Like all advanced capitalist economies, Italy is quickly moving away from its traditional economic sectors to become predominantly services-oriented, although the economic importance of the industrial sector is higher than the EU average. Agriculture accounted for 2.5 percent of the GDP in 2000, while industry and services accounted, respectively, for 30.4 percent and 67.1 percent of the GDP. Italy has recovered from the economic recession of the early 1990s in part through its efforts to develop the service sector even further. Services both to commercial enterprises and private individuals have grown in importance, while the relevance of the agricultural sector continues to decline. In the south, tourism is
The manufacture of machinery, motor vehicles, clothing, footwear, and food processing are the main industrial sub-sectors. Many of these enterprises manufacture goods almost exclusively for foreign markets and must, therefore, monitor international economic changes very carefully. These companies are largely concentrated in the northern regions and are often small or medium in size. More often than not, they are also family run, and the business is kept within the family for generations. The
An interesting aspect of Italian economic development is the increasingly important role that small and medium enterprises have come to play. These companies are often family run and can count on a well-qualified and dedicated workforce. They receive extensive support from local government and are well integrated into their communities. These complex business networks are known as integrated industrial districts, which means that almost every company in the same geographic area makes the same products, or necessary components for those products. This pattern enables all companies in the integrated district to share a common distribution network and to take delivery of energy resources or raw materials in huge amounts in one place. The system cuts costs to business and helps them to compete in the international markets. Thus, for example, the northern area of Friuli is renowned for its furniture making factories, the region of Marche for shoemaking, and so on.
Italy's employment statistics reflect its economic trends. The agricultural labor force is steadily diminishing (down to 5.5 percent of the total workforce in 1999), and industrial employment is also shrinking due to the impact of the new economy (to 32.6 percent in 1999). The service sector employs the largest percentage, 61.9 percent, of the Italian workforce. During the 1993-95 recession, the industrial sector went through a painful period of restructuring and many jobs were lost. Older workers were offered the option of early retirement, while others were enrolled in retraining programs. A substantial number of jobs were saved by the introduction of the social partnership plan.