Italy Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Italy is a country of southern Europe comprising 20 regions. It is one of the largest economies in Europe, and in the world. Its growth rates are consistently among the highest in the European Community. Italy’s economic growth has been characterized, since the political unification in 1861, by the following factors: the divergence between an industrialized north and a prevalently agricultural south; the interventionism of the state; the predominance of family capitalism; and the large number of small and medium-sized firms. More recently, the Italian economy has been affected by political instability and international competition.

The Italian economy is characterized by a rather marked division between an industrialized north, where the great majority of industrial and manufacturing activities are located, and a less developed south. The dichotomy between the northern and southern parts of the country has been a major problem for the implementation of equal economic policies. The northern regions of the Italian peninsula, especially Lombardy, Piedmont, Veneto, and Liguria, see the greatest concentration of industrial activities. By contrast, the southern part of the country has never experienced industrial development comparable to that of the northern regions. In the 1960s, when Italy went through an economic boom, the divergence between the north and the south heightened, and many people migrated from the south to the north in search of better-paid jobs. Although in recent decades new opportunities for the economic development of the southern region have arisen, thanks also to the financial aid of the European Community, the north-south dichotomy and its social and political implications continue to be a current issue.

Since the origin of Italy as an independent and unified country in the mid-19th century, the Italian state has been markedly interventionist, entering the country’s economic life in many ways, especially by subsidizing several industrial sectors. Along with Japan and Germany, Italy has been considered one of the most interventionist states. Italian industries and banks have benefited, over time, from large state subsidies. For example, Sofindit (financial company of the Banca Commerciale Italiana), Ansaldo, Terni, and in recent times even Fiat have received frequent subsidies from the state. The reasons behind the interventionism of the Italian state are several and complex; they are closely linked on the one hand, to the a typicality of the Italian political and economic unification, and on the other to the specificity of the Italian economic growth that witnessed a rather peculiar combination of private and public capitalism.

Family ties have been extremely important for the growth of modern Italian business, and Italy owes much to “familial capitalism,” as the remarkably impressive persistence over time of family-run firms in the Italian economy evinces. Although the notion of family business has had for a long time a negative connotation that suggests economic backwardness and commercial weakness, the excellent performances of Italian family-run companies and industries in the past decades contradicts such generalized view. Family-run business can be, in practice, highly articulated forms of managing business that displays a remarkable flexibility, ability in negotiation, and noteworthy capacities of quickly responding to market changes. Well-known Italian companies such as Benetton, Missoni, Fiat, and Beretta, have been founded and run by families.

Along with family capitalism, another distinguishing aspect of Italian economic growth has been the pervasive presence of the so-called piccola impresa (small business). Since the late 19th century it has represented a vital component of the domestic economy, particularly in northern Italy. In the 20th century the excellent performance of Italian small business, especially in some specific sectors, made it an admired model of “flexible capitalism.” The combination of family capitalism and the pervasiveness of small business (the great majority of Italian manufacturing and industrial activities are run by one family and employ less than 50 workers) seems to be the hallmark of the Italian economy.

In spite of its flexibility and competitiveness, the Italian productive system, however, has been able to cope only partially with the upheavals of the last three decades and the challenges of globalization. In spite of an increasing gross domestic product ( according to data provided by ISTAT, Italian national product has grown steadily from 1970 to 2007), the Italian economy has been one of the most unstable in Europe in the last two decades. It has continued to have one of the highest growth rates within the European Community, but it has progressively shown a number of structural weaknesses. Italian economic performance has lagged behind that of other EU countries, and the prolonged climate of political instability in the last few years has affected the Italian economy. The introduction of the euro in the 1990s, which replaced the Italian lira, has led to additional difficulty, with consequent price increases and stagnation of production. Fierce international competition in some sectors, such as textiles, has impacted Italian production. A restructuring of the Italian economy has been called for by many parties.

Bibliography:

Maurizio Carbone, “Italy and the South of the World: Still a Laggard in International Development?” Journal of Modern Italian Studies (v.13/1, 2008);
Jon Cohen and Giovanni Federico, The Growth of the Italian Economy, 1820–1960 (Cambridge University Press, 2001);
Luca Iandoli, Hans Landström, and Mario Raffa, Entrepreneurship, Competitiveness and Local Development: Frontiers in European Entrepreneurship Research (Edward Elgar, 2007);
Christiane Krieger-Boden, Edgar L. W. Morgenroth, and George Petrakos, The Impact of European Integration on Regional Structural Change and Cohesion (Routledge, 2008);
Silvia Magri, The Financing of Small Innovative Firms: The Italian Case (Banca d’Italia, 2007);
Camilla Mastromarco and Ulrich Woitek, “Regional Business Cycles in Italy,” Computational Statistics and Data Analysis (v.52/2, 2007).

This example Italy Essay is published for educational and informational purposes only. If you need a custom essay or research paper on this topic please use our writing services. EssayEmpire.com offers reliable custom essay writing services that can help you to receive high grades and impress your professors with the quality of each essay or research paper you hand in.