Knowledge-Based Economy, Structural Change and Productivity: The Italian Evidence

In this paper we investigate if and to what extend productivity dynamics are affected by the transition towards the knowledge-based economy, understood as a process of structural change. We explicitly study the effects of the change in the employment mix of manufacturing and service sectors, and check for the hypothesis of adaptation efforts following such a mutation. The empirical test carried out on a panel data of 20 Italian regions over the period 1981-2001, provide support to the hypothesis of the emergence of the knowledge based economy as a structural change process, deeply affecting the dynamics of productivity. Moreover, innovative activity turns out to be sensibly influenced by the changes in the employment mix, with increasing relevance of service sectors in the second half of the 1990s.