ICT Adoption in Italian Manufacturing: Firm-Level Evidence

We study the information and communication technologies (ICT) adoption choices of Italian manufacturing firms, investigating the factors, both at the firm and at the environmental level, that speed up or slow down the adoption. We use a survey of 1500 manufacturing firms interviewed in 2001 to monitor ICT investments in Italy. Indicators of the local industrial structure are derived from the National Institute for Social Security database, which covers the whole population of Italian firms. We relate ICT adoption to two sets of variables. First, we consider firm-specific variables, such as size, human capital, the composition of the workforce and organizational indicators that the literature on technology adoption cites as potential factors in determining the optimal rate of investment in ICT. Second, given the network aspect of many ICT, particularly internet-based applications, we investigate whether the local industrial structure affects adoption patterns even after controlling for individual characteristics. Our results indicate that the most important determinants are size, the human capital of the workforce and the presence of large firms in the local environment. ICT adoption also tends to be associated with changes in a firm's organizational structure.