«The white oil of Italian companies? Brains and confidence»

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From the annual report of the President of Assolombarda, the Association of industrialists of Milan, Lodi and Monza and Brianza provinces, Gianfelice Rocca, encouraging data arrive for the future of the Italian economic system. Italy still has much to say in the manufacturing and technology fields, especially on 3D production and digital revolution. The country is ready to run in the Olympics of innovation, with a Silicon Valley on the grounds of Expo.

By Lara Colombi

 

Gianfelice Rocca, president of Assolombarda
Gianfelice Rocca, president of Assolombarda

Even Italy has its oil. It is a white oil that consists in the brilliant minds, creativity and positive energy put in the field every day by our businesses to start the engine of the recovery. Gianfelice Rocca, president of Assolombarda, is convinced of it, aware that the numbers of the country are not brilliant but sure that we are close to the bottom of the descent.
Rocca spoke at the meeting dedicated to “50 Projects to make Milan fly”, which was held in December at the territorial headquarters of Confindustria, and stressed the importance that the manufacturing sector still has in the national economy.

Courtesy of Zepa
Courtesy of Zepa

In Lombardy confident mood in manufacturing
The first signs of recovery, according to the president of Assolombarda, come just from the economy of Milan and Lombardy, which in 2014 saw an increase of exports, improving the index of manufacturing confidence and starting new startups: «With regard to the manufacturing production, Lombardy has been rising from the beginning of 2013 and, made ​​equal 100 the 2005 year, at the end of the third quarter of 2014, it has returned to a share of 97.1. Italy continues to   down, and falls to the share of 80.3. If we look at the confidence index of the manufacturing sector – which includes orders, not just sentiment – Milan records +0.7, Italy -7.1, and even Germany marks  -3 and France  -6.4.  Lombard exports marks in the third quarter 2014, an encouraging +1.3%.  Unemployment is at 7.7% in Lombardy, while the Italian one came to 13.2%. Our regional  employment rate is 65.1%, the Italian one is equal to 56%. The voluntary liquidations in the North-West, from beginning of the year, were down 12.8%, a net decline of the companies that throw in the towel thinking of not succeeding in, while in the same period in 2013 they increased by 2.7%.  Among the entrepreneurs the passion comes back to prevail over despair. And, for every failure, in Lombardy in 2014 there are 19 startups.»

 

Courtesy of Fulgor Milano
Courtesy of Fulgor Milano

All eyes on the digital revolution, 3D productions and the Internet of things
For the relaunch of Italy, Rocca says, it is necessary to differentiate: «We need to incorporate the digital revolution, the laser, 3D productions and the Internet of things.  And, in Milan and Lombardy, we have the suitable companies to take this path.»
According to the President of Assolombarda, after China and Japan, we are the third country in the world in manufacturing sector and, in Italy, excellences are already present both in 3D productions and in laser evolution. Of course we are behind the German companies and we should think about innovation learning from Berlin, protagonist of a successful home made, the result of a high degree of social cohesion and extraordinary political stability. «Then we have another great competitor in Europe: Poland,» Rocca said, “from which we made ​​subtract most of the productions, on which we have built the success of our industrial system.»  An evident example is what happened in the field of home appliances, which a few decades ago saw in the old continent us undisputed protagonists and that today, however, sees the giants of White Goods pack and relocate production to other countries.

A new Italian Silicon Valley
«The problem – Rocca says – is that we think we are candidate for the classic Olympic Games, doing business with the overbuilding and the construction of new stadiums, and we do not focus instead to participate in the Olympics of innovation.»  Our manufacturing enterprises, if properly supported, could be the protagonists of a big change.
In Italy a new Silicon Valley could rise, that Rocca would build just on the land vacated by Expo, once the world exposition will be over.
«Much better a science park than a stadium – Rocca ensures – We have developed a project with the Bocconi university and certainly among the partners there could be several multinationals of the digital revolution and many large consulting firms with their data center.»  According to Rocca this is an opportunity that must not be wasted, inspired by what for example the Nordic countries are doing, actively engaged in the technological future of the big cities: «We work with some leading associated companies and with important financial and  institutional partners in order that the Expo area, the event ended, exploit the exceptional preset infrastructure and digitization conditions.»

 

Courtesy of R.G.V.: PI 2000 plate
Courtesy of R.G.V.: PI 2000 plate

While spending little on research, Italy remains a key country
We can make a difference just because in Italy there are the best centers of Research and Development and our country has the ability to produce technological innovations at a very competitive cost.
«We must look to the European experience taking as model, the great knowledge hubs such as Barcelona, ​​which has less positive factors than for example Milan, but had a great ability to position itself on all nodes in European research and innovation» Rocca says.
«If you look at the six challenges of AMB for Barcelona 2020 – Rocca underlines – two fall exactly in the perimeter we are dealing today with our project Startup Town: to become global leaders in some areas of knowledge and update and upgrade, with the subsequent innovation chain, the production specializations. It is, in fact, thanks to these strategic and coordinated efforts that Barcelona has attracted startups from abroad, then proved highly successful, and large international funds of Venture Capital.»
The challenge we have in front of us to give back to Italy an industrial organization is first and foremost a challenge of our institutions. The business community, according to Rocca, can help but needs interlocutors who take the baton and work together with companies.
«Do not forget, however, that, even spending a little amount for research, Italy is in better position than we think, considering the scientific productivity – says Rocca – International Italian quotations are, in fact, in a ratio of 35 per million dollar spent compared to 15 for Germany and 15 for the US.  Italy then stands for a greater participation of women in innovation: the percentage of women inventors in our country is 6.3% against 5.6% in the US and 3.4% of Germany. Lombardy is even ‘more Pink’ with a share of 8.6%.»
The problem is then to transfer to economy the great innovative capability of universities and of research and development centers present in the country. According to Rocca, it is essential to build bridges between business and those who produce knowledge: «It will need policies for innovation and education. This is what can make a difference in the relaunch of our economy.»

Courtesy of Bialetti: BialettiCuore red
Courtesy of Bialetti: BialettiCuore red

Corruption cases disprove our companies
Foreign investments are often hampered by the many cases of corruption, which Rocca defines a real disease of our society: «The problem is that our country thinks to answer to these phenomena by removing confidence to businesses and increasing controls. In this way we create what I called the discouraged autonomy, a deleterious system that removes confidence even to those who deserve it with the only result of ending up in the perfect immobility.»
Thus, according to the president of Assolombarda, there won’t be no longer managers willing to take their responsibilities: «To face this disease that pollutes the competition in the markets, it is necessary to allow more discretion to those who must make choices, as it happened in public administration in France, Germany and Great Britain. It is a problem of Italian formalism to think that some rules are enough in order to, as in a slot machine, ethical winners magically come out from the contracts.»

The export is not negative, it lacks an internal market Nevertheless the situation is favorable to the recovery.  «Looking at the trade balance, we cannot speak of Italy as an uncompetitive country – says Rocca – The topic that weighs on the Italian economy and on our business is mainly the lack of an internal market.»  About 20 billion of consumption every two months lack and 20 billion of investments too.
«Let’s add today before us three powerful factors of recovery,» said Rocca.  «The international and European context remains characterized by asymmetry of monetary policies and by the growth slowdown of emerging countries. But the decline of the euro against the dollar, with -11% from May, drives exports facilitating our terms of trade. The drop in oil prices, now 46% compared to June, download positive effects on energy bills for consumers and businesses, in a lasting perspective, according to the observers. All this means raw materials prices down for business, accentuating an already present trend. These three factors can and must be exploited in the best way by the Italian economy. And they could be further incentivized: we ask, for example, if it is the right time for a decrease of the too high tax component on fuel costs and improper costs that weigh on electric bill, so as to enhance the transfer to businesses and households of the drop of the industrial component of the energy production.»
According to Rocca an error remains anyway:  «To think about the difficulty of the country as an inhibiting permanent factor. On the seventh year of the hardest crisis from the Unification of Italy, nihilisms and antagonisms risk to powerfully curb our recovery in the markets, the sustainability of our public debt in the European framework. It is a mistake that should not be committed. It must not be committed nor by businesses, nor by politics, nor the by labor union. We must take back our destiny, make us stronger with what we have, which is a lot, and learn to get the best from it.»

ITALIAN COMPETITIVENESS IN THE 2014 WORLD ECONOMIC FORUM RANKING
The theme of Italian competitiveness at a global level is measured in the 2014 ranking of the World Economic Forum.
According to the ranking, released in the first days of September and processed by the Swiss non-profit foundation, Italy ranks 49th out of 144 countries, among the weakest European economies and distant from its main competitors (Germany 5th place, France 23rd, and Spain 35th). In Italy, among the competitiveness brakes stand out above all the reduced efficiency of the labor market (136 th place out of 144), the tax burden (134th), the development of the financial market (119th), the criticality of the macroeconomic (108th) and the functioning of institutions (106th). How strong points are, however, the size of the market for business (12th place), health and primary education (22th) and the sophistication of the business (25th) in which Italy soars 1st place in the ranking for business aggregation.
Returning to the ranking, Switzerland maintains the podium for the sixth consecutive year thanks to a mix of factors such as the capability for innovation, the high degree of education and the efficiency of the labor market even if, the WEF warns, in future it may find difficulty in finding staff with high skills. Attention to the possible populist tendencies.
Second place went to Singapore, followed by the United States, Finland, Germany, Japan, Hong Kong, Netherlands, United Kingdom and Sweden.

The importance of manufacturing in Europe
The role of manufacturing in Europe has downsized in recent years. More than 3.8 million jobs were lost in the sector since the crisis began. Despite this, from the study "Manufacturing the future Europe", commissioned by BusinessEurope and elaborated by German companies IW Consult and IW Köln, the strategic importance of this sector that contributes to 15% of European added value emerges. It also activates synergies with other sectors (of the manufacturing and services) with a multiplier effect: +1% in demand (domestic or export) of a manufactured good generates an increase of 1.68% of the output in the total economy; it employs directly 32 million workers and more than 20 million indirectly; is the engine of innovation: 65% spending on research and development; 49% spending on innovation; it is the engine of internationalization: it generates 57% of European exports and is part of the global value chains.
Courtesy of SMEG: BIG toaster 2CR
Courtesy of SMEG: BIG toaster 2CR