Boosting economic growth in Europe is increasingly acknowledged as a necessary requirement for promoting development and the prosperity of citizens. At the same time, the need to confront – not merely endure – the energy and digital transitions plays an increasingly key role. For example, dependence in strategic sectors needs to be reduced, as it ends up being reflected in tensions over raw materials’ cost and supply, thereby undermining development efforts in various sectors.
These phenomena, framed in a highly complex geopolitical scenario, are directing the attention of policy-makers and Europeans in general to the need to strengthen industrial competitiveness through modern and effective policies. No country on its own is able to face the powerful challenges of recent years, especially given the competition of macro global systems – such as the United States and China – and of other dynamic Asian economies.
European actions and rules must aim to resolve the current fragmentation owed to the EU’s institutional framework. Such measures must be capable of boosting industry without resorting to protectionism, which would only limit trade and development. Most importantly, they must be open to the innovation now transforming many industrial sectors; they must prove capable of producing positive effects for society.
Improvement is called for: new rules must be founded not only on market logic but on deeper assessments associated with the impact of policy on the structure of industrial sectors. Such efforts demand time and flexibility to adapt, confront change and embrace innovation, especially at this historic moment of tightened operational constraints.
It is therefore necessary to make far-sighted choices when it comes to strategic and specialized European sectors, setting policies capable of benefitting the entire country. This also calls for a new method of analyzing the value of an industry that recognizes excellence and expands so as to trigger a transformation that leads to long-term growth. This would make it possible to respond to international competition, generate and incorporate innovation and stimulate demand.
Industrial policy, moreover, is “back in vogue”. Fundamental to rendering it effective is reliable supply and quality of economic analysis, both of which call for a dynamic understanding of phenomena and the ability to assess their often asymmetrical effects on employment, investments and productivity. A structural approach that involves all stakeholders would thus offer a competitive tool capable of improving industrial policies and market regulation.
Italy can make a decisive contribution to advancing the values of European industry thanks to its highly diversified and innovative economic structure. This, as well as its academic tradition and highly evolved industrial culture, represents an advantage for the entire EU. Not to be underestimated, moreover, is the active presence of intermediary entities capable of playing a positive role in the dialogue between institutions and businesses.
Italy ranks second in Europe for manufacturing and fourth in the world for exports, having surpassed South Korea and Japan. Over the past ten years, according to Eurostat data, the added value of manufacturing has risen by 47%, compared with the 36% average of Germany, France and Spain; progress is also clear with regard to skills, an area where Italy has risen by 44% compared with the 31% average of the principle European economies.
Industrial policies are going to be fundamental to preserving this lead and to allowing companies to redefine their business models. Companies must respond to old and new structural gaps, in particular as regards demographic trends and difficulties recruiting manpower. Strategic to that end will be efforts to improve the “productivity” of education, forging alliances between institutions, companies, intermediaries and academia in order to map out the skills needed – by both companies and the public administration – and outlining academic and technical training needs. Moreover, to increase their appeal, companies are called upon to recognize and interpret ongoing evolutions in society; for example, the value that young people now place on factors such as social welfare, time management, independence and personal growth.
At the same time, collaboration with extra-European countries remains crucial – starting with those on the southern shores of the Mediterranean and in Africa. Businesses must be able to hire workers after a period of training that has familiarized them with Italian culture and that offers them a better fit in the work world. This with a view to encouraging exchange – an economic value that is also in the national interest from the standpoint of cultural diplomacy and soft power.