Industrial Specialization and Territorial Imbalance in the Wake of the Crisis. Some Evidence at the Level of Local Labour Systems in Italy

The evolution of the spatial distribution of industrial and service activities across Italian local labour systems before and after the Great Recession (2008-2012) are examined in this chapter. The main aim is to evaluate crisis-driven structural shifts in the regional economy. The analysis is carried out by using static and dynamic indicators of localization (Hirschman–Herfindahl index and Lawrence index) to highlight the degree of local productive specialization and the presence of agglomeration economies that can drive local labour systems’ competitiveness. The most recent crisis affected the Italian production system in its entirety, even if to different extents according to the economic sector, geographical area and firms’ characteristics. For the whole of Italy, regional specialization decreased, albeit moderately; the industry sector was hit the hardest. Focusing on geographical patterns, a North-South divide was detected: Northern districts were more specialized into industry sectors while the South confirmed its attitude towards the tertiary sector. Specialization processes and structural change involved more intensively the South: an acceleration towards tertiarization and the presence of lower frictions due to its intrinsic sectoral specialization concentrated into service and traditional low-medium manufacturing sectors can explain this trend.