The global economy and Italian businesses: investing in high tech, creativity and design

The global economic scene is suffering from a worldwide slowdown in growth, the effects of the recent American financial crisis, monetary imbalances between the US dollar and the euro and rising inflation due to an increase in the price of raw materials (and not just energy resources). The growing complexity of global economic, financial and monetary scenarios has compelled Italian business and the Italian economic system to adopt a different approach in order to increase competitiveness and growth, in the full knowledge that they cannot ignore the budgetary constraints imposed by the EU and by the Growth and Stability Pact.Although Italy’s performance in terms of growth in GDP and work productivity has been modest in recent years, exports of Italian products have seen a return to good levels, particularly in the 2006-2007 two-year period, thanks essentially to traditional sectors, namely, the four Made-in-Italy sectors of excellence and, of these, the mechanical industry especially. The sectoral specialization model is still that of so-called “cash-cow” products, but businesses have innovated in their processes, products, organization and markets. The quality-price mix has changed, with a renewed emphasis on brands, reliability, design and the combination of form and functionality. Several adaptable multinationals have also established themselves as leaders in global niche markets. Even this is an innovation, underlining the strength of the “fourth capitalism” made up of Italian businesses that have 500 million to three billion euro in turnover. This “innovative transformation” has taken place precisely at a time when many were sounding the death knell of Italian manufacturing as having been ousted by emerging countries with low labor costs. Nevertheless, there is no call for too much optimism given that the international competition is hard on Italy’s heels and work is needed in at least two areas of planning and action: that of businesses and companies on the one hand and Italy’s economic system on the other. In terms of the former, Italian manufacturing now holds new sway which, it should be noted, is not connected to the old-style capitalism of big business but stems from the capacity of new-style capitalism – and of the companies that represent it – to innovate and function in international markets. This also means a change in the potential of relationships with universities and provides a further opportunity for fostering innovative disciplines, particularly technoscience.Italy’s economic system, in other words, economic policies, must put in place adequate tangible (such as transport and energy systems) and intangible infrastructure. In terms of the latter, those that stand out are training and recruitment processes for human capital and the advancement of technological platforms (for instance, nanotechnologies) based also on public-private partnerships. Finally, the crucial role of the banking system in supporting innovative and business-growth processes must not be overlooked.