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Aspen Collective Mind Seminar – Policies for relaunching the South

Venice, 02/10/2022, Aspen Seminars for Leaders

A nighttime satellite view of the European continent shows Italy, unlike all the other countries, as clearly divided in two: a brightly illuminated center-north – evidence of dense industrialization – in stark in contrast with a sparsely lit south.

Strategies for the promotion of development in the south are urgently needed, starting at the level of both business and public administration competences and virtuous governmental instruments that incentivize value-generating investments. This must go along with simplifying bureaucracy in order to respond effectively and transparently to competition, which calls for rapidity in decision making and project execution – an interpretative logic that will also determine the outcome of the PNRR.

Development in the south is something essential for the entire country, and will be for Europe as well in the future, given Italy’s role as a geographic “bridge” to the African continent; a fundamental geopolitical one even more so in this phase of progressive closure between East and West.

Various economic and social indicators show that the crises of recent years have widened the divide between the south of Italy and the rest of the country, particularly in terms of endogenous growth factors. The population’s average level of education is lower, school drop-out and NEET syndromes are more common and investments are scarcer and R&D, digitalization and the development of infrastructure are more sluggish.

The country’s stalled birth rate is affecting southern Italy as well. The drop in new births and in the number of inhabitants is exacerbating the seriousness of the continuing emigration of young people. This phenomenon is most prevalent among those with medium to high educational credentials and places an additional burden on growth. Manufacturing is what drives development, and various data concerning the South show an entrepreneurialism founded on an excellence that does not always stand out on the statistical charts but is nevertheless of immense national and international value.

Overall production is 35% lower than that of the Center-North, yet in line with the national average for some high-tech sectors such as pharmaceuticals and IT, which is proof that it is possible to develop value chains in a South that innovates and produces. Seaports and logistics are essential resources that could enjoy ulterior growth by leveraging the Special Economic Zones to attract investments.

Tourism, if organized with entrepreneurial vision, has enormous potential, not least in light of the strong interest of investment funds and international chains in realities such as southern Italy that offer a range of opportunities to launch successful international brands.

Excellence therefore is not in short supply; what is needed instead are policies aimed at growing both their number and injecting the investments and human capital necessary to forge a single system of a patchwork of individual enterprises.

There is much to be done, and something for everyone to do – businesses, public administrations and civil society. A helpful exercise would be to review the industrial development phases of the immediate post-WWII period and examine those initiatives that even in recent times have contributed to stories of success.

Forming a network of local excellences, education, innovation and specialization hubs and adopting virtuous investment incentives that actually create value has proven fundamental in the past and will be in the future. This along with other factors that correspond specifically with the spirit of these times.

The first concerns skills, which are as strategic as raw materials to stimulating growth in an innovative and multidisciplinary world. Good examples include big data analysis and cybersecurity expertise, along with all those professional skills needed to ensure innovative and sustainable future factories capable of withstanding a fierce and multifaceted international competition.

Mapping skills by sector and location must be part of economic planning since training and merit are part and parcel of industrial policy. ITSs currently offer positive impetus to the mobilization of public and private resources and the training of personnel in keeping with the local economic structure and the demand it expresses. This is a good practice in need of reinforcement, which has already begun thanks to the PNRR.

The second is the quality of the public administration, which must also be underpinned by new technical (not legal) skills that increase the ability to develop quality projects and to achieve a simple, effective legal framework with a view to avoiding impediments to industrial expansion. 

The third is strategic vision. A complete and rapid about-face is essential after years of stagnation, because this phase is no mere acceleration but rather a veritable quantum leap. Needed is careful leadership, alert to global trends, strongly rooted to the territory and capable of adopting policies that are cohesive instead of contradictory as in years past, while authoritatively coordinating institutions and industry. A collective intelligence tasked with offering the southern Italian system all necessary information and increasing the capacity for growth and development for Italy as a whole.