Upgrading Italy's Industrial Capacity: Industry 4.0 across Regions and Sectors

Abstract

How are Industry 4.0 investments distributed across Italian regions and sectors? Which are the main drivers of diffusion? To address these questions, in this study we exploit rich firm survey data on the adoption of the new digital technologies and examine their adoption patterns. On the one hand, we produce novel insights into the drivers of structural change in the Italian economy, and on the other, we provide evidence on the technological upgrading of Italy's production capacity that is relevant for policy. The results of econometric tests on region-sector pairs indicate that corporate governance characteristics, innovation patterns and type of industrial relations are significant predictors of the uneven regional and sectoral distribution of Industry 4.0 investments.