Italy has the resources, skills, and opportunities it needs for the development of its cities and regions, notwithstanding the scale of the economic, geopolitical, and social challenges it faces. In today’s difficult environment, however, we cannot merely predict the future: we must begin to plan for it with all due optimism and a careful analysis of the country’s strengths and limitations.
The planning effort must start with infrastructure and the challenges associated with the end of the National Recovery and Resilience Plan (PNRR). Italy is required to maintain the pace of investment envisaged by the Plan (approximately $25 billion per year), even in the face of the growing need to carry out maintenance work on the many road and rail structures built during the economic boom years. The main issue concerns the mobilization of funds: it is estimated that, at the global level, the infrastructure sector will need $106 trillion by 2040 to build new structures and upgrade existing ones. The largest share ($36 trillion) will be absorbed by transport and logistics, followed by energy and digital.
Given the scale and amount of capital required, private involvement will be crucial: infrastructure is an attractive investment class, but in Italy the issue of confidence remains to be resolved. Institutional investors seek stability, clarity, and continuity in political decision-making. They fear the uncertainty often associated with lengthy authorization processes. Simplifying bureaucracy is crucial; however, it is important to note that excessive acceleration of public procurement exercises risks reducing the quality of works and undermining competition, thus depriving the market of sound foundations. At the same time, there is a need for initiatives to improve the skills and expertise of public sector organizations and enable them to collaborate so that they can use those already in place to the best possible effect / with a view to making the best possible use of those already in place. Acting on governance in the post-PNRR scenario therefore means addressing the country’s strategic planning limitations and setting clear priorities.
It will remain essential to work on the many intangible infrastructures and fundamental changes in culture and mindset that will be needed to prepare society for the challenges of the future in a country that remains highly diverse and complex. Given this diversity and complexity, the risk is that standardized development policies would fail to unlock the potential of Italy’s many regions. Three Italies can be distinguished: a metropolitan one, a hinterland, and an Italy that comes somewhere in between. The last-named, made up of medium-sized cities and provincial municipalities, is the least visible and least studied, but has great potential. It must succeed in activating its networks by creating horizontal connections and achieving economies of scale that otherwise only emerge in large metropolitan centers. Fully exploiting its potential will require an integrated vision with the capacity to bring together differences and unique qualities and use them as levers for growth.
In this task of placing Italy’s strengths on a more systematic footing, the country’s ports and maritime sector cannot be overlooked. Italy sits squarely in the Mediterranean, which, while representing just 1% of the world’s sea area, accounts for 20% of its commercial traffic. The importance of Italy’s ports must therefore be underscored: they are the hubs of a maritime economy worth over 10% of the country’s GDP and need to be governed in a manner that, in terms of their interconnections, looks far beyond the local sphere.
At the same time, tourism – which has a direct impact of 13% of GDP, and even more if we include related industries – needs to be reconsidered as a strategic resource, while bearing in mind the risks associated with overtourism. Italy, which boasts a leadership position in high-end tourism, must strengthen its spheres of excellence through training that is fit for purpose and an approach that exploits the potential of the entire country by involving various economic sectors, starting with manufacturing.
If the post-Covid recovery has served to catalyze new resources and new methods for development, the post-PNRR period must be used to consolidate strategies in a complex scenario. The most urgent issues to be addressed are climate and demographics. Italy is highly exposed to climate risks and would need half a point of GDP each year to secure its infrastructure and speedily make up for lost time in implementing important instruments such as the National Plan for Adaptation to Climate Change. At the same time, the country must not underestimate the significant impact on its demographic profile caused by the decline in the birth rate, the ageing of the population, and the brain drain which, given its inability to attract sufficient talent, it has not been able to offset.
Rethinking development therefore means finding new ways for Italy to respond to the pressing challenges of the present and the future. This is a complex scenario in which the resilience of the country’s regions and cities no longer consists just of the ability to withstand crises, but also the ability to build a new, more advantageous balance between the adversities and opportunities promised by the coming decades.