Globalization in the balance and the world in chaos: Italy is counting on 6 start-ups

Raise your hand who knows in which African country the postal service works only through drones. Do you give up? The correct answer is Rwanda. And in which city do 95% of money transactions pass via smartphone? Nairobi, where technology has helped reduce shoplifting on the street. This data is not found in an edition of the Guinness Book of Records, but in the Report on the global economy of the Einaudi Center coordinated by Mario Deaglio, professor emeritus of international economics at the University of Turin, as well as former director of Il Sole 24 Ore. And even these digressions, apparently extravagant, serve to penetrate the secrets of the economy in a turning point in which we risk, as the title says, "farewell to globalization".

But even in this situation, hope must be the last to die. From Africa, the report reads, “could arrive something really new, a push to get out of our apparently incurable socio-economic contradictions”. Among the engines of growth in recent years, national investments have stood out, encouraged by the liberalization of internal markets: in 2015, the year of globalization crisis, direct foreign investments in the Black Continent rose to 71,3 billion dollars, with a growth of 7 percent. In short, looking beyond the daily emergency of the boats, one can glimpse a way to prevent the demographic boom from submerging old Europe.

Even so, we can tell the story of the planet on the eve of Donald Trump's inauguration, an unexpected and certainly not auspicious epilogue to a year full of surprises, imbalances and defeats in the attempts to finally put an end to the great crisis. “After overcoming the 2008/09 crisis – says Deaglio – a strong rebound was expected starting in 2013 which, within two years, would bring world GDP growth back above 4,5 per cent, close to pre-crisis levels ”. But it didn't happen that way.

“The actual global growth rate in 2015 was just above 3 percent and is not expected to reach 4 percent even in 2021, in a horizon of global stagnation in which, among other things, it is changing the very nature of work, under the pressure of the digital revolution”. The mix between lack of growth and the Internet with its effects on job demand has helped to complicate many "nodes" in society and politics that are coming to a head.

Thus the disintegration of the traditional political and economic order: “The new mode of production has meant that the American middle class has dropped from 51 to 41 percent of the population. No more than 2 percent has risen, 8-10 percent have slipped downwards, often in a precarious position”. The result? "The Trump's declared protectionism it is, in this regard, a textbook case”. In short, the economic crisis has turned into a political crisis.

And now? “In the coming months, the markets will give confidence to the president's program, with a positive impact for the dollar. We'll see. In the event of disappointment, I would not be surprised by some confusion in Washington, with a negative impact on the currency”. Without forgetting that China is lurking. "Beijing is looking forward to reducing the role of the US currency, to the advantage of greater use of special drawing rights".

It is just one of the many innovations that are looming on the horizon in a moment of strong international discontinuity marked by theemergence of protectionism, a sort of (not youthful) disease of populism. A convergence of interests between the manufacturing powers that base their development on exports, ie Germany and China, with respect to the not improbable axis between Russia and the United States cannot be excluded. In this context, unfortunately, Europe seems condemned to a supporting role. Even at the expense of the future of the euro.

"It seems to me the end of the single currency is highly unlikely. But much will depend on the outcome of the French elections”. But we are not at all sure, adds Deaglio, that Germany is still tied to the survival of the euro in the event that the panorama of international trade deteriorates even further.

In this context, Italy is destined to play a supporting role. “They are no longer so to be despised – objects Deaglio – In New York, exasperated by subway delays, I tried to ask for explanations. I have found that the signaling system is full of holes: just a can of Coke on the tracks is enough to generate a strong delay across the board. In this field, Italy is at the forefront”. Or it was, let's try to object, given that Ansaldo Sts has passed to the Japanese Hitachi. “But it is not said – is the reply – that the arrival of foreign capital in itself signals the decline. In any case, we can boast some recent leadership, such as the agri-food sector”.

However, the GDP does not rise. “It's a mystery given that in the last period Italian families have bought more houses and more cars, purchases that also support other items of GDP. The reality is that the long economic crisis has kicked off a structural changes in consumption and production behaviors, especially for services, which do not go through the market. The role of technology is now central to phenomena such as the sharing economy or services sold online, from travel tickets to insurance and banking services".

It is a difficult world to measure as well as to interpret. “I counted 6 Italian start-ups that could grow in the future. Years ago we had about 6 small and medium-sized enterprises capable of driving Italy towards the future. Some succeeded, some did not. Now let's settle for start-ups”. In short, after 21 editions, the report remains as useful as it is lively. In the hope – concludes Deaglio – that next year we won't have to hold the first report on the post-global economy”.