A polarized country in a polarized Europe. An industrial policy for Italy’s renaissance

This note focuses on two issues concerning industrial policy in Italy. The first relates to the question of which kind of industrial policy is better suited to meet the development needs of an economic system at an intermediate level of development focusing, in particular, on the Italian southern regions. The second issue concerns the labor market institutions that are more consistent with an industrial policy aimed at reversing the present Italian decline. We underline the incompatibility of a labor market set-up that encourages continuous turnover and cost competitiveness strategies—based on labor cost reduction—with an industrial policy aimed at strengthening and upgrading the industrial structure.