Profile Since World War II, Italy has developed from a mainly agricultural society into a world industrial power. The economy is characterized by a large state sector, a mass of family-owned businesses, relatively high levels of protectionism and strong regional differences. Compared to with other G-7 economies, Italy also has relatively few multinationals. City, and regional authorities also own utilities, banks, and other businesses. Family-owned businesses, the backbone of Italy's private sector, include Fiat, whose interests include aero engines, telecommunications, and bioengineering, as well as cars.
Similar businesses tend to congregate.
This geographical specialization encourages local competition which has translated into national success. The Mezzogiorno remains the exception. State attempts to attract new investment have met with success in areas immediately south of Rome, but elsewhere organized crime has deterred investors and siphoned off state funds. Anger at the misuse of state funds in the south has been a powerful factor in the growth of the Northern League with its demands for autonomy. One-third of Italian tax revenue is generated in Italy's industrial heartland of Milan.