In the last quarter of a century, Italian industry as a whole has lost content, its added value has decreased compared to turnover much more than the European average, it has almost halved, let's say that industry has marketed itself a little, buys and he resells putting in not much of his own. In 2014, however, this process of impoverishment stopped and added value recovered by a small percentage point.
The last strong increase in the industrial content took place between 1980 and 1988, despite the fact that the government of the time did not have a modern industrial policy either, given that it limited itself to introducing incentives for technological innovation, almost all for the benefit of companies in the North and certainly not those of the South. In those years the merit of the growth, so to speak, was the public expenditure of the current part which began to grow pathologically, fueling an abnormal debt.
The decrease in added value measured between the end of the 1998s and the end of the XNUMXs was in part a consequence of the decentralization process of corporate functions which, starting from the Lombard companies, gave rise to the so-called advanced tertiary sector and was physiological because it represented the competitive response Italian to changes in the industrial organization that were taking place in the world. A clear and clear deindustrialization instead began at the end of the XNUMXs. The reason for this negative process can easily be identified in a fall in investments, which starting from XNUMX remained even lower than self-financing (sum of depreciation and retained earnings) and despite the fact that self-financing itself was declining. It decreased because the means of production, as they reached the end of their useful life, instead of being replaced, continued to function without having to be further depreciated; it also fell because operating profits were emptied by dividends massively distributed to shareholders.
Along this path of industrial decline, however, the companies improved their management efficiency, saved even if only an apparent profitability (apparent because it was actually obtained without setting aside large depreciations), repaid their debts and, contrary to popular belief, strengthened their patrimonial and financial health. In short, somewhat paradoxically, aged companies closed their doors in good conditions and they did so only because entrepreneurs lost momentum and risk appetite. The loss of employment in medium and large Italian industrial enterprises can be estimated at one third of that existing at the beginning of deindustrialization.
1998 was also the year from which our country began to lose competitiveness. There are various international indexes that measure it, but almost all agree on dating the beginning of the deterioration of Italy's competitiveness to 1998-99. Even from this point of view, however, in the 2015 ranking our country made an appreciable leap upwards.
The loss of competitiveness is the result of many things, from fiscal policy to public debt, from the inefficiency of the Public Administration to the increase in the cost of networks and services borne by industrial companies. Well, in Italy, the gas network, electricity network and motorway companies benefit from generous tariffs which are not determined by the market because they are regulated by administrative authorities. These companies present amazing economic performance, to the point that it is legitimate to imagine there are ample margins for reducing the tariffs themselves, which the administrative authorities do not reduce. Indeed, at this point a reflection on the regulatory authorities is called for, led in the past by top management who are not always independent of politics.
Normally, in strategic planning, top management faces the decision whether or not to make technical investments in new means of production. If the economic policy of the country that should host the new investments has an acceptable level of uncertainty, that is if it is stable and credible enough, then the companies evaluate the physiological risk inherent in the business and launch the investments; if, on the other hand, the indicator of the country's level of uncertainty is too high (a sort of inverse of business confidence), then companies postpone their investments until better times. In 1998 in Italy, ISAE measured an increase in uncertainty so high as to discourage the vast majority of new investments, especially those in high-tech projects, in large companies, in the South.
1998 was therefore the year at the same time that the fall in investments by industrial companies began, the beginning of the deterioration of the country's competitiveness, the achievement of maximum uncertainty in economic and institutional policy. On the other hand, on closer reflection, between 1990 and 1998 in Italy, under pressure from the European Commission and the single market, many decades-old certainties had disappeared, the main instruments of public intervention had been dismantled one after the other in the economy that the fascist regime sixty years earlier had set up to castle, protect and isolate Italy from the effects of the stock market and world financial crisis of 1929.
After the Second World War all those instruments, subject to some corrections devised by the enlightened governments of the early 1996s, had allowed Italy to enter the ranks of industrialized countries, but then they had been enslaved to the management of power by the relative majority party. This is the case: of IRI, the first of the three state-owned entities; of IMI, the main industrial credit institution; of market protectionism; of the Committee of Ministers for the Coordination of Industrial Policy. This dismantling of public intervention and the end of competitive currency devaluations, due to the unfavorable pegging of the lira to the Deutsche Mark at the end of 1993 and to euro entry two years later, were not compensated by any new model of industry governance . Even concertation, after an initial effective application in 1998, then suffered a serious blow with the bankruptcy of the government which (also in this case at the end of XNUMX) had made it the substance of its programme.
Although they allowed Italy to enter the ranks of industrialized countries, the state holdings did not contribute to the growth of the country's productive fabric which was sufficiently robust and competitive. Considering then that the second and third generations are less innovative than that of the founders of the companies, instead of stubbornly defending old companies, the State does much better to create the conditions for the birth of new young companies.
Confindustria, speaking on behalf of its members, has always asked the government for the right things but, so to speak, has asked for everything and more, from greater bank credit to help to recapitalize businesses, from research to technological innovation , from a reform of the labor market to one of the Public Administration, from civil justice to infrastructural works, from foreign trade policy to taxation, from education and health to cultural heritage, from foreign policy to cutting the cost of politics. He asked for all these things without the slightest self-criticism, without an order of priorities, without indicating the crux of the matter, with the implicit supine acceptance that the government, perhaps wanting to accept the requests but not having enough money, did little of everything, i.e. in the end nothing. In speaking with the government, Confindustria has never been able to commit the entrepreneurial behavior of its members, nor could it have done so because they were legitimately jealous of their autonomy.
Not to mention the behavior of those who, like Marchionne's FIAT, have pursued a Darwinian multinationalisation, without state intervention and even against the union of entrepreneurs and workers. In this case it was a disruptive model, highly successful, but difficult to replicate on the bulk of Italian industry.
In the spring of 2014, the government in office today began by aiming to strengthen domestic demand and, in this way, to trigger a recovery in industrial production and therefore in employment. That choice was limited in scope, but effective. Subsequent government action, based on reforms capable of improving the country's competitive position, from the Jobs Act to the reform of Article 18 and the electoral reform, contributed to decreasing business uncertainty. The international geo-political imbalances acted in the opposite direction, resulting in the collapse of crude oil prices.
In March 2016, two important innovations emerged, both aimed at organizing medium-long term resources to provide credit for productive investments. First of all, the Italian government offers a tax incentive to families who channel their savings towards productive investments in a stable and lasting way. Furthermore, the ECB not only encourages banks that lend to companies but, above all, starting from mid-2016 it buys corporate bonds issued by companies as long as they have an "investment grade" rating. The problems of financing industrial investments thus seem to have been definitively solved.
However, the other horn of the dilemma remains unsolved, the much more important one, I would say existential, of the propensity of entrepreneurs to undertake, to invest. This dilemma is linked to uncertainty, the competitiveness of the Italian system and economic convenience. I am making a few proposals here, two on the institutional level and two on that of economic convenience.
On an institutional level, I start from what was requested by the ECB, according to which "the regulatory context should be made more favorable to economic growth". In the first place, it would be appropriate for the government to draw up a road map for the further recovery of the competitiveness of the production system, approve it and entrust a minister with the task of verifying its implementation and expediting vis-à-vis all the administrations in any way competent in the matter, systematically reporting them to the Council of Ministers and proposing, if necessary, the adoption of any corrective measures. Since with the abolition of the Cipi (let it be clear, without regrets) a moment of coordination of industrial policy was lost, since by industrial policy today we must understand that of the competitiveness of the production system, without the temptation of formerly direct state interventions in the economy, and since the Ministry of Economic Development has an organizational and professional capacity far superior to the current role of manager of company crises, it would be, in my opinion, appropriate that this task of verification and reminders were entrusted precisely to the Minister of Economic Development.
Secondly, Parliament should ascertain why the tariffs for networks and services are so high and disproportionately remunerative for the companies that operate them. Then, on the basis of the results of such an assessment, it should reconsider the institutional set-up of the respective market regulatory authorities.
In terms of economic convenience, I start from my belief that it would be wrong to take it out on a category, for example entrepreneurs. If since 1998 they have been weak in their main attitude, which is that of investing, it means that the conditions of the ecosystem that allow convenience and the very survival of the species have disappeared. So, exceptionally, the government allows all medium-sized industrial companies to amortize any new investments in the two-year period 2017-2018 with freely chosen coefficients, higher than the tax ceilings, perhaps even up to spending them directly in the income statement for each of the two years. Thus, for a couple of years, companies would invest enthusiastically, deduct investment expenses, wipe out their already meager taxable profits, pay no dividends, pay little or no income tax, the IRS would lose a little but then, for the entire life of the new production plants, born already depreciated, the profits and the higher tax revenues would more than compensate the shareholders and the tax authorities themselves. The so-called super-depreciation approved by the government in the 2016 Stability Law is correct in quality, but insufficient in extent.
Secondly, having gathered the broadest consensus among his constituents, therefore knowing their hidden fears and hopes, the new president of Confindustria Vincenzo Boccia publicly states in extreme synthesis what the reasonable and most priority priority is (I apologize for the expression) ; the one which, once set in the technical times, finally allows our companies to unleash all their potential, return to invest and seize the enormous potential that the global market offers.
The government would have six months to plan the restoration of favorable context conditions, before the Italian industrial companies are convinced and put the new productive investments in the 2017 budget. At the beginning of 2019, the employment benefits would be seen. This is a sort of last call for Confindustria, but it is also for the country.
