text: In Italy a shortage of coal led the steel industry to specialize in the use of hydro-electrical energy, exploiting ideas pioneered by Ernesto Stassano from 1898 (Stassano furnace). Despite periods of innovation (1907–14), growth (1915–18), and consolidation (1918–22), early expectations were only partly realized. Steel output in the 1920s and 1930s averaged about 2.1 million metric tons. Per capita consumption was much lower than the average of Western Europe.  Electrical processes were an important substitute, yet did not improve competitiveness or reduce prices. Instead, they reinforced the dualism of the sector and initiated a vicious circle that prevented market expansion. Italy modernized its industry in the 1950s and 1960s and it grew rapidly, becoming second only to West Germany in the 1970s. Strong labour unions kept employment levels high. Troubles multiplied after 1980, however, as foreign competition became stiffer. In 1980 the largest producer Nuova Italsider [now dubbed Ilva (company) lost 746 billion lira in its inefficient operations. In the 1990s the Italian steel industry, then mostly state-owned, was largely privatised. Today the country is the world's seventh-largest steel exporter.