A substantial research study initiated by the Bank of Italy analyses the concept of competition, its implications over time and its relationship with the culture and growth of companies

 

Companies grow and their culture evolves if both of these – the company and its culture – are subjected to stimuli and demands which make their daily existences a fact of life. It is a matter of intellectual vivacity and of the need to survive and to be a winner in their markets. This is exactly the opposite of the repetitive and monotonous management, which is the antechamber of bankruptcy. Within economic systems, one of the principal factors which have played a key role in this respect is undoubtedly that of competition. A positive one when it is loyal and transparent, but negative when it is disloyal and tainted by other external influences. Understanding the relationships between competition and company growth is important. Including from a historical perspective. Indeed, the company culture and the management techniques of today benefit from this understanding.

It is therefore a good idea to read “Concorrenza, mercato e crescita in Italia: il lungo periodo” (“Competition, the market and growth in Italy: the long timeframe”), the research study edited by Alfredo Gigliobianco and Gianni Toniolo and published by the Bank of Italy.

The investigation seeks to answer a series of questions. For example, what does history teach us about the connection between competition and growth?  And what was the role of competition in defining the characteristics of the Italian economy?  And what are the implications for the current situation?

And when you start reading you quickly discover something: it was only during recent decades that competition was truly taken into account as a key factor for company innovation and growth. Once upon a time competition was a threat and that was all. Gigliobianco and Toniolo set out a series of arguments around the concept of competition which analyse a large number of its aspects. Starting with its cultural aspects and moving on to its legal ones then ending with its more strictly economic functions. They are all then brought together to be examined from different standpoints.  There is, for example, an in-depth analysis of the implications of economic policy and thus of the inheritance of the pre-war imposition of well-ordered markets and production facilities. Whereas in another part of the study they sift through the attitudes of manufacturing industry when it was faced with the need to open up to international markets and to imports. Other contributions, on the other hand, remind us that in reality the markets of today are not actually perfectly competitive and how therefore the ideal of a perfect market is still a long way from being achievable. Yet further ones venture into the delicate areas of oligopolies and monopolies.

More generally, the research initiated by the Bank of Italy seeks to measure the competitive deficit of the Country, to determine the historic reasons for this, and to shine a light upon the consequences. The result is a very substantial book (nearly 600 pages), and one which is not always easy to read or in a logical sequence. However, these are important pages for those who wish to understand more about how a corporate culture originates and what is meant by the loyal sort of competition of which today we feel much in need.

 

 

Concorrenza, mercato e crescita in Italia: il lungo periodo (Competition, the market and growth in Italy: the long timeframe)

Alfredo Gigliobianco and Gianni Toniolo (editors)

Collezione storica della Banca d’Italia (Historical collection of the Bank of Italy), Marsilio, 2017

21/02/2017