The Evolution of Trade and Technological in the Italian regions

The deepening of the integration process with the acceleration of the Single European Market (SEM), the forthcoming adoption of a single currency together with the political plans of eastwards enlargement of the European Union (EU%29 rise problems of disparities and inequalities between and within member states. The existence of cross-border imbalances within the EU area and the relevance of the issue for a successful socio-economic integration have been widely pointed out by the literature. The convergence in GDP levels across the EU regions registered up to the 1970s slowed down in the 1980s and started to reverse in the early 1990s. The awareness of this phenomenon has promoted the flourishing of socio-economic investigations based on the region as a territorial unit of analysis in order to better understand local dynamics driving convergence/divergence processes. Amidst the more general globalisation trend, localised knowledge spillovers and geographical concentration of economic activity seem to underlie these processes. In fact, despite of the fast pace of technological change and the massive reduction of space and time constrains, geographical agglomeration matters more than ever before for the purpose of global competitiveness. If the geographical perspective has shifted from the national to the regional level in the investigation of growth differentials, it has also turned out that innovative capabilities account for a good deal in explaining inter-regional disparities. The latter seem to greatly depend upon local innovative capacities, without, however, disregarding economic-structural and institutional factors. Structural and innovative processes are closely connected and mutually reinforced by virtuous and vicious circles%2C characterising respectively “success stories” of rapid industrial and technological development and catching up, and “falling behind” models of insufficient structural change and lack of organisational flexibility and systemic interaction. Within the European arena, the heterogeneous socio-economic conditions of the Italian regions are a clear example of intra-border imbalances. In the Italian peninsula, the north-south gap, reflected in the distinction between most advanced and less favoured regions, calls for a better understanding of both structural and technological profiles of the regional sectoral systems. By providing further insight into the convergence/divergence processes of regional industrial systems in Italy, this paper will attempt to identify production and innovative potentials developed within each regional unit. The ultimate aim is to explain current leading and lagging-behind conditions as well as to focus on the developing trajectories of consolidation and redefinition of regional competitive positions. For this purpose, economic, technological and locational factors will be evaluated. As the heterogeneity of the Italian regional systems is far to be an exception in the EU, the results of this analysis and their policy implications may well be relevant to the domestic realities of other member states. Going into the details of the analysis, the paper tests the hypothesis of whether technology effort impacts on regional internationalisation (understood in terms of international trade) over time. In doing so, the evolution of sectoral trade specialisation is sketched in order to evaluate the trajectories of regional competitive patterns. The emphasis on the sectoral aspects shed some light on the knowledge exchange and learning underlying trade flows. Moreover, in order to evaluate the significance of cross-regional differences in this context, the investigation goes further by identifying regional profiles of production structure.