An elephant has been moving dangerously for some years now within the Italian economic glassware industry. Is called productivity (From work) and is obtained by measuring the quantity of goods or services produced per hour of work. A very recent one studio published by Bank Italy, produced by the economist Rosalia Greco, reviewed some key points relating to the structural issues of productivity in Italy.
Italy hasn't always had problems of productivity, in the past in its phases of economic expansion it had reached very high levels, almost 300% in the period between 1951 and 1992. However, with the turning point in the early nineties, productivity and income went hand in hand basically started to run aground. Even from a comparative perspective, the work of via Nazionale economists highlighted, since 2000 the growth of Italian production has lagged behind the other large industrial economies of the Eurozone, such as Germany, France and Spain, mainly due to the weak dynamics of labor productivity.
Italian productivity: between sectoral exceptions and economic fragmentation
Not all sectors of the Italian economy present the same critical issues, there are also notable exceptions in our national panorama. The industrial sector generally has better productivity indices than the rest of the economy as a whole. The Bank of Italy study finds that especially in the period 2014-2019 i manufacturing sectors more exposed to international trade recorded higher productivity growth. Export-oriented manufacturing, forced to compete in the vast sea of global competitiveness, has therefore defended itself well. In essence, empirical evidence has shown that productivity growth increases more strongly in sectors with a greater degree of intensity of foreign trade.
In the sectors of chemistry and pharmaceutica, the Italian industry for example has done better than Germany and Spain. The fact remains that, excluding some highly performing sectors, the general productivity of the Italian economy is very fragmented, as the latest numbers collected by Istat also indicate. In Italy in 2022 only the productivity of capital (+2,7%) and the total productivity of factors (+0,4%) increased, while that of labor was still decreasing, decreasing by 0,7% (between 2014 and 2022 had increased on average by 0,5%). A decline linked to the effect of an increase in hours worked greater than the increase in added value.
The Italian production paradox and the invitation to strategic innovation
It should also be underlined that in the period 2000-2022 real production grew on average by 0,3% per year in Italy, compared to 1,2-1,3% in Germany, France, Spain and the Eurozone. In total, over the twenty-year period, real Italian production grew almost four times less than that of the main European manufacturing powers.
Returning in conclusion to the Bank of Italy study, what should be the useful trick to get the elephant out of the glassware shop? The investments, a crucial lever to give a boost to work productivity. Investment trends in Europe, the Bank of Italy paper always notes, have been different depending on the countries and sectors of activity. For example, intangible assets made up a larger share of investment in the industrial sector and were more significant in France.
In a historical moment marked by high inflation, productivity is also the main connection point that unites the possibilities of an economic system to be able to afford significant contractual increases in wages and salaries. The OECD data instead ruthlessly shows how Italy, over the last twenty years, has placed itself in the bottom rung in the Eurozone with regards to the growth of real average wages. Unfortunately, even in debate politician currently, measures to activate structural processes of labor productivity are relegated to the margins of the economic agenda.
