Firstly, there is Dualism “which has resulted in a north-south divide in GDP per capita and in labor market performances” (Destefanis 7). This divide “means that there are a substantial amount of members of the population living in areas of the country that are considerably poorer than the national average” (Destefanis 8). The divide between the North and the South in Italy is “far more serious than in other countries with similar levels of income per capita” (Destefanis 8). The people’s need to generate a living has established “large presence of a ‘hidden economy’” (Destefanis 9) within in the South. This “hidden economy” is a cash based economy that exists due to non-governmentally regulated businesses. Cash based work and the existence of the “hidden economy” is largely documented in the South, where the workforce is “characterized by the highest proportion of irregular workers across all sectors” (Destefanis 9). The second major challenge for Italy is the lower productivity rate caused by family-run businesses throughout the country. Since 1992, the economy “has been growing at a much slower pace than previously in the post-war period” (Destefanis 7). This slow pace staggered the economy’s development and has affected both “the investment in R&D and human capital” (Destefanis 7). In order to compensate for the staggering economy and slow paced growth, Italy required
Firstly, there is Dualism “which has resulted in a north-south divide in GDP per capita and in labor market performances” (Destefanis 7). This divide “means that there are a substantial amount of members of the population living in areas of the country that are considerably poorer than the national average” (Destefanis 8). The divide between the North and the South in Italy is “far more serious than in other countries with similar levels of income per capita” (Destefanis 8). The people’s need to generate a living has established “large presence of a ‘hidden economy’” (Destefanis 9) within in the South. This “hidden economy” is a cash based economy that exists due to non-governmentally regulated businesses. Cash based work and the existence of the “hidden economy” is largely documented in the South, where the workforce is “characterized by the highest proportion of irregular workers across all sectors” (Destefanis 9). The second major challenge for Italy is the lower productivity rate caused by family-run businesses throughout the country. Since 1992, the economy “has been growing at a much slower pace than previously in the post-war period” (Destefanis 7). This slow pace staggered the economy’s development and has affected both “the investment in R&D and human capital” (Destefanis 7). In order to compensate for the staggering economy and slow paced growth, Italy required