The impact of ICT and business services on the Italian economy

This paper studies the role played by ICT in affecting the efficiency of business services (BS) industry, using a structural disequilibrium model of the Italian economy. The Italian BS sector presents a peculiar dynamics (compared to other EU countries) in that, after initially improving its efficiency by adopting ICT, from the early 90s it stagnated. Our estimates suggest that this anomaly can be traced back to a structural deficiency in absorbing new technologies. Our contribution adds to the explanations of the slowdown of the Italian productivity.

► In this paper we investigate the dynamic effects of business services (BS) and ICT sectors on the Italian production.
► Empirical evidence show that, after an initial fast growth, BS value added share became stationary from the middle of the 90s.
► Model estimates confirm that this stagnation arise from a lack of adaptability in taking advantage of ICT technologies.