Speaking with the Aspen Italia website team, Andrea Goldstein, Senior Economist at the OECD and an expert in emerging economies, emphasized that “the crisis certainly doesn’t mark the end of the world”. Indeed, despite the problems associated with the weak economic climate, Italy is well-placed to resume the path of growth based on the soft power it exerts even in the world’s highest-growth markets, and which stems from its history, culture, and the quality of its manufacturing products. What’s more, points out Goldstein, “although Italy needs a robust Europe, Europe definitely needs a strong Italy, because it will only itself grow stronger if its core members carry clout and are able to contribute to development”.
Are Italy’s flagship sectors enough to “conquer” emerging markets?
Italy has many strengths that are perceived as such in emerging markets. It ranks among the great industrial powers, and is recognized for its manufacturing excellence. This is important at a time when industrial production seems to have once again become central to the global economy. Machinery, luxury goods, food, handicrafts, industrial districts and the cooperative movement: all these elements combined have helped arouse interest in Italy even in the BRIC countries. Of course, if we look at investments in Italy, the numbers are not as great as can be found in other countries such as the United Kingdom. But Chinese, Indian and Russian investment deals are becoming increasingly more common even in the Italian market, and in the end, a lot of small figures can add up to a real critical mass. To harness all this as a country, however, a long-term vision is crucial.
So is a long-term strategy needed?
I am convinced that Italy will only be able to fully step up to its role if it has a proper idea of what future it wants for itself. Even if the situation is difficult, we must have the courage to think about our future, and bring the issue of medium- and long-term strategy-setting and planning back to the top of the agenda. Italians have managed to do this in the past and we cannot allow ourselves to think that the current crisis spells the end of everything. To understand which direction to take, we can start by looking at the positive ways in which Italy is perceived abroad: our aesthetic sense, culture and “Made in Italy” products are seen as strengths in emerging markets. This translates into the country being able to exert a soft power which, let’s not forget, is associated with good-quality – and often top-notch – human capital. There’s much talk of a brain drain, but such an exodus presupposes the existence of capable and well-trained people in Italy.
Is Italy ready for investment from emerging countries?
On this point, there is an altogether Italian paradox at play: despite a widespread perception that the national market is closed to foreign investment, if we look at certain sectors (banking, telephony, and even air transport come to mind), there is more openness to foreign investors than in other European countries. Of course, in order to make the most of the opportunities that come from abroad, we must first determine which sectors of the Italian economy are strategic and how they should be protected, and then proceed to make Italian firms competitive and attractive to investors. Once again, we must have the courage to plan our future, to have a vision of what we want to be as a country. The goal should be to attract investors who are interested in helping Italian firms grow, who want to “get their hands dirty” and make not just financial but also organizational and relational resources available to open up access to new markets.
Can Italy “conquer” emerging markets alone?
I don’t think so. All the dynamics linking Italy to emerging markets – and the BRICs in particular – must be seen in a European light. Indeed, Italy will only emerge from the crisis if it aligns its fortunes more closely with those of Europe. The paradox, which few (including former prime minister Mr. Prodi) seem to appreciate, is that while Italy needs a robust Europe, Europe also needs a strong Italy, and this is not just because a slide in the country’s economic fortunes create risks and vulnerabilities for all. Italy is a founding partner of Europe and cannot passively wait around for Europe to lend a helping hand. Europe will only be solid if its core members – such as Italy – are stronger, wield more clout, and are able to contribute to development. For this reason, when Europe reflects on its future, it is essential that Italy is able to put forward its own proposals, while knowing how to assert its national interests in the event that these do not coincide with those of other partners.
