Reviewing Eighteen Years of Italian Industrial Policy (II)

Executive Summary

This report maps two decades of Italian industrial policy to inform today’s debate and future strategy. Industrial policy has returned to the core of the European agenda, yet Italy still lacks a clear overview of its own trajectory. By systematically analysing nearly twenty years of instruments — their evolution, strengths, and weaknesses — this report provides the first comprehensive account of Italy’s industrial policy between 2006 and 2024. The findings aim to ground the national debate and support more effective policy action in a rapidly shifting geopolitical and technological context.

Italy’s industrial policy between 2006 and 2024 has been fragmented and strategically weak. Over two decades, governments implemented 95 national industrial policy instruments and nearly 900 regional ones. But the absence of an overarching strategy, the persistence of institutional layering, and weak administrative capacity have severely limited their coherence and effectiveness.

Proliferation without reform. New instruments were added over time without replacing or streamlining old ones. This led to a dense and confusing policy ecosystem. Only a handful of tools — like the Central Guarantee Fund and R&D tax credits — received the majority of resources, while most others remained marginal.

Horizontal and supply-side tools dominate. Of the 95 national-level instruments mapped, 75 were aimed at boosting firm-level productivity. Only 3 addressed demand-side challenges and 17 tackled coordination or governance failures. The toolbox was skewed toward automatic, non-discretionary instruments — mainly tax credits and guarantees — rather than selective or mission-oriented policies.

Place-based and green objectives were late additions. Until the 2020s, spatial and environmental goals were largely absent. Only recently have they been incorporated — e.g. through the Green New Deal Fund and PNRR instruments — but without being embedded in a broader strategic vision.

Evaluation is the exception, not the rule. The majority of instruments were not subject to ex post impact assessment. Only a few — such as the 2012 Start-up Act and Industria 4.0 — were evaluated, limiting opportunities for policy learning and feedback.

The instrument mix is broad but lacks depth. Most tools are horizontal and automatic, with limited ability to direct transformation or correct structural imbalances. Targeted policies like Industria 4.0 yielded positive results, but have not been institutionalised or scaled due to political turnover and weak continuity.

Institutional capacity is the binding constraint. The proliferation of instruments without strategic coordination or evaluation reflects deeper governance challenges. Without stronger state capacity, even well-designed tools risk failure.

Policy Recommendations

1. Define a shared industrial strategy. Italy must articulate a long-term, mission-oriented industrial vision, aligned with EU goals and developed in partnership with business, labour, and territorial stakeholders.
2. Link public support to conditionalities. Financial support should be awarded based on transparent criteria and attached to clear policy objectives such as innovation, sustainability, and social returns.
3. Strengthen public capacity for design and implementation. Reinforce institutional coordination across ministries, agencies, and regional governments; invest in human capital and digital tools; and ensure that instruments are subject to systematic monitoring and evaluation.

This paper is the second part of a series on Italy’s growth model and industrial transformation. It complements the structural analysis of Italy’s dual economy (Part I) by mapping two decades of industrial policy instruments, and it sets the stage for Part III on the micro-foundations of competitive advantage.