Abstract

The connection between the weak performance of the Italian economy and its mechanisms governing the creation and allocation of human capital has been investigated only rarely. This paper argues that the Italian economy faces not just a generic shortage of human capital but also a specific shortage of entrepreneurial human capital, which explains the small size of firms and their lack of international competitiveness in high-tech sectors. We identify the main institutional mechanisms responsible for this state of affairs and the economic policy tools needed to promote the generation of entrepreneurial human capital.