Productivity and employment are slowing. Smallness is not conducive to research and development, which is indispensable for technological innovation and international opening, both crucial factors in competition between national economies. In the last decade Italian industry has also been impoverished by the loss of important branches of manufacturing. The Italian car industry has encountered serious problems.
The market share of the largest group, after peaking at 60 per cent in the eighties, fell to 27 per cent in 2003; since the end of the 1980s its European market share has declined from 15 to 8 per cent. The main source of difficulty was a strategy of diversification that ultimately diverted resources away from R&D in the auto segment.