Structural Reform in Italy 2014-2017 (CR 2018)
This study provides microeconomic, sectoral and regional analyses for the potential or actual impact of the reforms, undertaken by the Italian government, in the areas of public procurement, measures to foster business growth: e-government, SMEs' access to finance as well as research and innovation, and competition in services. During the last decade, Italy has been able to substantially reduce the gap with respect to the EU partners in terms of provision of digital infrastructures for e-government (including e-procurement). However, when looking at the effective usage of these technologies, Italian performance is still unsatisfactory. In this respect, along with the lack of digital competencies of potential users, the tight budget constraints and consequent block of personnel turnover have deprived the Italian public administrations of the critical mass of skills, training and organisational changes needed to accelerate the digital transformation. With respect to the issue of access to finance, Italian SMEs are still characterised by an overreliance on bank debt. Consistently, along with allowing bank-dependent SMEs to operate in a safe set of conditions, the recent fiscal and legislative interventions undertaken by the Italian government have attempted to facilitate the transition to a more intense use of equity finance and market-based financial instruments. All in all, these interventions have been effective. However, some corrections are advisable in terms of strengthening some measures (such as the allowance for corporate equity) and targeting others (e.g., minibonds and individual investment plans) in a more effective way. Moreover, the above framework should be enriched with other interventions aimed at enlarging the markets for venture capital and private equity. With respect to the Italian trade sector, comparative indicators show that the regulatory burden is still significantly higher than the EU average. A lower regulatory restrictiveness in retail trade has a positive effect on the productivity of the aggregate trade sector. In this connection, the Legislative Decree 201/2011 has contributed to the modernisation of the trade sector and improved consumer welfare. This has been accompanied by the exit of smaller and probably less efficient firms. However, the impact of the 2011 reform should not be overstated, since the overall performance of the trade sector has been mainly affected by the trend of domestic consumption. In any case, the increasing difficulties that small retailers have to face cannot be neglected. For these companies to survive and possibly grow, it is necessary to foster innovations, both in terms of organisational changes and digitalisation.