THE DILEMMA OF INNOVATION
Investments in R&D and training increasingly form the basis of a country's development capacity and, at the microeconomic level, the assets that make the difference and qualify companies that know how to look ahead and sustain their competitive advantage in the global context. On these fronts, Italy has a worrying structural gap, in a phase of economic life in which the question of technological innovation arises in an amplified form, while the resources we have to deal with it after the great crisis are considerably reduced. The consequence is that the Italian economy is faced with a sort of innovation dilemma which requires it to "do better with fewer resources", first of all by intervening on the efficiency of the mechanisms for allocating and managing R&D expenditure.
The impossibility of adapting the capacity for innovation makes it difficult to get out of the crisis because it affects the mechanisms, times and rhythms of growth of the economy in various ways, making the gap with other advanced countries persistent. Of course, getting out of the crisis, thinking of remaining as before, would be a lesson lost! The discontinuity effect impressed by the great crisis on institutions, society, the economy and the markets is such that only countries and companies capable of reinventing themselves are able to exploit the crisis as a lever for political-cultural change and for a reset of the development model of the economy and of the business system. The dynamics of global competition has taken on such rapid and unpredictable rhythms and forms of evolution that no country, no region, no company can count on stable comparative advantages.
To play the game of innovation, with new strength, taking into account the specificities and constraints of the Italian context, but also with the firm conviction that the times require us to go further and that there are concrete possibilities of winning the bet of a desirable, possible «Industrial Renaissance» we need reforms and policies that create confidence in the future and activate the potential of energies, talents and manufacturing excellence, of which Italy is rich, through a collective effort to build the institutional and socio-economic environment suitable for a new capitalism entrepreneurial, capable of exploiting the opportunities of the age of knowledge and globalization.
Therefore, the reasons that contribute to giving the issue of technological innovation the features of a new game of innovation are evident and various, both for the changed, challenging competitive scenario within which it must be played, and for the different ways in which innovative processes today they are generated and spread in the most dynamic socio-economic ecosystems. These innovations lead to the need to change research and innovation policies and to bring into play new entrepreneurial energies, including those expressed by innovative start-ups, a reality that is finally developing promisingly in Italy as well.
THE INCREASING NEED FOR INNOVATION
The problem of the competitive and dynamic efficiency of the economy and industry – which with the crisis has come to general attention 15 as an absolute priority – today depends more than before on the capacity for technological innovation that a country and its companies they manage to express and put to good use. At the level of the global economy, we are in the presence of excess production capacity in the manufacturing industry, which drives companies to merge and which is destined to be reabsorbed through a combination of falling prices and the elimination of less efficient capacity, with the prospect that only the most responsive industrial assets that already exist and the new ones that will be created by investing in R&D will be able to survive. The consequence is a Darwinian selection process in the business system which is destined to eliminate the less efficient ones and advance those that have the ability and the human and financial resources to be innovative businesses, capable of reinventing themselves and attracting and making creative and productive talents with high skills.
The possibility of the various European countries to engage the recovery, after the serious crisis of the world economy, is influenced by how they have operated in the past. It emerges eloquently from the EU dossiers that the countries in greater difficulty, including Italy, have invested less in R&D and high technologies, while they have seen the capital produced by less advanced industries and sectors grow relatively more over time, for which recorded a lower average GDP growth rate during the 1995-2007 period that preceded the crisis. The drop in Total Factor Productivity (Tfp) was the reason that most pushed Italy to diverge from other European nations.
In the new global economic scenario, the weakness of the Italian economy is clearly evident, which is no longer competitive in terms of labor costs and at the same time is struggling to become so in terms of innovation. And attempts and artifices to defend situations of non-competitiveness prove to be unproductive which, on the one hand, cannot avoid the loss of parts of the traditional manufacturing industry, where total productivity does not grow, and on the other delay efforts to increase specialization in innovative sectors with a higher rate of development. We are paying for the legacy of an exciting phase of Made in Italy, centered on manufacturing, which makes the opinion persist according to which producing goods is worth more than investing in inventions, patents, marketing and commercial networks.
In doing so, the new paradigms of global industrial organization are disregarded in which advanced countries specialize in the intangible assets of the supply chains, upstream and downstream of the factory, which have assumed a key role in the process of creating and appropriating the overall added value. Being late in implementing these business model innovations, with which to successfully face the cost competitiveness of emerging countries, many Italian companies are on the defensive, with little possibility of getting out of the cul-de-sac in which they are stuck. This sort of "competitive decadence" entails, at the macro level, the impossibility of activating the mechanisms to break and overcome the vicious circle of non-growth, which has long been the real evil of the Italian economy.
LIMITS OF ITALIAN CAPITALISM
Italian companies are feeling the effects of the great crisis, for which they are not responsible, but they are also suffering from delays and negligence - in adapting ownership and financial structures, operating models and organizational structures - which in fact operate as a constraint in making investments to enhance and the ability to innovate over time. In re-reading the contemporary history of Italian industry, one can only be desolate also by the long series of failed or wrong policies that have contributed to passive conservation rather than change.
The great crisis has highlighted some substantial anomalies of our industrial capitalism, in which the weight of small businesses clearly outweighs that of large groups. Considering that the size of the company has seen its importance increase - hand in hand with the raising of the level of financial and organizational resources necessary to innovate and enter international markets -, competitive stability is quite problematic for Italian industry, given the lack of global players and a high presence of undersized companies. The Italy-Germany comparison, in terms of the dimensional structure of manufacturing firms, is particularly eloquent if one considers that the number of people employed in firms with up to 49 employees 17 in Italy accounted, in 2010, for 56,4% of the total and in Germany only for 21,7%; and that those employed in companies with 250 or more employees account for 55% in the latter country and only 23% in Italy.
Furthermore, in the decade 2000-10 this gap increased by a few points. It is difficult to focus on the problem of the "size gap" of businesses and make them perceive it in the right terms, because we have become accustomed to the idea that Italy is the emblem country of small businesses and that at the same time it lacks the conditions for a political context- institutional and business environment necessary to make larger realities vital and progress. Even today there are hopes that the recovery of the economy can miraculously manifest itself thanks to our more dynamic small businesses that export, neglecting the complexity of the problems that condition the recovery of a path of growth of our industrial system.
It is no longer possible to disregard that "whereas previously one could accept, albeit with reservations, the deeply rooted idea in Italy that small businesses - due to the importance assumed by flexibility and agglomerative external economies - could play an important role , today this point of view is not acceptable either from an analytical point of view or from that of economic policy” [Rey and Varaldo 2011].
In the traditional manufacturing system there is a lot of tacit knowledge, embedded in the personnel and in the organization - condensed in a peculiar culture of the product - which is too frequently used at a level that belongs to an evolved craftsmanship rather than a real own industrial organization that aims at efficiency and development. This means that industrial Italy loses many opportunities in the appropriation and full exploitation of its intangible heritage of knowledge, experience and creativity, leaving the door open to larger foreign competitors who lack in these respects, but have high imitation skills and the productive and commercial exploitation of innovative ideas. Therefore, if it is indisputable that the Italian manufacturing industry still has a lot of energy and resources, the truth is that others are growing more and more rapidly.
BEYOND THE PRODUCTION OF SCIENTIFIC KNOWLEDGE
The issue of technological innovation is not only attributable to the reduced expenditure in R&D and its limited impact on the gross domestic product (GDP). It should be noted that R&D is the initial link in the "assembly chain" of innovation and as such must be considered in order to avoid nurturing false beliefs about an alleged elitist dominance of basic research in innovative processes, in isolation from the remaining parts of the supply chain. In the case of Italy, the problem is not the production of new scientific knowledge, where we count on a good position in the international ranking. The real problem is how quickly knowledge is transformed into patents and therefore into innovation, and how we are able to have everything we need, in terms of skills, capabilities and venture capital, to go towards the market.
Only in this way can knowledge – the outcome of research – contribute to activating the innovative processes with which new products, new processes, new solutions and new services are generated. It is a picture of concatenations of factors, investments and subjects that Italy does not know how to put together efficiently. What appears clear is that the research-innovation chain in Italy is structurally weak on the one hand, and on the other very uneven, disjointed and misaligned internally. Therefore, while there are spears of excellence in basic research that remain underutilized, there are technology companies that struggle to find suitable scientific partners to co-create innovation. Not to mention, then, the myriad of small businesses that are outside the research circuits.
Trying to remedy this series of misalignments is what to focus on in order to be able to play the new game of innovation with prospects of success. The gap between scientific production and patenting and innovative capacity, from which Italy suffers, suggests the need to overcome a situation in which public research, of the university type, often lives in a sort of "ivory tower" and the industry, in turn, fails to cooperate with research centers of excellence to qualify and advance the level of the technology platform. The crisis situation in which the Italian economy finds itself must lead to strengthening and qualifying actions to support technological innovation, with a general effort which cannot lack the contribution of the public research system, in which the university plays a key role.
In the new game of innovation, inventors can rarely win alone. The innovative processes are therefore systemic at both sectoral and territorial level, and distributed: we live in the era of open innovation; companies do not innovate in isolation, but draw lifeblood from the complex, dynamic interaction with other economic, social and institutional actors. The effect of the changed nature – systemic and distributed – of innovative processes is amplified by globalisation, which instills competition even in the limited use of resources. This requires knowing how to do better with limited resources (less is more!). Innovation – understood as the outcome of the inventive-innovative and engineering process – includes, in addition to new products and new processes, new materials and components, and above all new services, increasingly integrated with products. Furthermore, innovation is increasingly becoming a cultural and organizational style, an open and creative way of thinking and operating of progressive companies, taking as a model the new knowledge-driven companies, which are mentally and structurally centered on innovation. Market capitalism of the knowledge age is an economic model in which large companies count, but where competition and creative destruction are ensured by many small businesses - start-ups - which take risks and bet on the future and on innovation .
CHANGE POLICIES
If you want to play the new game of innovation, avoiding the risk of losing "at the table", Italy must turn the page. Economic policy, too conditioned by the crisis, must change by shifting attention from finance to the real economy, from supply to demand, from macro to micro. The transition to a real economy policy, oriented towards innovation and growth, is the real challenge we are facing. The recovery will take a long time and will necessarily involve structural reforms and a solid and multifaceted economic and industrial policy, in order to be able to accompany adjustment and innovation processes, responding to a variety of needs and objectives. There is no experience with such demanding policy instruments. And this is a factor of uncertainty in facing a very delicate phase in the social and economic life of the country. The new game of innovation requires essential efforts to update the cultural and scientific bases of policies, given that the themes of innovation and entrepreneurship, dear to Schumpeter, have so far remained on the margins of dominant thought in Italy.
The crisis must offer the opportunity for a breakthrough in innovation, understood as a more general effort to renew and strengthen the foundations of the country's development model, where the manufacturing industry and innovative services, with high added value, must be placed in a position to play a driving role, for the purposes of growth. An industrial policy cannot be invoked generically; it is necessary to change visions and instruments in order to be able to speak of an industrial policy in the proper sense. Only if we are capable of a clear paradigm shift in industrial policy, of a discontinuity, can we hope to counter the declining trend.
It is illusory to believe that a single and sure answer is possible to the problem of technological innovation which has afflicted the Italian name for some time. There is a need for an organic set of reforms and coordinated measures, conducted according to a logic of trial and error, to be defined on the basis of a medium-long term strategic vision, activating the best entrepreneurial energies - old and new – and the necessary financial resources, to be made available jointly between the public and private sectors. The innovative economic systems, children of the age of knowledge, are characterized by a virtuous mix of advanced industries and services, specialized human capital, large, medium and small enterprises, excellent universities and financial and venture capital institutions. These are the ingredients and the actors that make up and make local poles vital with the characteristics and humus to become innovation hubs, capable of generating that set of aggregative externalities that locally feed innovative processes and their continuous renewal, and which are useful in attracting new ideas, entrepreneurial talent and capital from outside. If a political-cultural and institutional leap of this kind is not made, it is difficult to think of being able to play the new game of innovation.
