1) Istat has developed a new data framework combining administrative and survey microdata to better measure the multidimensional competitiveness and resilience of Italian firms. 2) Examples show how the integrated microdata can analyze issues like labor productivity differences between firm sizes, the relationship between exports and value added, and identifying strategic profiles of firms. 3) Analysis of short-term trends found that only highly internationalized firms increased both value added and employment from 2010-2013, while conservative firms declined in both.

1. A multidimensional approach for the measurement of
competitiveness and resilience: the design, production
and exploitation of integrated micro level data
Roberto Monducci
Istat – Head of the Department for National Accounts and Business Statistics
Joint IEA-ISI Strategic Forum 2015 and Workshop of the High-Level Expert Group on the
Measurement of Economic Performance and Social Progress
Measuring economic, social and environmental resilience
EIEF, Rome
25-26 November 2015

2. 2
Challenges for Official statistics:
• Preserving relevance in a world of continuous and radical
changes.
• Allowing to assess vulnerability/resilience/competitiveness of
economic systems in a multidimensional context
Traditional classifications schemes and stovepipe production
processes adopted in National Institutes of Statistics (NIS) can
capture only partially the multiple dimensions of economic
resilience of an economy.
New high-quality microdata are necessary to widen and
deepen statistical information on economic resilience.
BACKGROUND

3. 3
Topic:
How the design, production and exploitation of integrated
micro level data, coherent with the aggregate official
statistics, can provide an effective and flexible framework
for the measurement of competitiveness and economic
resilience.
Points:
1) goals and key methodological issues related to the
design, set up and maintenance of the new data frame .
2) some examples on how this data frame can expand our
knowledge on the economic resilience of the Italian
economic system.
3) some conclusions on the policy implications of this
approach.
PRESENTATION

4. 4
…for the analysis of vulnerability, resilience and
competitiveness of Italian firms
New ISTAT approach → two main data sources.
1. Massive use of administrative data (FRAME-SBS).
2. Data collected through specialized surveys.
Frame-SBS
• Register-based approach;
• Multiple administrative and statistical data sources combined
in a single data frame;
• Use of appropriate methodological techniques;
• Output: firm-level structural and economic information for over
4.4 million enterprises (16 million persons employed).
• Main SBS variables obtainable by merely summing-up
firm-level data.
A NEW “STATISTICAL PACKAGE”…

5. THE NEW SBS ESTIMATION STRATEGY
5
Figure 1 – Coverage and components of the Frame-SBS information system
Units ID Ateco NEm Turn NEm PC WS WH SC Y 1
1
Y 2
1
.....… Y k
1
Y 1
2
Y 2
2
.....… Y k
2
Y 1
3
Y 2
3
.....… Y k
3
Y 1
SME
Y 2
SME
.… Y p
SME
Y 1
LE
Y 2
LE
.… Y p
LE
1 LE Survey
2 SME Survey
.
. LE Survey
.
. SME Survey
.
. LE Survey
.
.
.
.
.
. SME Survey
.
.
.
.
.
.
.
.
.
. SME Survey
.
.
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.
. SME Survey
N (4.4
Mln)
BusinessRegister
SocialSecurityData(SSD)
Financial
Statements
(~16% of SMEs)
Sector Studies
(fiscal data)
(~80% of SMEs)
Not covered (~4%)
(~97% of SMEs)
Tax Returns Data
(UNICO, IRAP)
Since 2010 administrative and fiscal data are the primary
source of information, while SMEs and LEs data play a
complementary role

6. 6
Basic quantitative variables included in Frame-SBS are
complemented with a dedicated system of direct reporting
surveys, based on highly qualified samples and focusing on
well-targeted business populations.
MPS, a survey on the competitiveness factors of Italian firms,
is a relevant example.
Main characteristics of MPS:
• large sample (250.000 firms)
• large set of qualitative information on enterprise
behaviour and strategies: Entrepreneurship, control and
governance, Human capital, Inter-enterprises relationships,
Market, Innovation, Finance, Internationalization.
THE MULTIPURPOSE SURVEY (MPS)

7. 7
This combination of qualitative and quantitative microdata
provides a “statistical package” that is particularly informative
for:
a) multidimensional analyses on the competitiveness of
Italian firms,
b) Supporting evidence-based policies aimed to boost
productivity and employment growth.
The two datasets are made available also for research
purposes through the ISTAT “Elementary data analyses
laboratory − Adele
MICRODATA INTEGRATION

8. 8
Empirical examples provided in this presentation:
• show different combinations of quantitative and qualitative
variables (the two pillars of the statistical package already
introduced);
• may refer to both a single or multiple years period.
The longitudinal dimension of SBS frame is important for an
assessment of the resilience and vulnerability of the Italian
productive system.
2010-2014: time span relatively short; hardest period of the
economic crisis; fast change of pace in firms’ organisation
and strategies.
Three examples of the informative potential of Frame-
Sbs
SOME ANALYTICAL EXAMPLES

9. 9
Figure 2 – Value added per person employed, by size classes – 2013 (euros)
Except in micro-enterprises class, in manufacturing and services, the top
25% firms in terms of productivity are more productive than the median
firm of the next higher size class.
1) Labour productivity distribution within firms’ size classes

10. 2) Value added by export propensity and firm size
10
a) In 2013 the value added of exporters (about 80.000 units) accounted for
82% of the total (81% in 2012; 77% in 2010);
b) In 2010-2013 the value added basically grew in exporting firms.
c) The largest increase occurred in firms exporting >75% of turnover.
Figure 3 – Value added, by size classes and classes of export propensity; Manufacturing sector

11. 3) A “wide” distribution of export propensity at sector level
11
Figure 4 – Export propensity by Division of economic activity (2-Digit Nace).
Manufacturing sector – 2013 (Only exporting firms; export to turnover ratio; percentages)
a) In no sector the median export-to-turnover ratio reaches 30%
b) the median value is on average nearly 25 p.p. lower than third
quartile. “There is room to increase exports at the intensive margins
in all sectors” (EC, Country Report – Italy).

12. 5 «PROFILES» IN THE PRODUCTION SYSTEM - 1
The MPS survey allowed to detect 5 strategic profiles:
1. Conservative firms → scarcely innovative, mainly focused
on local sub-national markets;
2. Pocket-sized dynamic firms → compete on production
diversification and product innovation, but their strategies are
mostly focused on sub-national markets;
3. Open firms → operate on international markets, innovative
and well connected in business network,
4. Innovative firms → focused product and process innovations
(but also marketing innovation); their activity is mainly
domestic-market oriented.
5. Highly internationalized firms → operate internationally,
strongly networked, innovative, compete mainly on
production flexibility and product diversification
12

13. 5 «PROFILES» IN THE PRODUCTION SYSTEM - 2
13
A strategy-based evaluation of the firms’ performance in 2010-2013:
a) generally weak labour demand, better value added growth.
b) only “highly internationalised” firms saw an increase both in value added
(+6%) and employment (+0,6%); “Conservative” firms suffered on both fields.
Figure 6 – Median changes in value added and persons employed by strategic cluster, Years
2010-2013 (firms with at least one person employed; % changes)
Highly
internationalized
Open
Conservative
Innovative
Pocket-sized
dynamic Total
-4,0
-3,0
-2,0
-1,0
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
-6,0 -4,0 -2,0 0,0 2,0 4,0 6,0
%changeinvalueadded(median)
% change in persons employed (median)

14. 14
Figure 7 – Domestic and non-domestic turnover in manufacturing sector (index 2010=1000)
Further integrations: to analyse the short-term trends - 1
Since 2011 the Italian economy has been experiencing the opening up of a
large and persistent gap between domestic and non-domestic demand.

15. 15
Further integrations to analyse the short-term trends - 2
Figure 8 – Median percentage changes of domestic and non-domestic turnover in 2012-2014
by cluster (manufacturing firms 20+ persons employed; Green: positive changes in total turnover;
Red: negative changes in total turnover)
Microdata integration with the Monthly Survey on the industrial turnover:
a) the “Innovative” cluster is the only one with positive dynamics on both
markets, while the export growth of “Highly internationalized” firms offset
the decrease in domestic turnover;
b) the “Conservative” firms had the poorest performance.

16. 16
• Economic resilience: new indicators should be included in
the official basket of leading indicators produced by NSIs.
• Lisbon Memorandum (2015 DGINS Conference): new
policy-oriented indicators.
• New data frame developed by ISTAT: register based and
micro-founded approach.
• Full consistency with official figures.
• Natural hub of an open information system that can be
integrated with other variables.
• 2016: set of firm-level further indicators aimed at
assessing the competitiveness and the growth potential of
Italian firms.
• Open system accessible through a dedicated research lab
inside ISTAT.
3) CONCLUSIONS

17. Thank you for your attention
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