The Italian Touch and the factors of industrial policy: innovation & sustainability
What do we mean when we say we need an “industrial policy”? What are the political and economic categories that we need to refer to in order to offer a concrete response to the need to reinforce the competitiveness of the Italian system, in a world marked by the “polycrisis”, the US-China conflict and the difficulties of Europe? In attempting to answer, we could start with a phrase circulating in the world of BMW in a year of record car sales, more than 2.5 million on international markets: the ‘Italian Touch’. It’s a way of referring to beauty, elegance, design, but also cutting-edge technology and a tendency towards sustainability (Il Foglio wrote about it on 30 January, in a dialogue with the Chairman and CEO of BMW Italia, Massimiliano Di Silvestro).
The fact that the ‘Italian Touch’ is a positive expression in Munich, in the headquarters of one of the most sophisticated and innovative car manufacturers, doesn’t only imply celebrating a tribute to Italian brands like Giovanni Michelotto and Giorgetto Giugiaro, who collaborated with BMW’s success from the 1960s to the 1980s, or confirming an appreciation for Italian automotive components (which contribute a good third to the value of a BMW on average). Above all, it means acknowledging Italian industry’s winning tendency to maintain a combination of “beauty and the well made”: quality, aesthetics, innovation and sustainability.
The point is this: a ‘Made in Italy’ industrial policy must of necessity have strategic support for these four “factors” of competitiveness as its foundation, rather than indicating specific sectors to receive the investment of public resources and fiscal support.
In short, an industrial policy that helps Italy, in the context of effective EU industrial policy choices, should now insist on those factors capable of making our companies – both Italian and European – more competitive. That means that they’ll be able to maintain a position on markets that are increasingly demanding and selective in the face of the power of US and Chinese businesses, and in certain sectors also Indian ones.
An economist who is attentive to new competitive challenges, Daniel Gros, explains how the US economy is growing more than expected because it has been able to focus not so much on industry – even if there’s no shortage of measures from the White House that are clearly protectionist in nature – but on new technologies above all. (This emerges in an interesting issue of the journal Aspenia, dedicated to America a year after the vote and entitled “La debolezza della potenza” (the weakness of power), a cutting oxymoron inviting us to move past the current readings of this controversial season in America.) These new high technologies, starting with the spread of AI (Artificial Intelligence) and digital services, are factors that are radically changing production, work, consumption, lifestyles, knowledge and the environment: a genuine “fourth industrial revolution”, following the steam engine, electricity and the Internet.
It’s the economy dominated by big tech – Google, Amazon, Apple, Meta and Microsoft – and Elon Musk’s companies, with special attention to Generative Artificial Intelligence and the repercussions for research, culture, information and communication (with all the attendant ethical, social and political problems). It’s the economy that lays waste to millions of jobs and creates others. It’s the economy, in short, where the US–China clash plays out and according to which new global balances are determined. (We should never lose sight of India, also in this respect.)
And what about Europe? It’s a big industrial player, the richest market in the world. It’s at the heart of a system of values that so far have inspired an original and truly invaluable synthesis of liberal democracy, the market and welfare, and of freedom and social solidarity. But it’s not a decisive political player – it’s still seeking a role and balance – and in new technologies specifically, it’s far behind the big players in the “new globalisation”. Its recent system of rules, the Artificial Intelligence Act, has been given the green light by the European Commission, Parliament and Council, but it can’t count on European companies of a size that can compete with the strength of the giants of American business.
The EU therefore faces a choice on the horizon: how to maintain a combination of industrial strength and high-tech innovation and how to become more compact, unitary and effective, a global player at last – and not a jar of clay among stronger vessels as usual. It’s a radical challenge, which the new Parliament we elect in June and the new Commission will be called to answer (hoping for the defeat of nationalist, populist and sovereignist forces who consider Europe merely a market for balancing the local interests and advantages of countries, not as a political and cultural space for developing values and to propose as a paradigm of democracy in dialogue with the rest of the world).
From this perspective, talking about European industrial policy (we wrote about it in last week’s blog) means defining policies for energy, security and therefore defence, the supply of strategic raw materials, sustainability (and so also industry and agriculture, overcoming the limitations of the current CAP, the Common Agricultural Policy which is the object of unsettling protests by farmers). It also means defining the financial instruments to support it, from eurobonds to strengthening the EU budget and the rules and prospects of the new Stability and Growth Pact. It means a “competitiveness strategy, but one that isn’t at the expense of welfare and the green transition”, in the words of Mario Draghi, who has been tasked with preparing a report on the issue by President of the European Commission Ursula von der Leyen.
And what about Italy? The factors of competitiveness, in addition to the ones for Europe in general, are connected with the need to overcome the weaknesses in our industrial sector. First come measures to stimulate innovation, with tax benefits for those who invest, innovate, patent and work on the digital transition, according to the scheme of measures that were formerly Industry 4.0 and are now Industry 5.0 (The PNRR represents €6.3 billion, to be spent well). Then there’s the spread of applications connected with Artificial Intelligence and algorithms for both production processes and products. It’s long-term work that also involves collaboration between business, universities and public and private research centres.
The second industrial policy factor to invest in involves the environmental transition, overcoming the restrictions of regulatory and administrative constraints typical of bureaucracies, both European and national. A connection to issues of energy is essential, with the return of atomic energy, as is the choice of technological neutrality. For example, electric cars are one option, not everyone’s destiny, leaving the option of using hydrogen, biofuels, etc. open.
The third factor relates to the responses required to address the shortage of skilled workers with the necessary training strategies: from metallurgy to furniture, and from tourism to construction, in the North-West and North-East companies struggle to fill an average of 1 in 2 roles among those in demand (Il Sole24Ore, 29 January).
We need long-term training, on the job but also characterised by positive relationships between companies, company academies and qualified training agents (universities, first and foremost). And also need to clarify a basic concept concerning the ever greater spread of Artificial Intelligence, which we mentioned: who writes the algorithms?
It’s essential that the answer is connected with the features of Italian industry and its competitive capacity: its “polytechnic culture” that combines humanistic and scientific knowledge, a sense of beauty and technological quality, cutting-edge design and engineering. So the algorithms need to be written by engineers and cyber-scientists, economists and sociologists, physicists and statisticians, philosophers and jurists, people with a profound knowledge of technological issues but also sensitive to ethical questions: the complex wisdom of a changing world.
The horizon of competitive transformation, and therefore industrial policy, is broad. Our horizon is the new Renaissance, but this horizon is anything but tranquil.
(Photo Getty Images)
What do we mean when we say we need an “industrial policy”? What are the political and economic categories that we need to refer to in order to offer a concrete response to the need to reinforce the competitiveness of the Italian system, in a world marked by the “polycrisis”, the US-China conflict and the difficulties of Europe? In attempting to answer, we could start with a phrase circulating in the world of BMW in a year of record car sales, more than 2.5 million on international markets: the ‘Italian Touch’. It’s a way of referring to beauty, elegance, design, but also cutting-edge technology and a tendency towards sustainability (Il Foglio wrote about it on 30 January, in a dialogue with the Chairman and CEO of BMW Italia, Massimiliano Di Silvestro).
The fact that the ‘Italian Touch’ is a positive expression in Munich, in the headquarters of one of the most sophisticated and innovative car manufacturers, doesn’t only imply celebrating a tribute to Italian brands like Giovanni Michelotto and Giorgetto Giugiaro, who collaborated with BMW’s success from the 1960s to the 1980s, or confirming an appreciation for Italian automotive components (which contribute a good third to the value of a BMW on average). Above all, it means acknowledging Italian industry’s winning tendency to maintain a combination of “beauty and the well made”: quality, aesthetics, innovation and sustainability.
The point is this: a ‘Made in Italy’ industrial policy must of necessity have strategic support for these four “factors” of competitiveness as its foundation, rather than indicating specific sectors to receive the investment of public resources and fiscal support.
In short, an industrial policy that helps Italy, in the context of effective EU industrial policy choices, should now insist on those factors capable of making our companies – both Italian and European – more competitive. That means that they’ll be able to maintain a position on markets that are increasingly demanding and selective in the face of the power of US and Chinese businesses, and in certain sectors also Indian ones.
An economist who is attentive to new competitive challenges, Daniel Gros, explains how the US economy is growing more than expected because it has been able to focus not so much on industry – even if there’s no shortage of measures from the White House that are clearly protectionist in nature – but on new technologies above all. (This emerges in an interesting issue of the journal Aspenia, dedicated to America a year after the vote and entitled “La debolezza della potenza” (the weakness of power), a cutting oxymoron inviting us to move past the current readings of this controversial season in America.) These new high technologies, starting with the spread of AI (Artificial Intelligence) and digital services, are factors that are radically changing production, work, consumption, lifestyles, knowledge and the environment: a genuine “fourth industrial revolution”, following the steam engine, electricity and the Internet.
It’s the economy dominated by big tech – Google, Amazon, Apple, Meta and Microsoft – and Elon Musk’s companies, with special attention to Generative Artificial Intelligence and the repercussions for research, culture, information and communication (with all the attendant ethical, social and political problems). It’s the economy that lays waste to millions of jobs and creates others. It’s the economy, in short, where the US–China clash plays out and according to which new global balances are determined. (We should never lose sight of India, also in this respect.)
And what about Europe? It’s a big industrial player, the richest market in the world. It’s at the heart of a system of values that so far have inspired an original and truly invaluable synthesis of liberal democracy, the market and welfare, and of freedom and social solidarity. But it’s not a decisive political player – it’s still seeking a role and balance – and in new technologies specifically, it’s far behind the big players in the “new globalisation”. Its recent system of rules, the Artificial Intelligence Act, has been given the green light by the European Commission, Parliament and Council, but it can’t count on European companies of a size that can compete with the strength of the giants of American business.
The EU therefore faces a choice on the horizon: how to maintain a combination of industrial strength and high-tech innovation and how to become more compact, unitary and effective, a global player at last – and not a jar of clay among stronger vessels as usual. It’s a radical challenge, which the new Parliament we elect in June and the new Commission will be called to answer (hoping for the defeat of nationalist, populist and sovereignist forces who consider Europe merely a market for balancing the local interests and advantages of countries, not as a political and cultural space for developing values and to propose as a paradigm of democracy in dialogue with the rest of the world).
From this perspective, talking about European industrial policy (we wrote about it in last week’s blog) means defining policies for energy, security and therefore defence, the supply of strategic raw materials, sustainability (and so also industry and agriculture, overcoming the limitations of the current CAP, the Common Agricultural Policy which is the object of unsettling protests by farmers). It also means defining the financial instruments to support it, from eurobonds to strengthening the EU budget and the rules and prospects of the new Stability and Growth Pact. It means a “competitiveness strategy, but one that isn’t at the expense of welfare and the green transition”, in the words of Mario Draghi, who has been tasked with preparing a report on the issue by President of the European Commission Ursula von der Leyen.
And what about Italy? The factors of competitiveness, in addition to the ones for Europe in general, are connected with the need to overcome the weaknesses in our industrial sector. First come measures to stimulate innovation, with tax benefits for those who invest, innovate, patent and work on the digital transition, according to the scheme of measures that were formerly Industry 4.0 and are now Industry 5.0 (The PNRR represents €6.3 billion, to be spent well). Then there’s the spread of applications connected with Artificial Intelligence and algorithms for both production processes and products. It’s long-term work that also involves collaboration between business, universities and public and private research centres.
The second industrial policy factor to invest in involves the environmental transition, overcoming the restrictions of regulatory and administrative constraints typical of bureaucracies, both European and national. A connection to issues of energy is essential, with the return of atomic energy, as is the choice of technological neutrality. For example, electric cars are one option, not everyone’s destiny, leaving the option of using hydrogen, biofuels, etc. open.
The third factor relates to the responses required to address the shortage of skilled workers with the necessary training strategies: from metallurgy to furniture, and from tourism to construction, in the North-West and North-East companies struggle to fill an average of 1 in 2 roles among those in demand (Il Sole24Ore, 29 January).
We need long-term training, on the job but also characterised by positive relationships between companies, company academies and qualified training agents (universities, first and foremost). And also need to clarify a basic concept concerning the ever greater spread of Artificial Intelligence, which we mentioned: who writes the algorithms?
It’s essential that the answer is connected with the features of Italian industry and its competitive capacity: its “polytechnic culture” that combines humanistic and scientific knowledge, a sense of beauty and technological quality, cutting-edge design and engineering. So the algorithms need to be written by engineers and cyber-scientists, economists and sociologists, physicists and statisticians, philosophers and jurists, people with a profound knowledge of technological issues but also sensitive to ethical questions: the complex wisdom of a changing world.
The horizon of competitive transformation, and therefore industrial policy, is broad. Our horizon is the new Renaissance, but this horizon is anything but tranquil.
(Photo Getty Images)