According to cheeroutdoor, Italy has a mixed economy, which is divided between services (which employs two-thirds of the workforce) and industry (which employs the remaining third). The country is known for its high quality products in industries such as automotive, fashion, defense, and machinery. Italy is also a major producer of agricultural products, with wine, dairy products, and fruits being some of its most important exports. The Italian economy has been struggling in recent years due to low economic growth and high levels of public debt. However, the country has implemented several reforms to try to improve its economic outlook, such as tax cuts and pension reforms. These efforts have helped to strengthen Italy’s economy and have allowed it to remain competitive in the global market.
Business and Economics
Today, Italy is one of the world’s leading industrial states. However, the business sector was characterized for a long time by a slow and late industrialization.
Agriculture remained the most important industry from the employment point of view until the Second World War, but the post-war period has been characterized by a dynamic, albeit regionally uneven, industrial development. Technology- and knowledge-intensive branches of the manufacturing industry and the service sector have also achieved significant success internationally. In recent years, the importance of the country’s many successful business sector’s many times for employment and flexible industrial production has become increasingly aware.
However, the importance of small businesses as creators of wealth varies between different countries and industries. In addition to small business, the element of private and publicly owned large companies is the most tangible feature of the business structure. In parallel with industrial development, the service sector has partly found new forms of its operations. Not least, service related to agricultural and industrial production has increased in importance.
Abbreviated as ITA by abbreviationfinder.org, Italy has long been perceived as a country with geographically unevenly distributed wealth, a relationship that is usually said to reflect regional differences in social patterns, business structure and the in many respects the conditions for high-productivity agriculture. Traditionally, Piedmont, Lombardy and Liguria are identified as the basis for Italian industry. Over time, however, other parts of northern Italy have also developed an increasingly advanced industrial structure.
The southern regions and islands, which together in official contexts are often referred to as the Mezzogiorno(‘in the middle of the day’, that is, where the sun is at 12 o’clock, ‘the south’), still appears as the most neglected parts of the country. Despite extensive government transfers and many large-scale industrial investments, the long-term positive effects have often been judged to be small. At the same time, dependence on the state sector has become considerably greater here than in other parts of the country. But exceptions exist, and the traditional picture of the regional oblique distribution as a virtually insoluble north-south problem must be nuanced. Thus, e.g. growth nodes in southern Lazio and parts of the Campania region have managed to attract a large part of the more viable investments that have benefited southern Italy thanks to government regulations. The cities of Bari and Catania have also shown an unusual dynamic for the country end.
During the 2000s, Italy experienced an average economic growth of 0.3 percent per year, which is among the lowest in Europe. At the same time, the country has the highest government debt in the EU; expressed in relation to GDP, in 2016 it was just over 133 percent of GDP (Sweden’s was 34 percent), surpassed in Europe only by Greece. The financial crisis of 2008–09 hit the country hard, and in 2011, the Italian government was forced to decide on tangible budget cuts and tax and levy increases.
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Italy does not have the best conditions for agriculture. The peninsula is mountainous and drought occurs. The earth is barren with the exception of the clay plains surrounding the river Po and the nutrient-rich soils of volcanic origin around Rome and Naples. But the climate is usually favorable and allows you to harvest several times a year. Italy is one of the world’s largest producers and exporters of wine and the world’s second largest producer of olive oil after Spain. Italian wines, especially the red ones, are world famous. Agriculture differs in the north and south. In the north, maize, rice, sugar beet, soybeans and fruit are mainly produced, while southern Italy grows wheat and citrus fruits. Animal production is the largest in the north.
Agriculture, which together with fishing and forestry accounts for 4 percent of total employment, has lost ground to other industries. Today, agriculture accounts for just 2 percent of GDP. Although Italy, together with France, is the EU’s leading agricultural country, it is not one of the largest exporters but is a significant net importer of food.
A largely successful land reform was implemented after the Second World War. The large goods were broken up into smaller lots for the benefit of the previous tenants. Overall, small units are a significant feature of agricultural ownership patterns and over time have come to pose a significant structural problem.
About half of the country’s area is usable land. There has been a decline in the cultivated area in recent decades. This process has been particularly noticeable in the north, which has gradually shifted the arable center of gravity towards the south. Locally, land use is mainly affected by the nature of the terrain and the climate restrictions set by the climate. As a general pattern, it can be noted that plains are mainly used for grain production, while sloping terrain is usually set aside for grazing land or for cultivation of olives, grapes and citrus fruits. One characteristic of Italy is the mix of different types of crops, so-called coltura promiscua.
About 35 percent of the arable land is occupied by fodder crop cultivation, an equal share of cereal cultivation. Wheat, which accounts for 2/3 of the grain production, is grown in most of the country’s 20 regions. On most of the wheat area, durum wheat is grown, which forms the basis for the production of pasta. Most of the durum wheat is grown in southern Italy, preferably in the regions of Apulia and Sicily. Other important field crops include maize, which is grown mainly in the northwest, as well as bean and pea plants, oats, barley and potatoes. Rice and sugar beet are common crops in the river Pos valley. Vegetables are another significant source of income for Italian agriculture.
Alongside the agricultural land of the plains, the cultivation of olives, grapes and citrus fruits is of central importance to the country’s agricultural sector. These crops are major products for the vast majority of the country’s farming units and occupy about 1/4 of the cultivated area. The cultivation is mainly concentrated on small hilly terrain, often in the transition zone between mountain and plain areas. Although the return per hour worked often appears small, olive oil, wine and fruit are also important sources of income for many small farmers.
Animal production is dominated by the regions of northern Italy. Milk and meat production is particularly well developed in Piedmont, Lombardy, Veneto and western Emilia-Romagna. Sheep and goats are found mainly in southern and central Italy, with Sardinia as the most important individual region.
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About 31 percent of Italy’s area is covered by forest. The forest area grew by about 20 percent between 1990 and 2010. However, much of this area, perhaps as much as 40 percent, is overgrown with shrub vegetation and alpine or similar vegetation rather than with commercially useful stocks of trees. About 30 percent of the forest grows in southern Italy, where deciduous trees dominate. Good-quality coniferous forest is found mainly in northern Italy, and the productive forest land is found especially in or directly adjacent to the Italian Alps and the northern parts of the Apennines. A not insignificant part of the forest area is allocated to nature reserves or as hunting grounds.
Italy is not one of Europe’s most important fishing nations, but still has the EU’s third largest fishing fleet in terms of number of boats. Sardines, sardines and salmon are the most commercially important fish species. But also a lot of octopus and seafood are caught. The majority of fish consumption is covered by imports, while exports are rather limited. During the past decade, coastal fishing in the Adriatic has been hit hard by algal blooms as a result of water pollution.
Italy is, to a greater extent than any of Europe’s major industrialized countries, characterized by a lack of economically useful minerals. Production and processing is based almost exclusively on imported or recycled raw materials. However, Italy is one of the world’s leading countries for the production of field spats, which are mined in the Italian Alps. Other industrial minerals include high-quality marble that is mined in Tuscany, plaster, bentonite, kaolin, talc and rock salt. Italy is one of the major producers of copper, crude steel and iron alloys. Iron, lead and zinc are also produced. Before 2009, Italy was a major producer of aluminum, but that year production ceased.
Italy is poor not only on minerals but also on energy resources. In 2015, Italy’s energy consumption was almost completely covered by imports. Natural gas, biofuels, geothermal energy, crude oil and water energy contribute almost equally to the domestic energy resources. Of the total consumption, however, fossil fuels account for just over 95 percent, of which oil accounts for almost half. The oil is mainly imported from the Middle East. Almost 75 percent of electricity production comes from fossil-based thermal power plants, while 18 percent comes from water energy, 5 percent from wind energy and 2 percent from geothermal energy. Renewable energy types contribute about 10 percent to GDP with the goal of reaching 17 percent by 2020.
Italy is the world’s largest net importer of electricity and 10 percent of it is imported nuclear energy. The large proportion of imported fossil energy raw materials makes the climate targets difficult to reach and drives up the electricity price, which is why there has been interest in domestic nuclear energy expansion. The last of the previous four nuclear power plants (originally planned to be twelve) were taken out of service in the late 1980s as a result of the Chernobyl accident. In 2009, new legislation enabled new construction with a view to 25 percent energy supply of domestic nuclear energy in 2030. Following the 2011 Fukushima accident, a referendum was carried out which led to these plans being finalized.
Italy is one of the world’s leading industrial nations. However, industrialization began late and the industry first became a force to be expected in the country’s economic development around the turn of the 1900s. From this time until the outbreak of the First World War, the foundations of many of today’s Italian large companies, such as Fiat (1899), were also laid.
However, real momentum only took industrial development after the Second World War. Especially the dynamic development of the 1980s propelled Italy to today’s prominent position among the industrialized countries.
The lack of many essential raw materials for business has left clear traces in Italy’s industrial landscape. A modern iron and steel industry was created just after 1900. Already the location on the coasts of the largest steel mills (Piombino, 1903; Bagnoli at Naples, 1905) points to the importance attributed to the iron deposits on Elba and the possibility of supplementary ore and coal imports.. With the exception of the steel industry center at the ore deposits in northern Italy (Valle d’Aosta, Lombardy), coastal localization has remained the dominant pattern for the metallurgical industry.
Other branches of this industry have also had to adapt to the unfavorable supply of raw materials. The deposits of bauxite, lead, zinc and copper have led to the establishment of facilities for primary processing or further processing. However, as in the steel sector, profitability problems have often been serious. During the 1970s and 1980s, therefore, large parts of the metallurgical industry underwent a far-reaching structural transformation. Several of the country’s leading metallurgical industrial centers (including the Liguria and the Naples region) were affected by closures or sharply reduced employment.
The chemical and petrochemical industries are also dependent on the import of raw materials. With the exception of knowledge-intensive sectors such as pharmaceuticals and sulfur-based processes, Italy has no prominent comparative advantages in the chemical field. Nevertheless, it is one of the most important industries in terms of value added as well as employment. However, the necessity of importing most of the oil demand has meant that coastal location is also common here. Artificial fertilizers, plastics, paints and synthetic fibers are important products that are often manufactured in direct connection to existing refineries or in the country’s leading industrial center.
Workshop industry is at the heart of Italian industrial production. The mechanical industry is multi-faceted and is well advanced in terms of quality and production volumes. Transport, tools and agricultural machinery as well as durable consumer goods are examples of industrial production that has achieved success even outside the country. Weapons and defense systems, ball bearings, electrical products and precision instruments are other important commodity groups. Most of the mechanical industry’s production takes place within the Turin-Milan-Genoa triangle, and not least the car factories established in the region (such as Fiat) are among the country’s largest individual employers. In the 1970s and 1980s, however, a shift occurred to northeastern Italy and to the middle parts of the country.
The textile and clothing industry, whose roots go back to the late medieval wool industry, is concentrated in northern Italy, with a primary center in the Milan area. Thanks to its prominent position in fashion and design, Italy is regarded as the world-leading nation in the field of clothing. Many companies in these industries today enjoy world reputation.
The production of building materials and food is more clearly focused on the national market or regional markets. These industries are also represented in all regions of the country and often form the basis of local business in places outside the major industrial concentrations.
Food production is comparable in size to e.g. manufacture of means of transport or wooden products and furniture. However, this relatively limited contribution to total industrial employment hides the versatility and local importance of the industry, not least in regions with an otherwise poorly developed industry.
Italy accounts for just under 3 percent of total world trade. A long period of trade deficits surpassed 1992-2004. Thereafter, the country again had a period of trade deficit until 2012 when the trade balance again became positive. The negative trade balance is mainly due to an increased oil price.
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Fuels, ore and other mineral raw materials as well as sawn timber and pulp are among the most important import goods. Chemical products and workshop products (including industrial equipment, agricultural and office machinery and appliances), transport equipment, textiles and foodstuffs are also among the largest import groups in terms of value, but in Italy Italy has significant own production and also exports. As a rule, therefore, a significant surplus is recorded in trade in the products of the engineering and textile industries, while exports of chemical products, motor vehicles and foodstuffs do not fully offset imports. Other important export goods are plastic and rubber products, clothing and footwear and non-metallic minerals. Italy’s main trading partners are Germany, France and China. Italy is one of the EU’s least dependent countries on the common market. Only 57 percent of Italy’s exports go to EU countries.
Tourism and gastronomy
Italy ranks fifth in the world as a tourist country with just over 50 million tourists arriving in 2015. The country has hotels with a capacity of just over 2 million beds, which is complemented by the same number of beds in private rooms, hostels and campsites. Revenue from tourism from abroad is approximately US $ 45 billion per year. Most tourists come from Germany, France and the UK. The cultural cities of Rome, Florence and Venice are popular tourist destinations, as is the scenic Naples Bay with the islands of Ischia and Capri. Along the Adriatic Sea, the Italian Riviera and on the many islands are several famous seaside resorts. During winter, resorts like Cortina d’Ampezzo and Misurna in the South Tyrol attract many skiers.
Note: the capital city of Italy is Rome with a population of 2,419,000 (2012). Other major cities include Milan with a population of 1,321,000, Naples with a population of 965,000, Turin with a population of 865,000 , Palermo with a population of 653,000, Genoa with a population of 588,000, Florence with a population of 377,000, Bologna with a population of 372,000 (estimate 2008).
It is common but not correct to talk about Italian cuisine as each region has its own kitchen. A rough generalization of the Italian regions reads as follows: in the south, the pasta, olive oil, tomato, olives, sardines, simple and strong pots with beans and pork, seafood, citrus fruits, herbs, eggplant and figs. In the Roman region, lamb, bird, domestic food, deep-fried fish and artichokes are often offered, in the fertile Tuscany fruits, vegetables and beef. Bologna’s charcuterie and butter-stuffed pasta is replaced in Venice by fish and dishes inspired by Austrian cuisine, in Lombardy by butter-dripping risotto dishes, vegetable soups and osso bucco (veal stew). See also Italian food and Italian wines.