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Implementing a digital agenda to spur Italy’s economic growth

    • Milan
    • 8 October 2012

          This national roundtable examining the ramifications of implementing Italy’s digital agenda got underway with the participants citing a few statistics on point. Firstly, it was noted that the internet economy contributes 2% to Italy’s GDP – the same as agriculture, but with a potential of at least double that, thus bringing levels seen in England or Sweden within reach for the country. It was then further observed that the introduction of digital technology into business processes in Italy has created 1.8 jobs for every position lost, whilst in the United States and England, the corresponding figure is 2.7.

          These numbers, it was suggested, indicate that there is ample scope for improvement – and all to the benefit of the economy, employment and society. Seizing this potential will once again, however, depend on the ability to rapidly and effectively transform measures put in place by government into concrete action and functional solutions.

          First and foremost, it is crucial to maintain over time both the momentum and the ability to pursue the objectives set. In this regard, it was stressed that although the Italian Digital Agency could play a pivotal role, it will need to be vested with effective powers of governance, essential for its independence from the profusion of current stakeholders. Only thus can existing problems in this area be overcome.

          It was also emphasized that the country’s digital divide stems from an insufficiency of broadband access and a generation gap in terms of levels of familiarity with digital culture. From the point of view of physical infrastructure, determining which technology to invest in and how to go about implementing it will be of utmost importance, so as to avoid administrative chaos and the squandering of capital. From a cultural perspective, there is a need to put new policies into effect, including through the deployment of volunteers, with a view to targeting age groups most affected by the digital divide, and thereby enable them to use the services that are fundamental to engaging in social and community life. Another area of great significance is the planned digitization of the education system, to which end the re-skilling of teaching staff will also crucial.

          One of the biggest challenges will be re-engineering and digitalizing Italy’s public administration, currently prey to a fragmented system, only 20% of which is interoperable, and in which individual authorities, including for reasons of hanging on to power, claim difficulties in pooling information. In relation to this latter issue, the participants pointed to the need for a system that rewards the virtuous whilst penalizing those who fail to comply. Several participants who expressed doubts as to the real possibility of digitizing sectors characterized by very complex procedures were met with the response from others that, in undertaking such a process, the procedures in question could themselves be revisited.

          Yet whilst it was conceded that the public administration has an important role to play, it was nevertheless felt essential that the so-called “animal spirits” of the economy be freed up through the creation of an ecosystem that facilitates the operations of firms capable of exploiting the potential of new distribution platforms. In concrete terms, this translates as the provision of incentives to start-ups, but without tying such schemes to the age of the business owners concerned. Indeed, the participants were at pains to stress that there is a whole world of “over forty” entrepreneurs capable of taking on new ventures and innovating. Support to start-ups should also take the form of rewards for those who invest in such companies, given that the task of nurturing growth in this sector cannot – or at least not exclusively – fall to the state.

          The other economic driver discussed by the participants was e-commerce: a market which in Italy accounts for 1.2% of GDP, but which in England and France is worth at least 5 or 6 times more, with obvious implications for exports. It was hence reiterated that there is ample room for growth, especially in a country where the high concentration of SMEs is in perfect keeping with the expected shift of advertising sales towards local platforms, thanks to the burgeoning use of mobile technology. What better opportunity, then, to focus on marrying this use of digital and handheld devices with traditional flagship sectors such as tourism and Made-in-Italy products. Overcoming mistrust towards e-payment systems, improving the efficiency of logistics, and eliminating tax structures that penalize electronic (vis-à-vis traditional) commerce were thus the watchwords that emerged during the debate on how to revive this sector’s fortunes in Italy.

          In conclusion, it was observed that the creation of an ecosystem in which television, smartphones, tablet computers and PCs communicate with each other on the basis of a common operating system is reshaping relationships between people, and with public authorities and the workplace. Given this inexorable race – or march of evolution – in which content is king, Italy cannot afford to run the risk of remaining on the sidelines or being incapable of reaping the full social and economic potential. After several years of trying and with the country in the grip of an economic crisis, this could probably be the last call for Italy.

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