The Observatory on productivity and well-being set up at the Fondazione Economia Tor Vergata will be officially inaugurated on 13 April. The Observatory aims to make policy-makers, administrators, businesses and civil society aware of the problem of low productivity in Italy which does not allow the growth we need for the well-being of all members of society. Boosting productivity is a problem to which the business world and the next government, whatever it is, will have to find innovative solutions unless resorting to more immigration or raising the retirement age.
Speakers during the launch: E. Canton, responsible to the European Commission for the implementation of the National Committees for Productivity, Gloria Bartoli (LUISS), M. Bugamelli (Bank of Italy), G. Galli (Luiss School of European Political Economy ), Luigi Paganetto (President of the Tor Vergata Economics Foundation), B. Quintieri (President of SACE)
In Italy, the dynamics of total productivity is among the weakest in the Eurozone and is the main determinant of real growth. Productivity growth would be a positive signal both for the unemployed and for the financial markets, which worry more about public debt the lower the growth and its prospects.
For aggregate productivity to start growing again, le necessary measures are far-reaching: from the integration of companies, even small ones, in Global Value Chains (GVC) to other forms of international connectivity, to the coordination of investment in basic research and R&D, to incentives for innovation and skills improvement. They also include a taxation of research, business and labor which encourages investment and employment.
All these measures depend on institutions which allow the optimal allocation of resources which in Italy requires a reform of civil, administrative and criminal justice and of public administration, but also the implementation of new laws on bankruptcy, new macro-prudential rules suited to the country's financial system and a system of transport that facilitates mobility. The link between total productivity and the economic cycle must also be investigated and the relationship with the sustainability of the public debt.
To respond to the slowdown in potential growth that has been taking place since 2000 also in the European Union, the European Commission and the Council with a recommendation of September 2016 invited the countries of the Euro Area to form National Productivity Boards (NPB) or national committees productivity measures by March 2018. The NPBs will have to analyze national developments in productivity and competitiveness and advise on the reforms necessary for the increase and convergence of the growth of European economies. The Observatory also intends to help the NPB formation process by disseminating information, analyzes and experiences on the most effective measures to restart productivity growth in Italy.
For the recovery of total productivity will also be important new technologies IT and communication: the global financial crisis first and the European crisis immediately after caused the collapse of investments in Italy which was therefore able to profit only partially from the first technological revolution (ICT). But the second technological revolution with disruptive technologies such as artificial intelligence and big data it already has a growing impact on the activities and strategies of companies.
These developments not only impact corporate productivity and profits, but also workers in the global economy, requiring governments to provide the means for technological change, as well as international integration, to benefit all, which is a necessary condition for the sustainability not only of growth, but also of democracy.
