Abstract

In a rapidly evolving environment, industrial countries market shares tend to shrink and firms (and governments) have to adjust to higher competitiveness. In Italy, a country specialized in the production and export of traditional goods, and therefore more exposed than others to the price competitiveness of emerging countries, export shares in volume have been falling for about ten years and more than for other industrial countries. Exporting firms have undergone a process of structural change and the "survivors" seem to be the one that reacted either delocalizing low value added and skill intense production phases or upgrading the quality of the traditional goods (or both). Rather than changing specialization and moving towards research-intensive goods, Italian firms have found market niches producing high quality goods. Protectionism and devaluation are not feasible strategies to win. Institutions should support the internationalization of italian firms trying to offset their well-known drawbacks: size, geographical and sectoral specialization and low foreign direct investment.