How to restart the fragile Italian economy and build new dimensions of work and solidarity
The Italian economy continues to be fragile with little and poor growth, despite the presence of strong, dynamic businesses that are competitive on world markets. We have been in recession for months. The forecasts for 2019 range from zero growth according to the Confindustria Study Centre, to a similar 0.1% estimated by S&P and -0.5 predicted by LC Macro Advisor, the consulting company of Lorenzo Codogno, former chief economist for the Ministry of Economy and professor at the London School of Economics. Thus, we can expect a strongly negative economic trend that ranges between flat growth and recessionary conditions throughout the year, completely contradicting the optimistic (and unfounded) forecasts of the Conte government. We are at a serious standstill and it is now finally beginning to worry even the Ministry of Economy to the extent that Minister Giovanni Tria, at the recent Civil Economy Festival, admitted: ‘We are moving towards zero growth … the most productive part of Italy has come to a halt’ (the yellow-green governing parties did not appreciate this moment of clarity and honesty).
We are also facing a structural crisis, the sign of a country that has failed to build a positive cycle of growth and productivity in the last twenty years. We are limping behind the other EU countries, which are flourishing under the global and European growth conditions. In periods of slowdown, we perform worse than anyone else and now we find ourselves the only country in Europe in recession. Why?
Pierluigi Ciocca ‒ one of our most influential economists who for many years was the director of economic research at the Bank of Italy ‒ tries to explain it in Tornare alla crescita (Return to Growth) published by Donzelli. The picture is dramatic: ‘Italy produces no more than it did fifteen years ago; unemployment is high, and not just for young people; jobs are poorly paid and insecure; poverty is on the rise; the national debt is alarming the markets; the issue in the South has escalated; business productivity is stagnant. Culture, institutions, politics and civil society are struggling to jump start and face the challenge.’ Over the years, says Ciocca, no reforms were introduced or implemented to overcome the fragility of the economy. Economic policy did not deal with generational, social, geographical or income imbalances. Public and private investments are stagnant. The legal system has not stimulated competition or growth. For a long time, businesses have had the benefit of a weak exchange rate ‒ before the advent of the euro ‒ wage moderation, ‘scandalous tax evasion’ and state subsidies. Now, in times of radical economic and technological changes and global political relations, we are unable to cope with the new aspects of competitiveness. And yet, Ciocca believes we can still emerge from this long, profound crisis. We must restore public finances, invest, focus on knowledge and innovation, change the laws that hinder competition, and revive the South. He said: ‘The economy must be reconstructed, rebuilt.’
In short, a new development policy is needed. We need one that is very different to the present policy, which consists of public welfare spending and a lack of investment in infrastructure. If anything, the businesses that have innovated, invested, exported and gained important positions in high added value niches on the global market should be nurtured and made to grow. These are few in number, they make up perhaps a quarter of all Italian businesses. However, they will not be able to drive growth unless accompanied by a very different and improved economic policy, within the framework of EU development strategies.
Another way to deal with the crisis is to promote the ‘civil economy’, as suggested by Jeffrey Sachs, Director of The Earth Institute at Columbia University in New York (he spoke about it last week at the Civil Economy Festival in Florence). Sachs called for less inequality, more confidence, clearer choices regarding sustainable environmentalism, and the admission that the green economy is a real factor in competitiveness (Italian businesses are leading players in this regard, as Symbola documents year after year). This would therefore lead to working on the Tessiture sociali (Social Fabrics), as suggested by the title of the book published by Egea. It was written by Aldo Bonomi, a sociologist, and Francesco Pugliese, Managing Director of Conad, an energetic cooperative supermarket chain. There are four terms of reference: ‘Community, business, mutualism, solidarity’. These are times of the “sharing economy” and disruptive innovation and an Italy consisting not only of large cities but also of a myriad of smaller municipalities. It is vital that an effort is made to retain competitiveness and solidarity. The book describes a journey through forty cities ‘to places at the crossroads in which territorial proximity, putting down roots and community attitudes’ emerge as economic and competitive factors in manufacturing, trade, global distribution and “kilometre 0” values. Italian growth is possible only within the context of sustainability, both environmental and societal.
These are cultural, social and political challenges. Marco Bentivogli, Secretary of the CISL (Trade Unions Confederation) metalworkers’ union, has long maintained this premise, which he highlights in his acclaimed new book, Contrordine compagni (Counter-order Comrades), a ‘handbook of resistance to technophobia for the revival of employment and Italy’, published by Rizzoli.
Bentivogli discusses innovation, new and old professions, how to overcome the divisions between scientific and humanistic education, and general needs that must be satisfied without succumbing to populist temptations or to frightened nationalistic narrow-mindedness. In other words, action has to be taken without resorting to doom mongering market issues, inequalities caused by globalisation or fear of the future. If anything, we need a robust and far-sighted reformism that addresses the issues of competitiveness, sustainability, new social balances and the construction of novel employment solutions.
Bentivogli insists (in Corriere Innovazione, 29 March): ‘Stopping progress is not only impossible, it is the most dangerous thing you can do for employment.’ Robots have been used in businesses for at least thirty years, improving work quality, reducing fatigue in the most repetitive tasks, and stimulating creativity, innovation and responsible participation. Bentivogli explains: ‘Repetitive tasks are reduced, the numbers of manual and clerical workers fall, but employment does not end – it simply changes.’ How does this come about? It is an ongoing process, which we must continue to build with creativity and a sense of responsibility.
There are masters of doom mongering and those who spread fear, such as Studio Casaleggio Associati (the “head” of the Five Star Movement, M5S), who maintain that employment will end in 2054. ‘A prediction with a reliability similar to the interpretations of the Mayan calendar regarding the end of the world in 2012,’ states Bentivogli with irony. It is far better to focus on training, employment policies and the intelligent use of welfare, not to distribute resources too thinly, like the living wage so dear to the M5S, but to act as a social security “cushion” when changing jobs or taking up studies to obtain new qualifications. This type of responsible attitude is even proving positive with the trade union: critical, informed, reasonable optimism.
The Italian economy continues to be fragile with little and poor growth, despite the presence of strong, dynamic businesses that are competitive on world markets. We have been in recession for months. The forecasts for 2019 range from zero growth according to the Confindustria Study Centre, to a similar 0.1% estimated by S&P and -0.5 predicted by LC Macro Advisor, the consulting company of Lorenzo Codogno, former chief economist for the Ministry of Economy and professor at the London School of Economics. Thus, we can expect a strongly negative economic trend that ranges between flat growth and recessionary conditions throughout the year, completely contradicting the optimistic (and unfounded) forecasts of the Conte government. We are at a serious standstill and it is now finally beginning to worry even the Ministry of Economy to the extent that Minister Giovanni Tria, at the recent Civil Economy Festival, admitted: ‘We are moving towards zero growth … the most productive part of Italy has come to a halt’ (the yellow-green governing parties did not appreciate this moment of clarity and honesty).
We are also facing a structural crisis, the sign of a country that has failed to build a positive cycle of growth and productivity in the last twenty years. We are limping behind the other EU countries, which are flourishing under the global and European growth conditions. In periods of slowdown, we perform worse than anyone else and now we find ourselves the only country in Europe in recession. Why?
Pierluigi Ciocca ‒ one of our most influential economists who for many years was the director of economic research at the Bank of Italy ‒ tries to explain it in Tornare alla crescita (Return to Growth) published by Donzelli. The picture is dramatic: ‘Italy produces no more than it did fifteen years ago; unemployment is high, and not just for young people; jobs are poorly paid and insecure; poverty is on the rise; the national debt is alarming the markets; the issue in the South has escalated; business productivity is stagnant. Culture, institutions, politics and civil society are struggling to jump start and face the challenge.’ Over the years, says Ciocca, no reforms were introduced or implemented to overcome the fragility of the economy. Economic policy did not deal with generational, social, geographical or income imbalances. Public and private investments are stagnant. The legal system has not stimulated competition or growth. For a long time, businesses have had the benefit of a weak exchange rate ‒ before the advent of the euro ‒ wage moderation, ‘scandalous tax evasion’ and state subsidies. Now, in times of radical economic and technological changes and global political relations, we are unable to cope with the new aspects of competitiveness. And yet, Ciocca believes we can still emerge from this long, profound crisis. We must restore public finances, invest, focus on knowledge and innovation, change the laws that hinder competition, and revive the South. He said: ‘The economy must be reconstructed, rebuilt.’
In short, a new development policy is needed. We need one that is very different to the present policy, which consists of public welfare spending and a lack of investment in infrastructure. If anything, the businesses that have innovated, invested, exported and gained important positions in high added value niches on the global market should be nurtured and made to grow. These are few in number, they make up perhaps a quarter of all Italian businesses. However, they will not be able to drive growth unless accompanied by a very different and improved economic policy, within the framework of EU development strategies.
Another way to deal with the crisis is to promote the ‘civil economy’, as suggested by Jeffrey Sachs, Director of The Earth Institute at Columbia University in New York (he spoke about it last week at the Civil Economy Festival in Florence). Sachs called for less inequality, more confidence, clearer choices regarding sustainable environmentalism, and the admission that the green economy is a real factor in competitiveness (Italian businesses are leading players in this regard, as Symbola documents year after year). This would therefore lead to working on the Tessiture sociali (Social Fabrics), as suggested by the title of the book published by Egea. It was written by Aldo Bonomi, a sociologist, and Francesco Pugliese, Managing Director of Conad, an energetic cooperative supermarket chain. There are four terms of reference: ‘Community, business, mutualism, solidarity’. These are times of the “sharing economy” and disruptive innovation and an Italy consisting not only of large cities but also of a myriad of smaller municipalities. It is vital that an effort is made to retain competitiveness and solidarity. The book describes a journey through forty cities ‘to places at the crossroads in which territorial proximity, putting down roots and community attitudes’ emerge as economic and competitive factors in manufacturing, trade, global distribution and “kilometre 0” values. Italian growth is possible only within the context of sustainability, both environmental and societal.
These are cultural, social and political challenges. Marco Bentivogli, Secretary of the CISL (Trade Unions Confederation) metalworkers’ union, has long maintained this premise, which he highlights in his acclaimed new book, Contrordine compagni (Counter-order Comrades), a ‘handbook of resistance to technophobia for the revival of employment and Italy’, published by Rizzoli.
Bentivogli discusses innovation, new and old professions, how to overcome the divisions between scientific and humanistic education, and general needs that must be satisfied without succumbing to populist temptations or to frightened nationalistic narrow-mindedness. In other words, action has to be taken without resorting to doom mongering market issues, inequalities caused by globalisation or fear of the future. If anything, we need a robust and far-sighted reformism that addresses the issues of competitiveness, sustainability, new social balances and the construction of novel employment solutions.
Bentivogli insists (in Corriere Innovazione, 29 March): ‘Stopping progress is not only impossible, it is the most dangerous thing you can do for employment.’ Robots have been used in businesses for at least thirty years, improving work quality, reducing fatigue in the most repetitive tasks, and stimulating creativity, innovation and responsible participation. Bentivogli explains: ‘Repetitive tasks are reduced, the numbers of manual and clerical workers fall, but employment does not end – it simply changes.’ How does this come about? It is an ongoing process, which we must continue to build with creativity and a sense of responsibility.
There are masters of doom mongering and those who spread fear, such as Studio Casaleggio Associati (the “head” of the Five Star Movement, M5S), who maintain that employment will end in 2054. ‘A prediction with a reliability similar to the interpretations of the Mayan calendar regarding the end of the world in 2012,’ states Bentivogli with irony. It is far better to focus on training, employment policies and the intelligent use of welfare, not to distribute resources too thinly, like the living wage so dear to the M5S, but to act as a social security “cushion” when changing jobs or taking up studies to obtain new qualifications. This type of responsible attitude is even proving positive with the trade union: critical, informed, reasonable optimism.