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COMPETITIVENESS AND PUBLIC DEBT : A DIFFERENT TALE ABOUT ITALIAN ECONOMY

This article challenges the belief that Italy's lack of competitiveness is responsible for its feeble economic growth. It explores the impact of public debt and the collapse of domestic demand on the Italian economy. Despite its chronic inefficiencies, Italy's manufacturing sector remains highly competitive, making it the second largest in Europe and the fifth largest in the world. Italy is also the second most competitive exporter after Germany, particularly in highly value-added products. The article highlights the contribution of regional and local clusters, using the case of Emilia and Bologna, to Italy's export success.

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COMPETITIVENESS AND PUBLIC DEBT : A DIFFERENT TALE ABOUT ITALIAN ECONOMY

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  1. COMPETITIVENESS AND PUBLIC DEBT: A DIFFERENT TALE ABOUT ITALIAN ECONOMY by Marco Fortis (vice President, Edison Foundation; Professor of Industrial Economics and International Trade, Catholic University of Milan) FEBRUARY 2013

  2. THE COMPETITIVENESS

  3. WAS THIS PICTURE REALISTIC?

  4. GROWTH AND COMPETITIVENESS • Italian GDP growth had been feeble in the last 20 years. But this trend wasn’t originated, if not in part, from a lack in competitiveness, as many people think. • In fact, Italy’s shares in the world export diminished less than other advanced countries’ like USA, Japan, France or UK. • The feeble Italian growth depends principally from a 20-years process of deleveraging in public finances, with growing taxation and a reduction in household disposable income. Furthermore, Italy didn’t participate (by fortune!) to the world credit and housing boom of the beginning of the new century that boosted an unsustainable growth in many countries.

  5. MORE DEBTS, MORE GROWTH,BUT UNSUSTAINABLE

  6. THE LOW GROWTH OF THE ITALIAN INDUSTRY TURNOVER ORIGINATED FROM A COLLAPSE OF THE DOMESTIC DEMAND NOT FROM A LACK OF COMPETITIVENESS ON WORLD MARKETS

  7. ITALIAN MANUFACTURING INDUSTRY: THE REAL PERSPECTIVE • Italy has many chronic inefficiencies at political, bureaucratic and infrastructural level that are serious constraints for the enterprises. • But, anyway, the industrial sector is highly competitive. So, Italy is one of the only five economies of the G-20 with a structural trade surplus for the manufactured products. • Italy’s manufacturing sector is the second in Europe and the fifth in the world. • In 2012 Italy recorded the highest manufacturing net trade value of its history: 94 billion euro.

  8. EMERGING COUNTRIES ARE MOVING UP, BUT ITALY’S MANUFACTURING INDUSTRY IS STILL THE SECOND IN EUROPE AND THE FIFTH IN THE WORLD

  9. ITALY IS THE MOST COMPETITIVE EXPORTER AFTER GERMANY • According to the Trade Performance Index elaborated by UNCTAD/WTO, Italy is the more competitive exporter after Germany at world level. • The made in Italy reacted vigorously to the competition of China and other emerging countries in the traditional sectors. Italy remained leader in highly value-added products of fashion and furniture and became the most competitive exporter after Germany in non-electronic machinery. • Italy is the second country after China for the highest number of non-food manufactured products (more than 1,200 over 4,000) with a net trade value higher than of Germany’s.

  10. How works the TRADE PERFORMANCE INDEX UNCTAD/WTO It is a composite indicator that ranks the competitiveness of 184 countries in 14 world trade macro-sectors, based on 5 sub-indexes: • Value of net exports; • Per capita exports; • World export shares; • Markets diversification degree; • Products diversification degree.

  11. ITALY IS VERY DIFFERENT FROM GREECE NOT ONLY FROM A FINANCIAL POINT OF VIEW, BUT ALSO IN THE REAL ECONOMY

  12. THE CONTRIBUTION OF REGIONAL AND LOCAL CLUSTERS TO THE ITALIAN EXPORT: THE CASE OF EMILIA AND BOLOGNA

  13. The Italian Packaging Valley of Emilia

  14. The German Packaging Valley of Baden-Württemberg

  15. THE REASONS OF ITALIAN SUCCESS

  16. The sales of the four leading Italian packaging machinery groups are higher than the four major German groups’ (*) The data used are those related only to the divisions involved in the packaging sector(Beverage & Packaging Division, Plastic Division, Food Machinery and Inspection Division) Source: compiled by Fondazione Edison on AIDA, AMADEUS, BOSCH, Infocamere data.

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