Traditional Smes and Innovation: the Role of the Industrial Policy in Italy Entrepreneurship

The aim of the paper is two-fold. Firstly, it analyses the Italian aid programmes for innovation and technology and, in particular, the role of the regions according to the more recent theoretical framework. The second aim is to match the Italian SMEs needs for technological innovation and the state and regional aid programmes. Two empirical research programmes carried out at Ceris-Cnr (Institute of Economic Research on Firms and Growth – Italian National Research Council) confirmed that the approach to innovation of Italian SMEs tends to satisfy the demand of the existing market through incremental processes. The most common way of introducing new technology is by purchasing of new machines and equipment to reduce costs and improve quality. All the industrialised countries tend to favour the linking of SMEs with external sources of knowledge. The paper shows that in Italy such a policy clashes with the SMEs’ capacity for absorbing innovation. Most of them lack the technical structures (technical office, design department, R&D laboratory, prototype department, etc.) and the graduate staff capable of interfacing with the research world.