how contracts will ultimately be enforced.

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L'insufficiente Ricerca & Sviluppo costa all’Italia 5 punti di PIL