The roundtable got underway with an examination of the twofold characterization of Italian exports that has, for over a decade, been a core theme in public debate over the competitiveness of the Italian economy in the age of globalization – one which sees exports both as a driver of Italy’s growth and, at the same time, as a reflection of the outward-looking nature of the Italian production system. The discussions consequently covered a range of related topics, including the risk of Italy’s economic decline, the need for Italian businesses to reposition themselves beyond the constraints of their traditional size, the difficult relationship between internationalization and delocalization, the possibility of a “return to protectionism”, and the urgency of building networks so as to compete on an equal footing with the new, more dynamic players in the world market.
It was noted that although since 2008 the issue of exports has clearly continued to be central, it is now considered within the context of the impact of the economic and financial crisis on the global economy. Faced with a drop in export volumes of around 20% since the beginning of the recession, it was felt that the imperative for Italy is, above all, to continue in its efforts – embarked on with some difficulty from around 2005 onwards – towards innovation and selective internationalization, under the banner of a new foreign economic policy. This approach – thus far pursued fitfully and with only patchy results – must therefore be put back into service, taking into account, however, both the need to revisit the model in light of changed macroeconomic and monetary circumstances (that is, in a “world without savings”), and the competitive disadvantages that already held back the international performance of Italian businesses before the advent of the crisis.
Three areas of competitive disadvantage, in particular, were highlighted as requiring urgent attention. The first relates to the target market for Italian exports, more than half of which (58%) are aimed at European countries – which according to some simply represents an “internal market”. By contrast, relatively few exports are aimed at macro-areas exhibiting greater dynamism and potential, such as the entire Asian region, South America, and North Africa – areas where Italy has either a poor or uneven market coverage.
The second critical factor is the level of productive specialization of the Italian economy. Niches of excellence in certain sectors (the machine tools industry, in particular) have held up well, and the “Made in Italy” label, despite several recent setbacks in terms of image, continues to be a guarantee of quality for millions of consumers around the world, especially medium- to high-end customers. Nevertheless, there is still a need for Italy to refocus its specialization model, as other advanced countries are doing, towards those higher value-added sectors which, in the long run, will drive global demand. These include not only hi-tech sectors stemming from applied research, but also the “production” of high-potential tangible or intangible goods, such as infrastructure or innovative services linked to the digital economy.
Finally, the third competitive disadvantage factor – perhaps the oldest, and certainly determining the very shape of the Italian production system – is the size of businesses. Indeed, growth in size remains a crucial priority for many firms. However, this goal remains very difficult to achieve due both to a resistance to change still inherent in parts of the prevailing Italian business culture, and to the difficulty of coming up with a framework of priorities as a blueprint for possible amalgamations or mergers.
Within this context, questions arise concerning both the repositioning strategies of individual businesses, as well as the country’s overall economic policy choices. Italy must, in this regard, decide whether to wholeheartedly go in for what for many years has been taboo in the sphere of public intervention, namely: a fully-fledged industrial policy. As regards the management strategies of individual firms, the steps that need to be taken in order to boost exports include, firstly, measures that impact – albeit indirectly – on exports, a case in point being the key role in terms of internationalization played by innovation and capitalization.
Such strategies need to be accompanied by the training or recruitment of specialized professionals, capable of ”reading” the markets, analyzing their potential and weaknesses, guiding investment choices, raising finance, and carrying out any necessary delocalization. They also need to be capable of interacting with economic and institutional actors both in Italy and abroad, developing potential integrated chain strategies with other Italian firms and synergies with the banking and financial system, as well as building networks and creating optimum operating conditions.
Finally, with respect to the policy – and hence, more institutional – aspect, the participants felt it was self-evident that any new Italian industrial policy must come under the umbrella of a broader foreign economic policy, with all that that entails in terms of a mobilization of the Italian international diplomatic network, a renewed role for export agencies in supporting the internationalization of the national production system, and a review of the mechanisms available to businesses, including incentives, the national SME Fund, financing options, and forms of integration with the university and public research sphere aimed at “spawning” innovation.