Italy Economic Conditions

Italy Economic Conditions

Development and growth 

Despite ancient craft (and also industrial) traditions, the Italy it was a distinctly rural town until the early twentieth century, perhaps more in terms of social and territorial assets than in terms of the productive economy. After the Second World War, industry spread from the Turin-Milan-Genoa ‘triangle’ to other areas of the Center-North, despite specific industrialization policies in the South and the islands. The post-war recovery was based on basic industry and public works, thanks to the availability of adequate investments and abundant and highly qualified human capital, as well as deep-rooted and quality production propensities; all this, despite the accentuated scarcity of raw materials, especially energy, which became acute in the 1950s and 1960s. A fundamental characteristic of the Italian economy has always been, in fact, dependence on international trade: first as an exporter of agricultural products against mineral raw materials and manufactured goods; then as an importer of raw materials and exporter of manufactured goods; finally as an importer and exporter of both agricultural products and manufactured goods, in a very lively interchange that sees only the energy sector seriously deficient. Another structural feature is the small size of the company, in all economic sectors, despite the presence of large industrial and tertiary complexes. Small and medium-sized enterprises have supported recent economic development more than large ones; industrial enterprises with less than 10 employees are 95% of the total and employ 47% of the workforce. Certain territorial and productive structures, such as ‘industrial districts’,

In 1951, agricultural assets were 42% of the total and the sector provided 24% of the wealth produced; half a century later, the respective values ​​were around 4% and 2%. Industry has not absorbed the labor force that abandoned agriculture: since the end of the 1930s it has employed about a third of the total workforce (with a peak of over 40% in the 1970s) and guarantees a similar share of gross domestic product, despite a recent decline to around 27%. The expanding sector was, therefore, the tertiary sector, which employs over two thirds of the workforce, produces 70% of the country’s wealth and absorbs personnel looking for their first job, allowing the unemployment rate to be contained. This, which rose over 12% in the 1980s and 1990s, appears to settle at around 7.9% in 2009,

Agricultural activities 

Before the Second World War, capitalist agriculture in Italy was present almost only in the Po Valley; in the central regions the small company with direct management or sharecropping predominated; in the South there were still large estates, eliminated starting from the agrarian reform (1950). There was clear fragmentation of land, still such despite the incessant and rapid decline in the number of farms. From the 1950s and 1960s, fragmentation, too low profitability (due to the price regime) and variations in social models led a large part of the rural population to abandon their offices and their profession, marking the transition from an agricultural economy (and commercial) to one based on industry and services.

Two basic types of agriculture still coexist in Italy: insular and peninsular agriculture, based on olive trees, vines, citrus fruits and vegetables (and once integrated with sheep farming); and the continental one, marked by cereals, fruit trees, fodder and industrial crops (integrated in turn with cattle and pig breeding). These two types, however, increasingly fade into one another, due to the growing attention of small owners (also in the South) to the demands of the market; but also due to a certain recovery, in the hilly areas of the whole Italy, of organic and quality fruit and vegetable production, which tend to replace mass production and contrast the reduction of cultivated areas (uncultivated land is equal to about 19% of territory); in the same direction goes the diffusion of multifunctional companies (agritourism,

Arable crops, which occupied more than half of agricultural land in 1951, fell (2005) to 32%, but have a much higher productivity. The production of cereals, vines and olive trees, vegetables and fruit remains important, with trends corresponding above all to the trend of international markets. A very strong expansion of cereals, for example, up to the doubling of production in the space of two or three decades, seems to have been exhausted in the face of greater convenience in accessing the foreign market; similar trends in industrial crops (sugar beet, oilseeds); the production of vegetables and fruit is more stable or growing, affecting the South as a whole, also thanks to the expansion of irrigated areas and forced crops (early fruits). For decades, viticulture has been converting to certified quality productions, although it also retains a quantitative primacy at world level (disputed by France); similar is the case of olive growing and fruit and vegetable production as a guarantee of origin. The role of the foreign market has increased dramatically: both as a supplier of cereals and as a recipient of vegetables, fruit and derived products.

The trend in livestock production appears to be no different: the number of cattle, which at first increased significantly, fell below 7 million (how many in the first half of the 20th century), although the production of milk and derivatives is increased; sheep and even more goats recorded a continuous decline, only recently slowed down; more stable the quantity of pigs. Some specific segments (for example, buffalo breeding), on the other hand, mark very rapid progress linked to market demand. Even for animal products (including fish), an increasing part of consumption is guaranteed by imports.

Industrial activities 

The automotive, steel and petrochemical sectors are the basis of post-war industrialization in Italy. The weight of FIAT, at the origin of mass motorization, of the demand for steel products (also fueled by construction and public works), of the strengthening of the road network and the construction of the motorway, of the formation of a vast induced production, as well as the start of South-North migrations. The steel industry benefited from post-war public investments and the possibility of locating full-cycle plants on the coasts, which also supplied products to other ECSC countries. Similar is the case of the oil and petrochemical sectors, with coastal refining centers and basic petrochemical production, whose supply,

The automotive sector, amidst economic ups and downs, retains a primacy in the Italian manufacturing scenario and a certain importance at European and world level. Among mechanical constructions, shipbuilding, household appliances and the production of machine tools are also of great importance, where Italy boasts world-leading positions. The other two basic sectors, on the other hand, experienced a downsizing, as a result of both the energy crisis of 1973 and the emergence of other world producers (for the steel industry). The 17 Italian refineries in operation have recently seen an increase in their overall production, but without recovering the totals of the 1970s. The role of Italy for the transit of pipelines: both oil pipelines, which also supply other countries, and gas pipelines (33,000 km of pipelines), extensively branched in Italy and also in the service of other states. The diversification of energy suppliers is marked, even if the prevalence of Algeria (for gas), Libya, the Gulf countries and Russia (for oil) is clear. Iron and steel production, mainly due to small and medium-sized plants that work mainly special steels, has recovered and slightly improved the production dimensions prior to the crisis (10 million tons of cast iron, 29 of steel). These three industrial sectors were also supposed to promote the industrialization of the South, but the process did not have the expected results. Moreover, industrial investments in Italy, starting from the end of the twentieth century, have been directed above all towards initiatives of delocalization abroad of productions or production segments, where fiscal and labor market conditions allowed greater profitability. However, a southern industry has been forming, albeit with overall modest production capacities; with the exception of several exemplary cases, also present in high-tech sectors (avionics, electronics). However, a large part of Italian industry refers to sectors other than basic industry. Marked by the propensity for consumer goods (furniture, textiles and clothing, household appliances, furnishings, foodstuffs), production touches almost all sectors, often occupying important positions in the world market.

Commercial activities 

According to usprivateschoolsfinder, foreign trade has grown rapidly and has exceeded 300 billion euros per year in import and export. The trade correspondents of the Italy they are very numerous, but the role of those of the European Union has always been increasing. More or less slightly in deficit until the 1980s, the trade balance had even substantial surpluses for some years, then settling on a substantial breakeven (apart from cyclical situations such as in 2006 and in the following years, when the sharp increase in the price of oil unbalanced accounts).

Italy Economic Conditions

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