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