The productivity pact proposal outlined by Marcello Messori in theinterview published on FIRSTonline of last September 29, if accepted, it would give the interconfederal negotiations underway on this matter a clear direction of travel. This is still uncertain today also because the government has handed over the issue to the social partners without making explicit its own point of view. The risk, therefore, is that the discussion ends with statements of principle, but without concrete indications. Perhaps this would be useful to support in Brussels that Italy is doing something, but it would not help to concretely address the country's productivity gap compared to our most important European partners. As Istat recently pointed out, this is a worrying gap: in terms of productivity we have grown less than the European average, the modest increase in GDP that was recorded after entry into the euro was due to the increase in employment and it does not give efficiency improvements.
As happened in the early 90s to beat inflation and create the conditions for entry into the euro, even today it is necessary to identify a catalyst that allows the efforts of all economic and institutional players to be concentrated around the goal of productivity growth. In other words, it is a question of making an effort to multiply the number of our winning companies in international competition and to have greater value recognized for Italian work. Productivity grows with the growth of the company size: Italy has too many micro enterprises and this is a serious handicap, moreover we are too specialized in sectors with lower productivity, unlike France and Germany, we have not grown large enterprises in research and development intensive sectors.
Our successful companies (the medium-sized companies of the so-called fourth capitalism) are, in fact, too few to achieve a critical mass. The protection against productivity differentials offered by low wages, in fact, has discouraged a large part of companies from facing the costs and risks of the leap in size and innovation processes. It was precisely the latter that were so deficient as to prevent the exploitation of the benefits potentially guaranteed by information and communication technologies (ICT). Today, in fact, the dynamics of labor productivity and total factor productivity essentially depend on the ability to innovate the organization of business and work. The idea of regaining competitiveness by reducing unit labor costs (UNLC) by compressing wages must therefore be rejected. In fact, in this way aggregate demand would be further reduced and firms would not be encouraged to engage in organisational, process and product innovations. Even the idea that it is enough to encourage the commitment of workers to raise productivity is not supported by the numerous theoretical and empirical works which have instead demonstrated the centrality of technical progress, of the capital endowment per employee, of the quality of human capital.
The proposal put forward by Messori, and discussed in a recent seminar by Astrid, puts in place a strong incentive in the right direction, to increase investments in innovative technologies and adopt the related organizational and managerial changes. With programmed productivity, in fact, the more efficient firms would receive a premium given by the difference between their productivity growth rate and the programmed wage increase rate, while the less efficient ones would be punished by a growing ULC and, therefore, forced to restructure or go out of business.
Productivity planning involves solving a number of complex issues. Unlike what has been done to reduce inflation, it is not possible to think of a single wage growth rate: one must take into account the absolute starting values, sectoral differences, and have the most virtuous European countries as benchmarks. These are not simple insights but they can be done in a fairly short time. The CNEL has already started a reflection on productivity and has activated agreements with ISTAT and the CNR precisely to address problems of this nature.
However, as Messori acknowledges, the proposal is more complex from a political point of view, especially in a phase of severe recession in the Italian economy. Precisely for this reason, an active role of the government is needed, which must play its part even in the presence of stringent public finance constraints. There is the issue of infrastructure, the priority issue of social shock absorbers and, above all, the issue of restructuring incentives for businesses. The incentives, in fact, should be remodeled in favor of companies that have better productivity, that are capable of exporting to more markets, that invest in R&D and human capital. This remodeling should be accompanied by some technological projects capable of enhancing some already existing competitive advantages. No dirigisme, therefore, but an industrial policy capable of leveraging the potential already expressed by the country's production system.
