CONCLUSIONS: WHY DON'T WE GROW?
The considerations developed in this paper assume that thehe unsatisfactory development in the years after 1999 is not a specific aspect of the Italian economy, but appears to be in line with what happened to the other two major countries of the monetary union. On Germany one of the most listened to economists expresses himself thus: “…the country seems to have been abandoned by fortune and now seems to lack the wherewithal to encourage its return. From 1995 to 2005, Europe was the world's slowest-growing continent, and, next to Italy, Germany was the slowest-growing country in Europe” (Sinn 2007, p. ix).
For France, the Attali Report of three years ago left out the misfortune, expressly recalling the decline: “Le declin relatif a commence. Au total, en 40 ans, the croissance de l'economie francaise est passee de 5% a 1,7% per annum during
que la croissance globale suivait le chemin inverse […] Notre economie a deux faiblesses majeures unanimement reconnues: une competitiveness declining et l'insuffisance de son reseau de moyennes entreprises” (Commission pour la liberation de la croissance francaise, 2008, pp. 9 and 16).
The problem of growth therefore moves to a higher level. For Italy, the dispassionate analysis of the statistics highlights a deformation of our effective performance in the context of a progressive transformation of the structure which accompanies the "decline" of large companies with the emergence of fourth capitalism companies. The real specific growth difficulties go back to a large extent to the great crisis of 2008 and the slower recovery of the original production levels.
At least in part, this is due to internationalization processes. They continue with important relocations by large companies and are now also affecting medium-sized companies, which tend to satisfy the demand of emerging countries through foreign settlements. By the end of last June, export flows had regained their pre-crisis levels, but we need to consider the increase in imports of intermediate goods and therefore the effect of the unfavorable balance of trade. It limits domestic production (replaced by offshore production) leading to growing debt burdened by financial charges which translate into flows abroad.
The flows of imported intermediate materials will probably increase further (the production of which can be allocated to areas with lower costs), while exports will slow down due to the customs protection policies adopted by the countries with the highest development rate (South America and South East Asia for example). The progress of globalization is imposing a new selection of markets and products; it is probable that Italian industry and our local systems, albeit with heterogeneous dynamics, have the capacity to cope with them.
The methods of statistical surveys, increasingly complex as business networks diversify and extend beyond national borders, aggravate the picture as distort our relative performance; it is not clear to what extent this depends on "our" methods and to what extent on those of other countries.
The question is open, but in the meantime there is agreement in the fact that the deflated values disadvantage the Italian series (Deutsche Bundesbank 2011, p. 17). Difficult from the outside to assess the extent of the phenomenon. Suffice it to say that, if the added value of Italian manufacturing were deflated with the German indices, its annual variation between 1999 and 2007 would pass from the "official" 0,7% to 3,3%; if the indices were the French ones, growth would rise to 4,2%.
An important role is also played by the underground economy (which a rough estimate sets at 32% of the Italian GDP "emerged" which leads to underestimating the annual flow of income. In any case, the fact remains that the annual variations of the product are never made consistent with the levels and it is these, in the final analysis, which determine competitiveness. Another example of "statistical illusion" is the regressive dynamics of the profit margins of our manufacturing when calculated on macro values.
If instead we consider i company data processed by Mediobanca (2011), which exclude small companies as unreliable, it is possible to verify that the share of the gross operating margin on the added value in the years from 1999 to 2007 remained high, oscillating between 37% and 42% (the latter value relating to 2007): profitable businesses do not combine well with the feared decline. The settlement of these complex statistical issues, also with the adoption of unified and community-managed methods, will offer a higher quality numerical basis for the evaluation of our relative growth and the development of more appropriate policies.
In my opinion, the data and indicators presented here demonstrate that the Italian problem is not constituted by an insufficient share of the services component in the production of GDP (which remains heavily influenced by industry, around 60%), nor from a productivity deficit induced by the smaller unitary size of our companies, nor consequently by insisting on specialization sectors that exclude those with high technology. There are those who cite, among the possible causes of our slow recovery after the great crisis, the greater overlap of our specializations with the Chinese ones and therefore greater competitive pressure (Deutsche Bundesbank 2011, p. 29); however, the gap in this overlap with France and Germany (estimated at three percentage points) does not appear sufficient for a definitive answer, also taking into account the different globalization paths of our companies (more offshoring and less outsourcing).
Definitely, the dynamics of Italian industrial production is subject to two pairs of opposing forces: the decline of large firms causes the generation of wealth to regress, while the emergence of districts first and, mainly within them, of the business systems of the fourth capitalism then , push forward.
On the other hand, in the last decade our Mezzogiorno has not been able to contribute to national development with a proportionally greater drive than that of the more advanced areas. Fourth capitalism and the South they remain the strongest levers we have to combat the recessionary trend induced by the great crisis.
Finally, a few remarks:
– Regarding the "dilemma" large companies vs. districts and fourth capitalism, it is perfectly useless to ask which category to prefer. Governor Donato Menichella settled a similar question by expressing himself in Apulian "Chiste so i sunaturi e cu chiste s'adda suna!" (“these are the players and with them it is necessary to play”; Menichella 1986, p. 46). In industry, the "sunaturi" are those that we have analyzed and there are no plausible reasons to believe that they can be replaced in any way in the short term. Therefore it is useless, as well as harmful, to try to "facilitate" dimensional growth with ad fabricam aids. The structure of the company and its capitalization are fundamental tasks of the entrepreneur and it is up to him to decide for the best based on his strengths and weaknesses. If the expansion will be a condition of greater efficiency (or perhaps of survival), the companies themselves will pursue it independently, as duly occurred at the end of the last century with the emergence from the districts of medium and medium-large companies; they have all the capacity to play at an international level thanks to advances in transport and communications, advances which, contrary to what is commonly claimed, favor smaller companies by facilitating a global presence otherwise reserved for large multinationals.
- The crisis and the deterioration of our ruling class has meant that entrepreneurial skills that the country has today are not those that lead to major projects, but rather those that Marcello De Cecco a couple of decades ago (De Cecco 2000), perhaps with excessive pessimism, confined to the “Economics of Candlewick”; but, in the tale of Pinocchio, Candlewick is a negative character because he effortlessly seeks gratuitous amusements which ultimately reduce him to an ass slave to others. Can we say the same about entrepreneurs who have reacted most of the time with sacrifices to the impoverishment of the ideas of the big ones, creating companies that can withstand the competition of the giant multinationals?
– Touching on the subject of economic policy, it is necessary to become aware that development is a long term matter, while jolts and changes of pace are appropriate for actions aimed at settling more contingent phenomena, among which the sovereign debt crisis has now entered forcefully; its arrangement will have unpredictable effects at the moment. From a structural point of view, which is of interest here, the most effective recipes for development appear to be those that focus on human capital and on the services of institutions in the territories, or that produce effects that do not risk evaporating in the innumerable and complex paths of globalization. It is necessary to eliminate the "brakes", leading the few large companies that remain towards national-oriented policies with strong technological innovation (to be measured on the results actually achieved and on the local effects), activate self-sustained growth mechanisms in the South (which make us forget the mere income transfers from which it has so far benefited), to strengthen in their "places" the business systems of the fourth capitalism which today appear as the only and truly effective engine of development; finally, it is necessary to reflect on the services of the public administration whose dynamics we have glimpsed as harbingers of new and important brakes on social progress.
– It remains difficult to think that the foreign activities of our entrepreneurs translate largely into flows that strengthen the Italian GDP, as happens, for example, for Germany. This country makes foreign productions transit through the mother country with the clear aim of maximizing the brand effect by extending it to less "noble" origins; the “bazaar” effect of this offshoring (Sinn 2007, pp. 36 et seq.) translates into a margin which in recent years has in fact represented the entire surplus of the German balance; a large financial availability also derives from the corresponding (strong) balance of payments surplus. In the Italian case, foreign assets come from numerous operators who mostly manage international flows using holding companies and foreign branches where significant portions of the margins tend to accumulate. Here he comes back the unsolved problem of governance. In 1990 Indro Montanelli wrote an article underlining that the Japanese "culture" (which our largest private company set out to imitate at the time) needed some preconditions which were lacking in Italy. According to the journalist, every Japanese has signed precise commitments ("promissory notes" in his lexicon) since birth towards the Homeland, the Emperor, the Family, the School, the Company. So “the term workers includes, animated by the same patriotism and spirit of sacrifice, also the nomenclature of big bosses, big shareholders, big managers. When they are born, they too sign those bills and spend their lives paying them serving the company like all the other employees and without personal participation in the profits, which go entirely to the company, an abstract and supreme entity over everything and everyone”. (The Journal, April 29, 1990). The degeneration induced in financial operators by the Anglo-Saxon interpretation of the "market" introduced by the Maastricht agreements makes us fear that that "culture" is yet to come. But we must hope that from the current difficulties new forces of progress will arise that will give us back, with the phrase that Vincenzo Cuoco wrote in a newspaper a couple of centuries ago, "the confidence in being good and the desire to become excellent".
