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Italy’s public sector: a deadweight or impetus for the country?

    • Venice
    • 20 May 2016

          The most common tendency in times of need, in times of crisis – and today is no exception – is to turn to the state. The context, however, is different today. A full-blown Copernican-style revolution is underway in society, the economy, politics and culture. Competitiveness and investments need boosting, the public debt needs reducing and private savings are not in the best of health either thanks to the downturn. The factors that generate productivity need rational reconsideration.

          It is difficult to find terms of comparison in the midst of this revolution, and yet paradigms must change. Spheres where public intervention takes place need to be rethought, along with competition itself in order to stimulate markets and grow the economy. Above all, the state must become the solution rather than the problem. How then is this new “public” paradigm to be defined? In reality, according to many, public intervention – inasmuch as it comes from the state – has joined the ranks of the “dearly departed”; alternatively, it would perhaps be useful and innovative to begin with an interpretation of both “public” and “state” that takes its cue from the modern metropolis.

          Cities such as Los Angeles, New York, Tokyo and Milan are already in the process of identifying the problems they will be facing over the next two decades, and seeking to frame out a vision by which to adequately address them.

          The public sector is unquestionably in a state of disarray, but it cannot remain inert. Indeed, the Italian state in particular must eliminate the industrial system’s competition handicaps, pursue policies calling for new infrastructures, both material and digital, while also letting go any policy conceived solely for the purposes of indiscriminate funding. When a state works properly and plays its role, there are results. The example was made of Spain, whose proper use of European funds earned it a 2% GDP increase. The same can certainly not be said of Italy.

          Indeed, Europe was very much a topic of discussion. Both passionate and tepid supporters confirmed its current widespread perception as, for the most part, an impediment. In particular, calling interventions in the form of guarantees or that are aimed at equalizing the economic conditions of a particular sector “State Aid” was considered unjust and wrong.

          A stubborn north/south divide still hampers Italy, as is confirmed by not only GDP data but also figures regarding competitiveness and revenue. In the resulting face-off between two diverse and divergent Italys, the south is not even able to reap the fiscal benefits afforded it by law. Only the strategic intervention of a “Banca del Mezzogiorno” promises some way to bridge the north/south – or wealth/misery – gap.

          If the state’s role is to remain decisive, there is no question that concrete improvements are needed. While it is true that spending in Italy has been cut and that the Public Administration no longer employs exorbitant numbers (it is more in line with the European average), standard costs, for example, still need to be applied. Yet while there is agreement on their definition, no move has yet been made to implement their general application. Much also remains to be done regarding the quality and age of personnel, with the exception of some peaks of excellence. Emerging after years of stagnation in turnover is the inevitable problem of reorganization and training in new skills. Being prepared for today’s – and tomorrow’s – world calls for rejuvenation, innovation, flexibility and receptiveness.

          Analog, for example, no longer suffices on what has become a digital global scenario. A new ecosystem needs creating in which economic, financial, educational and public sector spheres are capable of coordinating, of speaking the same language and of keeping adequate expectations and necessary equilibria well in mind.

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