Roland Berger, one of the world's most renowned consultants, told us about a Europe still to be built on Saturday 14 June at the traditional Venice workshops, the flagship annual event of the Council for Relations between Italy and the United States which was also attended by Enrico Letta, Federica Mogherini, Carlo Cottarelli, Mohamed El-Erian and Sergio Marchionne.
Leaving aside the thorny issues of European governance, Berger has rattled off the most significant figures that photograph a continent fragmented in markets and tax regulations, labor legislation and infrastructure, energy and corporate culture. The Old Continent it is the largest economic area on the planet, it produces 24% of world GDP and 50% of social spending. But it is trapped in a deflationary vortex of high unemployment, slowed down by asymmetries that undermine development and exacerbate social tensions.
First there is a general problem of total factor productivity, significantly lower in all European countries than, for example, Japan and the United States, which boast an index of 106, while the major European countries are on average below 100 (Italy is at 92). Only Germany keeps pace with a very good 105.
But the productivity and competitiveness trends – which reward virtuous countries while penalizing others – are part of a historical trend which sees, starting from the early 70s and ending up to the present day, a growing outsourcing of the economy, with the share of world GDP generated by industry falling from 26% to 17%, while services "occupy" an ever greater space in the GDP, from 53% to 66%.
Impressive in this perspective is the data on France, a sensational example of a decline in industry, which has lost 30% of its employment in the last 41 years, collapsing from 5,5 million workers in 75 to 3,2 in 2010. But in some ways it is a path inexorable: this transalpine collapse, according to Berger, is caused for 25% by the outsourcing of services (logistics in the first place), for 30% by an increase in productivity (guaranteed, over the thirty years, by advances in technology, automation, in management), and 45% from international competition (which has led to relocation and reduction of investments).
Even the European figure is no joke: between 2000 and 2012 we reduced our share of world manufacturing by an average of 1,6%. But the exception is Germany, which made it "rise" by the same amount.
If on the one hand deindustrialization is the consequence of historical trends that are difficult to counter, in the long run it risks triggering a vicious circle that must be tackled at the European level: according to Berger, the Union must "row against the tide", pursue growth precisely in a sector that it is contracting.
The vortex of deindustrialization has triggered a loss of return on investment, which has in turn discouraged the updating of industrial assets - which have become obsolete - reducing competitiveness in terms of price and quality. Europe is sitting in a "middle ground" where productive specialization and integration between international value chains are still an unfinished process.
How to get out of the swamp? Innovate industrial policy, promote startups and venture capital, harmonize tax legislation by creating a context in which the "rules of the game" are similar for all players. Focus on districts that already exist, integrating and strengthening them so that they fit better into the international value production chain. But also create fertile ground for start-ups and uniformly incentivize spending on research and development.
There is also the market to be revolutionised energy: just think that the cost for companies in Europe is about three times the American one. They can wait no longer for shale gases, tar sands and carbon capture-storage systems. And a major continental project to implement "smart grids".
Really in ICT Europe has lost shares that are being redirected elsewhere. The symptom is that there is currently no true European champion of the digital economy. This, perhaps, partly explains the bitterness towards Google (could the recent ruling of the Court on the "right to be forgotten" be a consequence?).
Berger reckons they serve at least 1000 billion euros of infrastructure investments to revitalize Europe and propelling a truly competitive market. They should be divided up like this: 270 in telecommunications, 220 in energy, 200 in the water sector and 180 in motorways).
Where to draw to finance them? Not from public budgets, of course, in full recovery, but Berger estimates that compared to a trillion needed there are approximately 170 available worldwide. It's right here – in the capacity of to attract investments e venture capital – that the future of the Union is at stake.
Berger certainly does not spare the unions: one must "making the labor market more flexible with responsible negotiating parties committed to pursuing collective well-being; trade unions and employers must not be ideologically motivated".
Factors are also important cultural: promoting a greater culture of risk and change is essential to get the convoy moving again: in Italy 60% of people think that science causes lifestyle habits to change too quickly, in Greece the percentage even rises to 92%. while in Germany and Anglo-Saxon countries it drops to 45-50%. Potential entrepreneurs in Europe are also much more frightened of bankruptcy than their overseas cousins: Greeks and Italians sit at 59 and 49% respectively, while Americans are at 31%. This also explains the greater availability of venture capital in the United States, which weighs well in relation to GDP 170 more times.
The report indicates a direction, an unstoppable current: that of the fourth industrial revolution, of networks, of interconnection, of big data. A new dimension of global capitalism that offers enormous possibilities, but also subjects players to enormous risks if they refuse to innovate. A new dimension in which those who adapt and bet on the future win by considering flexibility and uncertainty as assets, not obstacles. In this inexorable path, Berger illustrates a map that places Italy in the group of "hesitant“. Germany and Sweden, for example, are "pioneers".
