The Dialogue session got underway with the observation that the world economic recovery has failed to alleviate the social impact of the crisis, with the improving economic situation having no appreciable effect on employment. The participants highlighted that this phenomenon affects both workers in more mature sectors – that is, those most exposed to the consequences of globalization – as well as younger people, who are just entering the labor market. The contagion of jobless growth, evident in Europe and the United States alike, has also started to spread to emerging powers like China, where there is an increasing mismatch between labor demand and supply.
It was suggested during the discussion that, in order to address this situation, new theoretical paradigms and new strategies are required. In the midst of growing concern over global public debt, the employment problem effectively leaves States with rather limited room for maneuver. It was thus felt that, alongside development policies, appropriate social welfare mechanisms also need to be studied. During the more difficult stages of the crisis, strong manufacturing economies such as Germany and Italy demonstrated the substantial effectiveness of social safety nets hinged more on businesses than on workers – a strategy that has prevented valuable expertise from being lost during the recovery phase.
In addition, the good performance of heavily-industrialized economies has led to a resurgence in the appeal of a growth model based on real economic development. It was noted in this regard that Europe, which has maintained a significant stronghold in manufacturing and a certain preeminence in the medium-tech sectors, boasts a better position than the United States. Nevertheless, even in Europe, strategies are needed to incentivize innovation in industry, whilst at the same time stimulating productivity. Indeed, it was stressed that subsidies, if used to support sectors that are no longer competitive, can constitute a curb on – rather than an aid to – the economy.
In order to formulate coherent strategies at the regional level, greater coordination in identifying and adequately supporting the economic priorities of the European Union was seen as vital. As loss of productive capacity through delocalization drives can in many cases lead to a diminution in the creation of innovative processes, reversing this trend requires the deployment by Europe of various mechanisms in support of development and infrastructure, not the least being Eurobonds, regarding which, however, debate is still ongoing.
It was acknowledged that the crisis has redrawn the world economic map: whilst on the one hand it has impacted on Europe and the United States by helping to reduce the gap with certain emerging economies, on the other it has also opened up fractures within Western societies. Italy, in particular, needs to address its problem of youth inactivity accompanied by falling social mobility. In a tough job market like that currently being experienced, it was suggested that the best way to create new sources of employment would be to stimulate – not just economically, but also culturally – both innovation and youth entrepreneurship.
To achieve this objective, it was felt that the country’s education system needs to be geared up to facing the new challenges posed by globalization. Those in attendance pointed to the fact that China itself is rejigging its own educational structures, once very much geared to the country’s role as ‘the world’s factory’, towards models based on higher specialization. In respect of Italy, however, the Dialogue participants called for greater efforts on the part of the education system to respond to the needs of the labor market, furnishing students with technical skills that would both ensure their invaluable contribution to the innovation of Italian businesses, as well as promote youth employment.
