Regional divide in innovation: Italian regions vs Baden-Württemberg

17 March 2014

Italian regions are moderate innovators — says the Regional Innovation Scoreboard 2014 — are German innovation leaders actually out of reach?

The European Commission's Directorate-General for Enterprise and Industry recently released The Regional Innovation Scoreboard 2014. The publication featured once again the role of Italian regions as moderate innovators, ranking the third place according to a scale from one (innovation leaders) to four (modest innovators). As shown in Fig. 1, Italian regions’ performances are comparable to those of Spanish and Greek ones as well as those of a few French and Norwegian regions. Yet a closer look at data allows us to point out some interesting evidences. 

Fig. 1 - Regions’ innovation performance
Source: Regional Innovation Scoreboard 2014.

3 out of the 21 Italian regions, namely Piemonte, Friuli Venezia Giulia and Emilia Romagna, are ranked among the innovation followers, moving up one position from the national average. Besides regions’ innovation score is based on a compound index which may hide the results referred to each single indicator: unveiling the latter suggests a more detailed and heterogeneous picture of regional innovation. With this aim in mind, Italian regions’ performances related to each of the 11 indicators summarized in the composite index have been compared to those of Baden-Württemberg, a German region ranked among the top innovation leaders in the EU. The results of this exercise are depicted in Table 1 where each cell is coloured according to the distance between the value obtained by the Italian region and the corresponding value attained by Baden-Württemberg. Thus, the most intense red indicates the Italian region’s value is more than 75% lower than Baden-Württemberg’s one, while the lightest pink denotes a distance smaller than the 25% and green cells signal a higher rank for Italian regions’ indicators. 

Table 1 - The Regional Innovation Scoreboard Indicators: distance from Baden-Württemberg
  • All the regions show narrow gaps in “sales of new-to-market and new-to-firm innovations”, i.e. the relevance of new or significantly improved products. Sales of new to the firm but not new to the market products are a proxy of the use or implementation of elsewhere already introduced products (or technologies).
  • Italian regions exhibit either small gaps or even outperform Baden-Württemberg in “non-R&D innovation expenditures”, i.e. the indicator that measures the diffusion of technologies and new ideas embodied in expenditures such as investment in equipment and machinery and the acquisition of patents and licenses.
  • Some of Northern Italy regions, namely Piemonte, Lombardia, Veneto, Friuli Venezia Giulia and Emilia Romagna, display narrow gaps in “SMEs (small-medium enterprises) innovating in-house”, that is the degree to which SMEs, that have introduced any new or significantly improved products or production processes, have innovated in-house.
  • Almost half of the Italian regions, the Central ones in particular, are characterized by wide  differences in the degree to which SMES co-operate with other enterprises or institutions.
  • All Southern Italy regions fall utterly behind in terms of R&D expenditures in the business sector and patenting activity.

To sum up Italian regions’ innovation gap appears  to be smaller than evaluated at a first glance. Yet one of the major weaknesses rests on a less proactive behaviour of companies, that prefer innovate more by adopting technologies and innovation already developed elsewhere and less by developing true new products or process innovations themselves. Finally the satisfactory propensity to in-house innovation by Northern Italy’s SMEs should be strengthen by a tougher co-operation with others, since complex innovations often require different flows of information and knowledge easily circulating among firms and institutions. 

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