The Ghost in the Attic ? The Italian National Innovation System in Historical Perspective Alessandro Nuvolari | Sant’Anna School of Advanced Studies, Pisa Michelangelo Vasta | University of Siena SAPIENZA UNIVERSITÀ DI ROMA 25-26 NOVEMBRE 2016 CONVEGNO SCIENTIFICO LA SOCIETÀ ITALIANA E LE GRANDI CRISI ECONOMICHE 1929-2016

Italy’s economic decline Our Interpretation: 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation System in Historical Perspective Italy’s economic decline Our Interpretation: It is a long-term productivity crisis with deep historical roots The «original sin» is a development model based on limited investments in science and technology and on the intensive use of unskilled labour This development model is not feasible in the new globalization wave Source: Felice and Vecchi (2015)

National Innovation Systems: pre-history 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation Systems in Historical Perspective National Innovation Systems: pre-history Role of “systemic interactions” among various actors/institutions in determining innovation performance and the wealth of nations Alexander Hamilton (1790s): idea of “infant industries” Friedrich List: “intellectual capital” and absorption of invention and discoveries (1841) Alexander Gerschenkron: technology gaps and institutional substitutes (1962)

National Innovation Systems: current approaches 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation in Historical Perspective National Innovation Systems: current approaches “The network of institutions in the public and private sectors whose activities and interactions initiate, import and modify and diffuse new technologies” (Freeman 1987) Focus on: corporate R&D, scientific production, human capital, policies and coordinating role of government (developmental state) “All parts and aspects of the economic structure and the institutional setup affecting learning as well as searching and exploring” (Lundvall 1992) Focus on: learning processes (including importance of incremental innovation, non R&D sources of innovation and diffusion), routines, non market interactions user-producers, trust (and social capital ?) “A set of institutions whose interactions determine the innovative performance of national firms” (Nelson 1993) Focus on: R&D system, universities, public research organizations

The decline and fall of the Italian Science and Technology ? 1700-….. 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic? The Italian National Innovation System in Historical Perspective The decline and fall of the Italian Science and Technology ? 1700-….. Pitirim Sorokin, Social and Cultural Dynamics, 1941

Average years of schooling on population (15-64 years) 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA TITOLO INTERVENTO SOTTOTITOLO Average years of schooling on population (15-64 years)

R&D expenditure on GDP (%) for benchmark years (1955-2010) 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation System in Historical Perspective R&D expenditure on GDP (%) for benchmark years (1955-2010)

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA TITOLO INTERVENTO SOTTOTITOLO Patents granted in the United States (%) to foreign residents (1883-2010) Years United Kingdom Germany France Switzerland Belgium Sweden Norway Italy Spain Japan Netherlands South Korea China Others Total 1883 43.2 23.3 17.8 2.2 2.0 1.2 0.4 0.3 0.2 - 9.3 100 1890 43.9 26.1 10.3 3.2 1.0 1.8 0.1 12.3 1900 34.1 34.3 10.9 2.5 1.5 0.5 0.8 12.4 1913 26.8 39.2 3.6 2.4 0.0 13.6 1927 25.8 33.1 11.4 4.5 3.3 0.7 1.7 13.9 1938 24.2 40.8 9.9 4.0 1.3 0.6 1.6 8.9 1950 40.5 17.5 11.0 7.5 1.1 9.1 1960 26.4 30.9 11.8 7.7 5.0 5.3 4.3 1970 18.1 27.3 10.6 6.8 1.4 3.9 3.5 16.1 8.1 1980 24.7 5.4 3.4 30.5 2.8 8.7 1990 18.5 7.0 3.1 1.9 47.5 2.3 7.8 2000 14.8 5.5 45.4 4.8 13.8 2010 11.6 4.2 41.9 17.4

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation System in Historical Perspective Patents granted to foreign residents in the US by per millions habitants

Average % by countries of total publication in Scopus (1860-2011) 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation System in Historical Perspective Average % by countries of total publication in Scopus (1860-2011) Period Italy United Kingdom France Germany United States Japan Spain Netherlands China South Korea Sweden Others 1860-1889 0.6 73.6 0.9 8.8 5.7 0.1 0.0 0.2 - 10.0 1890-1914 1.6 46.6 1.1 22.2 9.2 0.5 0.4 0.3 18.0 1919-1938 0.7 11.3 34.2 27.3 1.3 1.4 22.5 1950-1972 2.1 9.6 12.0 49.3 4.0 1.5 18.6 1973-1995 8.9 5.8 8.1 35.7 7.8 2.0 0.8 1.7 23.7 1996-2011 4.1 7.9 5.6 7.7 28.9 8.2 3.1 2.3 9.5

Geographical distribution of patents: 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation System in Historical Perspective Geographical distribution of patents:

A contextual factor: the dynamics of real wages 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation System in Historical Perspective A contextual factor: the dynamics of real wages Italy-UK real wages 1870-2010

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation System In Historical Perspective Weak “ideological” drive towards industrialization (Gerschenkron): the case of science and technology Italian marxism full of concerns for “peasants” and the “peasants question” Italian policy makers of the liberal age have a limited understanding of critical role of science and technology: Baccelli (ministro pubblica istruzione): “Our universities should have all what they need, but nothing more since vexatio dat intellectum!” (1894) Rizzetti (deputato) “In Italy, we should work more and study less. We have first to become wealthy and powerful and later on we will become a learned and science-minded nation” (1894) Fascists’ love with innovation is more rhetoric than real (eg, riforma Gentile emphasizes the central role of humanities) The rhetoric of the “small is beautiful”/ “industrial districts” view of international competitiveness (cfr. E. Nesi, Storia della mia gente, 2011)

Conclusions 1 Main features of Italian NIS 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation System in Historical Perspective Conclusions 1 Main features of Italian NIS Long term gap in education with sporadic attention to technical education Limited investment in R&D (public and private) Unsatisfactory performance in patenting activities Innovation activities specialised in less dynamic fields Export specialisation in less dynamic fields Institutional setting not well designed (no tradition of research excellence, “dispersion” of resources) Performance in terms of scientific output is “reasonable” (taking into account the limited investment) Lack of suitable bridging institutions for ensuring an effective knowledge transfer from science to industrial applications Early 1960s as a turning point ?

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA The Ghost in the Attic ? The Italian National Innovation System in Historical Perspective Conclusions 2 Italian NIS was characterized by a “ghostly” nature. Failure of Italian NIS resulted in a peculiar road towards modern economic growth based on the combination of low real wages and the intensive use of unskilled labour The sporadic appearance of the NIS in Italy is more due to lucky accidents than to planning and design and thus fit the analogy of the ghost rather well….One may even be tempted to extend the analogy to the frail and ineffectual Canterville ghost described by Oscar Wilde.