Ricerc@Sapienza

While it is well established that innovation is one of the main drivers of economic growth, there is no consensus in the literature on the impact that Innovation had on Italian industrial performance. Since the Unification, Italy has been an importer of foreign technology, having limited availability of natural resources and human capital. This caused on the one hand few investments in scientific research and in the production of autonomous technology, and on the other hand an increase in the ability to adapt these new technologies and to spread them through knowledge. According the literature, Italy failed to achieve economic growth driven by technological change by missing the opportunity to be competitive in High-Tech Sectors, especially because of a weak performance in developing frontier technologies and technological Knowledge (Giannetti, 1998).
The aim of this research project is to answer the following question: Why did Italian industry not boost innovation in capital-intensive sectors in the first half of 20th century?
Italy had low levels of expenditure on R&D compared to other major OECD countries (Malerba, 1993) and some scholars state that Italian growth episodes were fortuitous. However, R&D data fails to explain the overall innovation activity by omitting technological advances in labor intensive industries (Cohen & Federico, 2001). A recent work of Antonelli & Feder (2019) finds evidence of a significant technological change in the period before the Golden Age. Starting from this evidence, we try to extend the existing literature by built a new real wage data-set, estimated by industrial sectors during the Italian Interwar period.The role of high real wages on innovations is discussed by Allen (2006) in the British historical context. To investigate this connection in the context of Italy, we aim to implement an RDD analysis to evaluate the effect of the fascist policy of low heavy industrial wages on the technological improvements.