The Italian economy registered GDP growth of 3.9% in 2022. The picture that paints is of a strong country buoyed by the indisputable resilience of an Italian entrepreneurial fabric that has been able to respond rapidly and with impressive agility to the global challenges ushered in at the start of the decade.
Since prospects of similar growth in 2023 are less promising, the focus needs to be on specific issues now, such as energy supply security, industrial innovation and jobs. The careful and appropriate management of these can play a pivotal role in preserving the competitiveness of Italian businesses and in ensuring a future of solid and sustained growth.
Regarding energy needs, it is necessary in the first place to develop policies that allow Italian industry to benefit from the current availability of multiple supply sources and, in the second place, to work toward aligning their prices to those of the market.
As for innovation, it is essential to reactivate and refinance investments in Industry 4.0, whose momentum from its earliest days spurred the Italian business community to renew industrial processes; to that end, dialogue with national and European Union institutions is urgent, with a view to facilitating the use of the PNRR funds. Indeed, given its lack of direct access to the raw materials market, which would ensure competitiveness and market position, Italy must be able to rely on businesses capable of transforming raw materials into intermediate and finished goods with both technological and creative added value.
Finally, the labor market presents a combination of elements that, as essential factors in improving appeal, call for immediate attention:
- Wage competitiveness is largely penalized by Italian industry’s labor costs, which are higher than those of competitors in other EU countries. Necessary therefore is a mechanism by which to lighten the tax burden on the wages of young people. One proposal in that regard could be to structure a 5% flat tax on certain categories of workers, particularly in their first five years of employment; a measure that would help not least to discourage the emigration of young and highly-skilled workers otherwise known as “brain-drain”.
- The current “demographic winter” and attendant negative birthrate, to which passive immigration is only a partial solution, calls for the development of specific, active social welfare policies aimed at supporting families by safeguarding the various career stages of their components, with a view to inverting this dangerous trend.
It is also clear that, since they are best qualified to do so, companies can and must play an active role in tapping young resources, in particular by:
- building and strengthening partnerships with academic institutions – ideally from the early secondary school stage onward – with a view to establishing a direct dialogue with students that makes it possible to offer them insight into the job market, the skills effectively needed to compete on it and the range of existing professional training courses;
- spearheading attempts to bring supply and demand into alignment in response to the spreading professional mismatch phenomenon. It thus appears paramount that learning institutions and industry install a dialogue aimed at fostering provisions for the launch of new forms of training and an overhaul of existing ones, with a view to channeling energies and human capital resources to where they are most urgently needed.
The problems that stem from the management of those young people that have already entered the work world are different, however. This is especially true as regards companies’ optimization of talent and their ability to retain it. Indeed, apart from the issue of wages, what comes to the fore is the absence of young people’s real involvement in company decision-making processes and related assignment of responsibilities, particularly at initial career stages. Thus, an interesting and innovative management strategy could consist of putting upper management more in touch with young talent, allowing the latter to actively participate in work groups; this would result in the mutual benefits of opening innovative prospects as well as enhanced managerial experience.
Finally, the country’s startup ecosystem undoubtedly needs constant nurturing. A natural magnet for new skills and pioneering business approaches, that system is capable of offering streamlined and easily navigable organizational structures as well as fast-track career paths with continuously evolving responsibilities.