The intensity of business R&D in Italy: why reducing the gap with the EU is possible and worthwhile

This note examines the level, trend and size distribution of the R&D expenditures by Italian firms. Comparisons with the performance of the major EU countries indicate that the Italian backwardness in terms of business R&D is mainly due to a declining contribution of the largest firms. Only thanks to an increasing number of SMEs performing R&D and the investments of a group of not too large companies, the Italian performance has not deteriorated over the last years. This suggests that, by means of well-designed and adequately funded policy measures, the goal of reducing the R&D gap with the EU is still possible.