The participants in this seminar observed that after the shock of the crisis, the economy is searching for ways and means of coming out of the recession with a new model for growth. The first signs of recovery are raising hopes everywhere that the worst may be over – even in Italy. However, despite indications emerging from the financial market, the impact of the crisis on the real economy and employment are far from being a thing of the past. Those paying the price are, in particular, the labor market and SMEs, both suffering from a corollary problem of finding resources due to the difficulty of gaining access to (personal and business) credit, but also owing to deeply-entrenched systemic lags, which the crisis has only served to bring back to the center of national and international debate.
It was noted that even before the collapse of global finance, the Italian economy grew at a slower pace than those of its European partners. Public debt, an infrastructure deficit, the North-South divide, low productivity, excessive income taxation, intractable wages policy, a lack of social mobility, administrative and bureaucratic rigidity and political instability are just some of the factors of competitive disadvantage that, before the crisis, led some to predict the certain decline of the Italy’s economic and production system. Whilst this decline has not eventuated, with Italy’s economy proving to be more robust than others (thanks to an extraordinary propensity to accumulate personal savings and a show of responsibility on the part of social partners in the area of industrial relations), the problems to be resolved essentially remain the same. These include a social welfare system that is obsolete and ill-suited to meeting the new needs and expectations of a society undergoing profound transformation.
Indeed, as it currently stands, the Italian welfare system is unbalanced in terms of the distribution of resources and unfair in terms of rights protection. This is demonstrated by the overall allocation of Italian welfare expenditure, which, although quantitatively in line with the average for EU countries, sees more than 87% of resources allocated to just two areas – namely, pensions and healthcare – to the detriment of all other areas of intervention (including combating unemployment and social exclusion, family policies, disability and non-self-sufficiency, and housing), which account for less than 13% of the total. This distribution reflects and exacerbates the “demographic paradox” of a country that is aging but not growing, highlighting the impact on the long-term sustainability of the Italian welfare system of a whole series of imbalances that come under the umbrella of what for succinctness might be called the 3 ‘G’s, that is: gender-related, generational and geographic (North-South) disparities.
In light of this, and in the context of an overall financial situation that makes it difficult (if not entirely impossible) to adopt any plans requiring major public expenditure, it is clear that attention needs to be focused on the quality of expenditure, the correction of inequalities, and the necessity of boosting the resources allocated to the so-called underutilized areas of the country. It would seem that there is almost unanimous agreement as to the mix of solutions most suited to Italy’s circumstances, and the desirability of welfare reform aimed at achieving a new expenditure balance across the various generations, equal opportunity and convergence between the various areas of the country. There also seems to be agreement on the need for a change in perspective, moving away from a conventional vision based on the welfare state to one rooted in the welfare community, where “active society” is considered an economic actor in its own right, on an equal footing with the traditional state-market duo.
The participants proposed that the three problem ‘G’s could be addressed constructively by three countervailing approaches based on: social solidarity, a goal that is more dynamic and comprehensive than mere social welfare; subsidiarity, understood in its proper sense as a vehicle for co-ownership of the governance of economic and social processes; and development, representing a more ambitious and far-reaching objective than economic growth alone. Seen from this perspective, local communities play a key role, both as a frontline for efforts to promote cohesion and as drivers of national economic growth. Indeed, the local community level is the most conducive to building networks, as demonstrated by the experience in Italy of industrial districts, business clusters and local consortia. It is also attested to by the positive impact that a banking and finance system rooted in local communities throughout the country has had, during the crisis, in facilitating the difficult relationship between banks and businesses.
The participants concluded that, today, competitiveness and cohesion and growth and equity are complementary and indispensable objectives both globally and locally – and this will be even more the case once the crisis has passed. The business world and the labor market – together with their rules, their performance levels and the interaction between their participants – continue to be the testing ground for the right recipe for future growth. The ingredients in this recipe include tapping into unrealized potential, such as the female workforce, genuine talent in universities and the integration of immigrants. They also include fixing elements that do not work, such as regulatory stratification (dressed up as deregulation), and the welfare benefits system, which currently curbs the emergency but does not put in place virtuous cycles that could lead to reintegration into the workforce. Finally, there is a need to support the growth in size of businesses (especially medium-sized firms), and to boost productivity through administrative and managerial innovation. Ideally, this will all be undertaken constructively by a system that – in conjunction with the major reforms the country is in need of – will revive the spirit of public interest and rediscover the ability to forge “constitutional deals” aimed exclusively at building a fully sustainable future.