Economy

Italy began to industrialize late in comparison to other European nations, and until World War II was largely an agricultural country. However, after 1950 industry was developed rapidly so that by the 1990s industry contributed about 35% of the annual gross domestic product and agriculture less than 4%. The principal farm products are fruits, sugar beets, corn, tomatoes, potatoes, soybeans, grain, olives and olive oil, and livestock (especially cattle, pigs, sheep, and goats). In addition, much wine is produced from grapes grown throughout the country. There is a small fishing industry.

Industry is centered in the north, particularly in the “golden triangle” of Milan-Turin-Genoa. Italy's economy has been gradually diversifying, shifting from food and textiles to engineering, steel, and chemical products. The chief manufactures of the country include iron, steel, and other metal products; refined petroleum; chemicals; electrical and nonelectrical machinery; motor vehicles; textiles and clothing; printed materials; and plastics. Although many of Italy's important industries are state-owned, the trend in recent years has been toward privatization. The service sector has growing importance in Italy; by the early 1990s it employed well over half of the labor force.

Italy has only limited mineral resources and has consistently increased its mineral imports; the chief minerals produced are petroleum (especially in Sicily), lignite, iron ore, iron pyrites, bauxite, sulfur, mercury, and marble. There are also large deposits of natural gas (methane), and much hydroelectricity is generated. Italy, however, is still greatly dependent on oil to meet its energy requirements, and most of it must be imported.

Italy has a large foreign trade, facilitated by its sizable commercial shipping fleet. The leading exports are textiles and wearing apparel, metals, machinery, motor vehicles, and chemicals; the main imports are machinery, transport equipment, chemicals, food and food products, and minerals (especially petroleum). Tourism is a major source of foreign exchange. The chief trade partners are Germany, France, the United States, and Great Britain. The nation has greatly improved its highway system in the postwar years, especially in the South.

Italy's economy has deceptive strength because it is supported by a substantial “underground” economy that functions outside government controls. Despite significant government progress in the 1990s in its war against organized crime, the Mafia continues to exert a strong influence in S Italy, often hindering governmental programs aimed at integrating the region more fully economically and politically into the national scene. The spread of drugs has become a major problem in Italy, which has the highest incidence of drug addiction in Europe.

The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2007, Columbia University Press. All rights reserved.

• • Cite
  • Print