Opening proceedings at this ASL session was the observation that industry is once more the focus of economic growth strategies in the major advanced economies, having been so all along in emerging markets. Taking off first in the US, this approach has recently gained purchase in Europe as well, such that industrial policy, which until a few years ago was considered old hat, has again become key in the formulation of economic policy strategies.
In the light of this comeback, the seminar participants thought it opportune to examine what lies ahead for Italian industry today, the principal challenges to be overcome in the face of increasingly fiercer and faster-paced global competition, the strengths that Italy should play to, and the weaknesses that need to be remedied. In a discussion that saw the participants revisit Hirschman’s paradigm (as outlined in Exit, Voice, and Loyalty), loyalty emerged as the overriding consideration, manifested as a desire to contribute to the industrial and economic revival of the country.
Using a factor analysis approach, a number of enabling and disabling factors were identified at both an industrial and institutional level. Italian industry today was seen as simultaneously contending with the challenges of globalization and digitization, against the backdrop of the reference framework mapped out by European strategies. Put to the test by the most profound economic crisis since World War II, Italian industry was judged as having held up well, despite the losses of recent years in terms of jobs, numbers of firms and value-added. The resilience of an industrial system hinged mainly on medium- and hi-tech sectors was gauged against its ability to successfully internationalize and to focus on innovation and creativity in order to remain globally competitive. It was felt that the result today is reflected in Italy’s non-energy trade surplus figures, a share of exports in international markets that has relinquished much less to the Chinese behemoth than most advanced countries (excluding Germany), together with world trade rankings that see Italian firms achieving or maintaining leading positions in various product sectors and which place Italy second only to Germany in Europe. It was conceded, however, that one of the main limitations of the Italian industrial system is the size of its constituent firms. In this respect, the potential growth trajectories pursued by several of the industrial success stories considered were viewed as pointing to three possible paradigms, namely: growth through internal development within a firm, growth through mergers and acquisitions targeted at achieving a variety of aims (ranging from financial- to innovation-based expansion), and finally, growth by becoming part of a large multinational conglomerate. It was stressed that, whichever the chosen route, what matters is a spirit of openness, without which there can be no innovation or growth.
In terms of factors of production, the participants recognized difficulties involved in accessing credit, stemming from the fragmented state of the Eurozone’s banking and financial sector, as well as from excessive energy supply costs. Just as with the credit access problem, the solution to which was viewed as resting with the launch of the European Banking Union, it was suggested that the problem of energy costs calls for the formulation of a plan for robust European-level integration. Remaining on the subject of inputs and their overall productivity, special emphasis was placed on the role of human capital, and, in particular, on the process of training through the different stages of primary, secondary and tertiary education, as well as lifelong learning. In this regard, Italy was seen as exhibiting both strengths and weakness. On the one hand, it boasts an educational system which, despite certain shortcomings, produces excellent graduates, but at the same time it suffers from a heavy mismatch between skills and industry needs. This – it was felt – is not merely a question of universities churning out more engineers, but also a matter of promoting the same kind of dual vocational-technical training model that has played such a key role in the success of German manufacturing.
Turning to consider the main disabling factors, the participants felt that these were mostly to be found at an institutional level, with a system that gives the impression of being more intent on imposing constraints than fostering the competitiveness of its firms. This would appear to be confirmed by international statistics on the ease of doing business, which continually see Italy ranked among Europe’s worst performers. It was noted that rather than pursuing a long-term strategic economic and industrial policy vision, the Italian political and institutional system instead seems to be geared towards producing mutual inertia, stemming in part from a fragmentation of responsibilities that has been exacerbated by amendments to Title V of the Constitution. There were accordingly two suggestions which recurred persistently during the course of the debate, namely: the need for regulatory simplification as well as regulatory stability. The participants invoked the economist Pietro Verri in this regard, who exhorted: “May [the legislature] make it a rule to promulgate clear, precise and inviolable laws, so as to be observable in whole by every taxpayer”, while the philosopher Beccaria bade: “Let laws be made that are consonant with reality and civil disobedience will cease”. In conclusion, it was remarked that only with sound laws and institutions will the creative and innovative energies at the country’s disposal be unlocked to their full potential and the economy returned to growth.