Industry 4.0 and innovation policy: An investigation of SMEs in the Italian automotive supply chain

This article examines the impact of an innovation policy introduced by the Italian government in 2017, verifying whether it supports access to external financial resources by firms interested in Industry 4.0, and the successive improvements in their productivity. Specifically, the policy adopts a set of incentives based on public guarantees and contributions to financial interests, as well as tax shields. Focusing on the Italian automotive supply chain between 2017 and 2020, we compare firms with and without access to the innovation policy, observing the impact of these public interventions on the reported financial constraints. Results denote that firms with access to the innovation policy have 0.86 times less difficulties in funding innovation, suggesting the appropriateness of these incentives. Moreover, if we consider the added value as output of a total factor productivity score, we can observe an improvement equal to 0.10, highlighting the expected positive role of such technologies.