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Page 42

B Y M IC H A E L T O TA H ( B O C C ON I ’ 11)

EUROPE:

Italy: People protesting against unemployment and current politics.

WHERE IS ITALY’S GROWTH? A of

bargaining at a national level which, even

fi nancial markets and of the EU

though it has not resulted in excessive

debt crisis, added focus has been

wage growth. It makes wages much more

given to the issue of economic growth, and

“sticky” and exacerbates regional diff erences

the lack of it in Europe and the US. In fact,

in

many western countries are suff ering from a

generous

slow down in economic activity that is due to

(cassa integrazione guadagni) coupled with

both business cycle and structural long-term

high employment protections for full-time

issues. But among the developed economies,

employment enhances the rigidity of the

Italy has been experiencing growth rates

market. Italy’s low economic productivity

below its peers for the last two decades,

and

which can only be explained by structural

regulation and governmental oversight of the

peculiarities of the Italian economy.

product market: due to restrictive regulatory

fter

the

partial

stabilization

First of all, Italy is characterized by numerous

42

111210 hq.indd 42

market

rigidities

due

to

the

economic

development.

wage

growth

is

In

addition,

supplementation

also

aff ected

funds

by

strict

measures, entry costs are extremely high, especially

for

start-ups.

Italy’s

product

country’s regulatory and social framework.

market is the third most regulated among

The labour market is particularly ineffi cient,

the 27 OECD countries, ranks fi rst in terms

with

European

of administrative burdens to start-ups and

average: in fact, the low participation rate

state involvement, in the form of public

(60%) and

ownership

productivity

below

the

weekly hours worked in line

and

involvement

in

business

with the European average (41 hours per

operations, is one of the highest in Europe.

week), determine a comparatively low total

It has to be pointed out that regulation in the

labour utilization. The inability to allocate

product market is not homogeneous, so as

labour in an effi cient and timely manner,

to hamper the international competitiveness

which in turn aff ects labour productivity,

and productivity of specifi c industries: the

is due to a widespread system of collective

bulk of regulation, in fact, aff ects the service

I N T E R N AT I O N A L B U S I N E S S R E V I E W

FA L L 2 0 1 0

11/27/2010 3:13:14 PM

Profile for Daniel Hellwig

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

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