The generative effects of economic crises: the case of the Italian innovation system

Abstract

This article seeks to shed light on the profound changes taking place in the Italian innovation system. While the system ensured sustained growth until the Eighties, the country’s competitiveness in the high and medium-high tech sectors was eroded by the shift from Fordism to post-Fordism. Recently, however, there have been signs that firms are once again showing an appetite for innovation, and that there is a renewed commitment on the part of the state to supporting business’ technological advances and digitalization. After detailing the distinctive features of the Italian innovation system, we describe the striking improvements in digital propensity and capacity for innovation that Italian firms have made in recent years. On the whole, as we show, the Italian economic system has benefited from “generative dynamics” triggered, first, by the Great Recession of 2008 and, later, by the 2020 pandemic crisis. In addition, we discuss the role of public policies in promoting the Italian innovation system with a specific focus on medium-high tech manufacturing.