Headlining discussions at this ASL seminar was the observation that innovation – a key factor for growth, competitiveness and social wellbeing – requires that a series of tangible and intangible conditions be met in for it to be given full expression. Only thus – it was argued – will it be possible to harness creative talent, transform flashes of inspiration into concrete outcomes, and support business vision and ideas. The fostering of innovation was viewed, especially at this juncture, as imperative for the Italian economy, which needs to reinvigorate its manufacturing base. More than any single targeted measure, what was seen as required to achieve this end was the activation of multiple levers of change.
It was noted that the development of an ecosystem which fosters and accelerates innovation processes first and foremost calls for the active involvement of medium to large firms. In this respect, the participants highlighted that the lesson which emerges from the most innovative geographic clusters around the world, and primarily from Silicon Valley, is that larger companies are crucial players in the innovation chain, primarily because – as potential buyers of start-ups – they provide entrepreneurs and venture capitalists with a natural “way out” of investments. The size of firms is also linked to the ability to make significant investment in research and development, from which stem further business ideas and initiatives that, through spin-off processes, give rise to new enterprises.
The participants conceded, however, that innovative companies have a high failure rate, with only a few surviving the initial stage and becoming profitable businesses, and – in some cases – major success stories. For this reason, encouraging the emergence of the largest possible number of start-ups was deemed a key ingredient of any national innovation development plan. Yet a fertile pool of innovative new businesses can only be created by enabling access to appropriate sources of finance, both public and private. Nevertheless, it was highlighted that direct public management of innovation financing has not tended to give a good account of itself in most of the countries where it has been attempted. The existence, on the other hand, of an efficient capital market has been invariably linked to the proliferation of new business ventures. Indeed, the stock market is both a vehicle for entrepreneurs and investors to offload investments, as well as an optimizing instrument that allows even unlisted innovative companies to be “priced“, thus facilitating acquisition deals and the raising of private capital.
Naturally, venture capitalists are key actors in the innovation ecosystem. It was acknowledged, however, that their numbers and financial wherewithal in Italy remain below not only those in the English-speaking world, but also those in other European countries more comparable to Italy, such as France and Spain. A realignment and simplification of Italy’s regulatory and fiscal framework for investment in risk capital could – it was suggested – stimulate the emergence of new venture capital players and the influx of foreign investors. Nor should the possibility of forms of public-private partnership be overlooked, which, with mechanisms such as “funds of funds“, enable the involvement of public funders or institutional investors (such as pension funds and social security funds) that have historically been reluctant to engage in this line of financing.
Those in attendance were at pains to stress that if academic research is the cornerstone of innovation, then Italy must move beyond its unproductive diatribes over the choice to allocate funding to “applied” rather than “basic” research, and simply introduce mechanisms that focus available resources on good quality research. It was observed that a cultural attitude and incentive system persists in the Italian academic world which penalizes researchers who launch or associate themselves with entrepreneurial activities, the upshot being that many patents and quality ideas that Italy continues to produce do not translate into new business enterprises, with significant economic growth opportunities consequently missed. While the Italian research sector is characterized by centers of excellence, it was underlined that the country’s manufacturing base is distinguished by small to medium-sized enterprises, which often lack the resources needed to support innovative ventures. In this regard, it was felt that open innovation mechanisms for “networking” on research and development should represent a valuable and important tool for the Italian business community. Yet, in contrast, there seems to be a prevalent culture of not sharing or passing information on about innovative ideas and projects, thus foiling the possibility of finding shared and more ambitious solutions that could benefit everyone involved.
In rounding off the discussions, it was acknowledged that the success of innovation processes depends heavily – and more and more so – on the quality and creativity levels of human resources. But while these are quite high in Italy, there is a lack of a widespread culture of risk-taking and “enterprise”, in part the result of a legal system that attributes a stigma to business failure which is difficult to shake off. More generally speaking, it was observed that there is a cultural approach and an educational philosophy which, unlike those prevailing in the English-speaking countries, is focused on penalizing the non-acquisition of theoretical knowledge rather than on rewarding the development of personal and relational soft skills so crucial to the everyday operation of a firm. Encouraging innovation and entrepreneurship at all levels of the educational cycle, through the integration of curricula to ensure the imparting of not only a scientific grounding but also leadership and management skills, was accordingly seen as an essential step for putting Italy back on a path of stable economic and social growth.