Abstract

This article investigates the dynamics of deindustrialization in Italy, from 2010 to 2020, with a focus on two key drivers of structural change, that are outsourcing and offshoring, providing the following key findings. First, by comparing the sectoral and the subsystem approaches, it shows that the real weight of manufacturing is much greater than what traditional sector-based data suggest. However, the Italian economy suffered a significant reduction in manufacturing employment even when adopting the subsystem approach. Furthermore, this process did not uniformly impact all manufacturing subsystems, as the data revealed significant heterogeneity within manufacturing: the Low Tech and Medium Low Tech subsystems experienced profound deindustrialization, while a strong process of reindustrialization characterized the evolution of the Medium High Tech subsystems. Second, our analysis shows that the level of outsourcing continued to grow even during the years 2010-2020, and the subsystems with higher levels of technological intensity were also the most service-oriented. The third main finding concerns the changes in international relations: a clear trend of reshoring and nearshoring has characterized the evolution of the Italian economic system, particularly strong in the Low Tech and High Tech subsystems