SO WHAT TO DO
In order for the Italian economy to recover the lost positions, it is first of all necessary to put our companies in a position to increase their average size. Which doesn't mean that everyone has to do it, let's clarify right away. Some of them, those that have the concrete market possibility, must be able to grow a lot, jumping into the higher dimensional category: large, if they are average; medium, if they are in the small one. This is not happening at the moment, or is happening to an insufficient extent.
But why is the average size of Italian companies asphyxiated and static? Are they phenomena inherent in the country, with its society, with its history? Perhaps not, given that they are relatively recent: up until the XNUMXs Italy boasted numerous large companies, which have since died or shrunk. Perhaps, on the other hand, it depends on factors surrounding companies, which are an integral part of national history: the legal system and the conditions that derive from it (legality, competition, efficiency of the public administration); the education system. And perhaps it also depends on the financial structure of the country, with the strong dominance of the banks.
They are confirmations of situations already observed and debated in the past, even if we put them all together so that they form an organic picture. But the relative novelty is that, in the long recession that has occurred in the meantime, a piece of our economy has incredibly held up under the crossfire and sometimes friendly fire, internalising the diseconomies of a country without: without system enabling factors. It is our excellence, but a partial and confined excellence, which does not create "standards". The successful companies have become successful in spite of the country, the losers because of it.
The novelty is relative because we are talking about phenomena that had already emerged before the crisis, precisely because of the selective action of the "enabling factors". But the long recession caused them to explode, due to the operation of a classic Darwinian selection: the least productive firms left the market, the best survived. Let us then come to the role of public policies. It's a really important role, it bears repeating. An importance that goes beyond the superficial conviction that exists in public opinion. The fact is that what prevents companies, or at least those that already could, from making a leap in size, therefore from becoming less family-oriented, more productive, more innovative, are factors largely under the control of the public authorities. System enabling factors, but also incentives/disincentives that influence the behavior of individual entrepreneurs.
In other words, what JF Kennedy defined in a speech over half a century ago as "the wave that lifts all boats": transposed into today's Italy, an organic policy that improves the general climate in which entrepreneurs and businesses live. The first and most important reform concerns the legal system. It does not only concern the rules that regulate the functioning of the judicial machinery or even the entire public administration, but precisely the entire legal system. Which must be made more consistent with the functioning of a modern economy, of businesses, of efficiency.
It is a reform that does not cost the public finances anything, indeed it probably allows substantial savings in public spending. Yet it is a very difficult reform in this historical phase of anti-market and anti-efficiency obscurantist ebb. Not only are the majority of insiders opposed to it - lawyers, magistrates, legal operators of all kinds - but vast sections of the population, each paying attention to the protection that such an order sometimes offers them, but without taking into consideration the costs that it imposes on everyone. A reform that is possible only from within the legal profession, by enlightened people, of which there is certainly no shortage.
Some rubble of the old plaster has fallen in recent years, with the tiring and even incomplete reforms of justice and public administration; this gives hope for the future. All possible progress on the fronts of legality would ensue,
of competition between producers and private distributors on the market, of the efficiency of public administrations. The system that produces the rules and their application is the key institution of a modern and advanced country. But it is built over the centuries, so that it evolves in accordance with the times is difficult, the weight of the collective decisions of the past is heavy, cultural and ideological inertias, psychological resistance, the defense of subjective interests get in the way.
We tend to stay on the known path (path-dependence), at least until the occurrence, or fear, of a catastrophe causes society's energies to coagulate and convoy them towards the discovery of a new path. The second reform we are calling for concerns the education system. Italy is characterized by one of the lowest levels of public investment in education among OECD countries. The macro-phenomena that are normally discussed when speaking of Italian universities also depend on this underinvestment: the low number of graduates and the high dropout rate. These determine a partial inadequacy of the labor offer, in terms of human capital suitable for a modern and advanced economy.
On the other hand, the companies that should ask for it are, in reality, almost never equipped to recognize the different degrees of quality, to request it, to assign it the right compensation. It is therefore necessary to invest in education, adopting a long vision, but it is also necessary to intervene on those company characteristics that hinder the development of a demand for more educated personnel. And here we come to that set of policies that in the past would have been called "industrial", most of which are horizontal in nature. Almost all of these policies are costly for the exchequer, therefore they require a shift of public resources from other less productive uses, which is not politically trivial.
These are measures aimed at promoting Research & Development in companies, at mitigating international transaction costs, at encouraging private investment and at attracting foreign investment, at facilitating the opening up of family businesses to external control, at encouraging the transfer of labour, but above all of capital, towards more efficient uses; this last chapter includes measures to improve governance in banks and to encourage the presence in the financial structure of intermediaries other than banks, more suitable for growing businesses.
Some of these measures have already been partially taken, the first thing to do is push their implementation. Mistakes, if not failures, in implementation deprive even the best of public interventions of effectiveness. In order for them to have an adequate impact on the economic system, what has been known and hoped for for some time and, unfortunately, is not practiced is needed: well-defined objectives (therefore subject to the possibility of ex post evaluation of their effectiveness); an institutional framework that guarantees a suitable allocation of resources; a medium-term time horizon; simple and certain rules for businesses; few and stable institutional interlocutors.
Then you have to continue along the chosen direction. The joint effect of national and European policies (the European structural funds of Horizon 2020, the Cosme program to support small and medium-sized enterprises, the European Fund for strategic investments, the Junker Plan) can really contribute to raising the production standard of our economy. Naturally, in order to obtain concrete results, a stable political majority, a government in the fullness of its powers, a clear and organic government program are needed. The popular referendum of 4 December 2016, which rejected the constitutional reform approved by Parliament at the time, made
even more problematic to fully achieve those conditions, at least as far as we can understand in this part of 2016.
In the future, whatever happens, the centrality of technological evolution will be confirmed. An example of this is the announced fourth industrial revolution, called Industry 4.0. A road has also been traced in Italy: in the autumn of 2016 the government presented a national plan for the digitalisation of the Italian production system through infrastructural interventions and investment incentives, precisely so as not to miss the opportunity of the fourth industrial revolution having lost , in the second half of the nineties, the opportunities of the third, that of information and communication technologies.
Each nation has a precise face in the collective imagination of the world. A face shaped over the centuries, sometimes deformed by stereotypes, but basically corresponding to what that nation has been able to do up to that moment. The face of Italy is beautiful, smiling, but a little faded, a little flaccid. It has always been like this over the centuries, at least since the Renaissance. It's not age that makes him weak, demographic aging has nothing to do with it, which is a phenomenon of the last half century at most. It is good living, at least what is attributed to us. The mild climate, the good cuisine, the habit of beauty. These are not qualities that help a face to remain fresh and strong-willed, but they certainly make it seductive.
Even the things that Italy can make or sell are like this, in the profound conviction of the world that buys them: beautiful, fascinating, poetic, not always reliable, sometimes a little fané. Cars, fashion, food, films (in the XNUMXs), places. If a Middle Eastern emir wants a comfortable and reliable luxury car, he buys a German car, if he wants to indulge himself, he buys a Ferrari. If a Slovak nurse wants to improve her standard of living, she buys a German household appliance, if she dreams of a carefree moment, she thinks of a holiday in Italy.
How does this conditioned reflex of collective psychology compare with the reality of the facts? What can the Italian private entities that produce and sell goods and services on the market, i.e. businesses, from micro ones made up of one person to macro ones with hundreds of thousands of employees? Do they satisfy the wishes of buyers, first of their compatriots, then of customers from all over the world? This book has tried to answer these questions, with analyses, facts and data. Methods of economists, therefore, the most rigorous
possible, but used in the end to answer a question that transcends the economy: why has our country turned in on itself for a quarter of a century and what are the prospects of getting it back on track?
The answer we have given is that Italy still knows how to "invent new things that people like [...] and that are sold outside its borders", to quote Cipolla, but this ability has been restricted to a handful of avant-garde companies. A "great gulf" has opened up between winning and losing companies. There is a lack of a widespread standard of good quality, innovation, attractiveness of the goods and services produced, such as that which is attributed, for example, to Germany. To create it, or recreate it, a large number of businesses need to be placed in the best possible environmental conditions to grow and transform. This is the necessary agenda of any government concerned with averting the historic decline of the nation.
Giving birth to new entrepreneurs, convincing existing ones to grow their businesses, separating them from the destinies of the family, rewarding courage and inventiveness, discouraging income from position, this is the priority commitment of economic policy today in our country . Deflating fiscal and regulatory hypertrophy, straightening out the procedural labyrinths that litter the path of those who undertake, would make us climb many positions in the international rankings of "doing business"; it would start a circuit of favorable expectations which are then self-fulfilled; it would free up the energies of which our country remains rich.
