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Title page

Contents

Foreword 4

Executive summary 7

1. The local dimension of productivity 10

Productivity matters for well-being and inclusion 10

Productivity gaps are sizable across and within countries 12

Regional productivity reviews help productivity policies 'go local' 14

2. Is Trentino losing ground? Productivity trends in the last two decades 16

Introduction 16

Comparing Trentino with international peers 18

Reviving productivity growth is the key to higher income 22

3. The productivity of Trentino's firms 25

Introduction 25

Trentino's productivity gap is mainly due to relatively weaker productivity in the manufacturing sector and in tradeable services 25

Internationalisation can help unlock the untapped potential of Trentino firms 29

Retail and tourism activities need an integrated approach to exploit synergies 31

4. Other drivers of productivity: Trentino's strengths and gaps 33

Introduction 33

A well-functioning labour market that can further benefit from better including women 34

Education levels among the workforce can be boosted 38

Private sector R&D can further leverage publicly supported research centres 40

References 45

Notes 48

Figure 1.1. Regional productivity strongly correlates with worker income and economic inclusion 12

Figure 1.2. Within-country variation in GDP per worker can be as sizable as between countries 13

Figure 1.3. Within countries productivity differences are persistent 13

Figure 2.1. Real GDP per capita has declined since 2001 in Trentino 17

Figure 2.2. Trentino's peer regions 20

Figure 2.3. In 2001, Trentino and its peers rank high relative to their country averages 20

Figure 2.4. Alternative sets of peer regions also highlight Trentino's productivity gap 21

Figure 2.5. Trentino and its peers had parallel trends in productivity until 2001 22

Figure 2.6. Productivity, rather than employment rates, explains Trentino's widening gap 23

Figure 2.7. Trentino belongs to a group of high-productivity regions that have been losing ground 23

Figure 2.8. In Trentino low productivity growth is combined with a growing population 24

Figure 3.1. Trentino requires more productivity growth in the manufacturing and tradeable services 26

Figure 3.2. The most productive tradeable firms of Trentino are half as productive as the most productive firms in the peer regions 27

Figure 3.3. Trentino lacks a productivity premium for large firms in tradeable sectors 28

Figure 3.4. In Trentino there are more small firms and fewer young firms than in the peer regions 29

Figure 3.5. Foreign investments and trade of goods are lower in Trentino than in the peer regions 30

Figure 4.1. Low unemployment rates but low female labour participation 36

Figure 4.2. In Trentino only 37% of workers found their current job through a formal channel 38

Figure 4.3. Persistent gaps in share of tertiary education among Italian and foreign born 39

Figure 4.4. Provincial government push for R&D needs more synergies with the private sector 43

Boxes

Box 1.1. How is productivity measured? 11

Box 1.2. National productivity boards: review and main findings 14

Box 2.1. The fiscal and legislative autonomy of the Autonomous Province of Trento 17

Box 2.2. Trentino productivity knowledge sharing 18

Box 2.3. Selecting peer regions for Trentino 19

Box 2.4. Alternative criteria to identify peer regions 21

Box 3.1. What can small retailers do in an increasingly online world? 31

Box 3.2. The Swiss tourism model 32

Box 4.1. EU Regional Competitiveness Index 33

Box 4.2. Benchmarking drivers of productivity 34

Box 4.3. "Tu sei'' Project: Students' training in Trentino 35

Box 4.4. Stakeholder voices: labour shortages and working conditions in Trentino 36

Box 4.5. Stakeholder voices: addressing the gender gap in entrepreneurship 37

Box 4.6. Stakeholder voices: rewarding continuous training to manage changing skills needs 40

Box 4.7. Stakeholder voices: a "last mile" effort to fully leverage public research institutions 41

Box 4.8. Trentino's Smart Specialisation and Internationalisation Strategy 42

Box 4.9. High Impact Actions to broaden and diffuse innovation to SMEs in regions 44

Infographics

Infographic 1. Benchmarking drivers of productivity for Trentino 9

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