Milan, the most open-minded, European and enterprising Italian metropolis. Now busy dealing with a new cycle of municipal government. Following in the footsteps of the previous municipal council that was ably led by Giuliano Pisapia, yet with a leadership with sound managerial and international experience, that of Beppe Sala, “mister Expo”, fit to tackle the new challenges: attractiveness, competitiveness, innovation and solidarity. In a metropolis that has proven, post-vote, to be a dynamic island in an Italian political context where signs of rebellion instead prevail over those of concrete and positive governance.

Complex challenges are in store. Because, although it is true that Milan, more than other cities, has an economy, a culture and civil life which move forward independently of public-made decisions and expenditure, it is also true that, during these times of accentuated international competitiveness between cities and territories, the long-term decisions of good government have an extraordinary importance, in terms of development, for the future of a place in which, more than anywhere else, to seek and find new job and life opportunities.

Milan, today, is a place for businesses, culture, innovation, creativity, top-notch training (200 thousand university students, of which 13 thousand are foreign) but also for solidarity and commitment to sustainability, both environmental and social. Milan is “the place to be”, as the international media declared during the amazing Expo season. Milan, “the metropolis where the construction of new geometries between society, economics and politics is further ahead”, a “hybrid identity mid-way between market and society” with all the values of what is commonly referred to as the “circular economy”, according to Aldo Bonomi (Il Sole24Ore, 19th June), marking the positive inheritance of the municipal administration led by Giuliano Pisapia (“doing well” which is an essential trait and unfolded in two ways, i.e. legality and efficiency: not a single criminal investigation into the activities of Palazzo Marino: “Administrating with clean hands, without keeping them in one’s pockets”, sum up Pisapia’s supporters: another inheritance to treasure).

In short, Milan, a good engine for Italy. One which must continue to burn.

Yet how do things truly stand, in Milan the metropolis and in Lombardy, compared to the other “engines of Europe”? Better than in the remainder of Italy. But still not very well. The data were gathered by Assolombarda, the largest territorial association of Confindustria (which groups together 6 thousand companies from Milan, Lodi, Monza and Brianza: hi tech, manufacturing and outstanding services, making up for a good quarter of the Italian GDP), during the meeting held on 9th June. These data, illustrated by Chairman Gianfelice Rocca, show that Milan is growing, true, but less than in the areas of Baden-Württemberg and Bayern in Germany, than in Catalonia in Spain, than in Rhône-Alpes in France, which were picked as comparisons for competitiveness.

Let’s take a closer look at these data. Starting with a comparison with the economic situation prior to the Major Crisis. Lombardy still registers a GDP of -4.9% (change in 2015 compared to 2008) whereas Catalonia registers -2.9% and Baden-Württemberg +8%. Exports have got back on track and are driving the Country, but also in this perspective, less so than in other places: +6.9% in Lombardy (change in 2015 compared to 2008), +26.4% in Catalonia, +30.4% in Baden-Württemberg. In short: we have not recovered from the fall of the crisis and movement is still slow in the most dynamic sector, in other words exporting companies.

If we look at the rate of activity (the ratio of active population and the working age population, aged between 15 and 64), we are not doing that well: 80% Bayern, 79.4% Baden-Württemberg, 77.6% Catalonia, 73.3% Rhône-Alpes and just 70.8% Lombardy (better than in the remainder of Italy: …). As regards the employment rate too (those who have a job), we are almost at the back of the line, or nearly: 77.7% Bayern, 76.9% Baden-Württemberg, 66.6% Rhône-Alpes, 65.1% Lombardy and Catalonia just under, with 63.1%. The average employment rate in Italy is 56.3%: Croatia and Greece are the only ones worse off than us, and Germany leads at 74%, France 64.2%. To say it in short: there is greater participation in employment in Lombardy, as well as more employment than in the rest of Italy, but direct competitor countries are more active and produce more. And better. In other words, they also produce more added value, thanks to the better qualification of the workforce.

Confirmation of this gap can be found by analysing the number of graduates in the population. If we take as reference the class aged between 25 and 64, there are 19.3% graduates in Lombardy, the lowest rate among its competitors: 30.8% in Baden-Württemberg, 29.6% in Bayern, 37.4% in Rhône-Alpes and 37.5% in Catalonia. Things improve a little if you consider a younger age class, between 30 and 34: the rate in Lombardy goes up to 29.5% (they study for longer, including specialisation courses, with better qualifications) but our competitors are also growing: 36.5% of graduates in Baden-Württemberg, 36.7% in Bayern (in short, we are bridging the gap with the more industrial and productive Germans), 43.1% in Catalonia but a whopping 50% in Rhône-Alpes.  Fewer graduates, less productivity and competitiveness (without considering the type of degrees achieved and the relationship between training and employment, which is very positive in Germany for instance).

It is true that Milan and Lombardy are paying for the costs of the general malfunctioning and low productivity of the entire Italian system (invasive and inefficient public administration, complex and wasteful taxation but also high tax evasion, the low level of material and immaterial infrastructure, including the insufficient dissemination of “broad band”, lack of training, lack of attention on the part of a large part of the public opinion as regards business, merit and market culture, widespread corruption and the weight of criminal economies, etc.). However, aside from these highly conditioning factors, there are also entrepreneurial and social dynamics, in the metropolis, which need to be set back in motion. There are businesses to grow. Innovation to be stimulated.

If Milan is still perceived, even after Expo has ended, as “the place to be”, this title should be defended and reinforced. Otherwise, we will stop growing, get stuck, and sooner or later decline.

What to do? Assolombarda insists: Milan must rapidly travel down the road of the “smart city”, able to play on all sides of innovation, starting with the launch of Human Technopole in the former Expo area (university, research, cutting-edge businesses, especially in the “life sciences” sector). To become a “Steam” metropolis, based on the acronym consisting of the initials for “science”, “technology”, “education” as well as “environment” and “arts” (all the arts and creativity cultures) and “manufacturing”. “Milan has the social capital, the economic capital, the scientific capital and the aesthetic capital to play this game successfully, according to Assolombarda, which sees the metropolis as the “engine for Italian recovery” but also as the place for European excellence in the most innovative industry. A difficult challenge. Yet a totally possible one. To be won.

Research from the University of Glasgow details what happens when focus on productivity unites with external orientation   

The culture of a business is influenced both by its own organisational culture and its perception of others. It’s a question of personal relationships, past events and social bonds: they all contribute to developing innovation and growth. Even, and perhaps above all, in the case of family businesses. The study of relationships between the different components of business culture, such as organisational culture, is an important path to follow.

This is just what Sylvie Laforet (Glasgow Caledonian University) has done in her work: “Effects of organisational culture on organisational innovation performance in family firms” published in volume 23 of Journal of Small Business and Enterprise Development.

The purpose of this research is to examine the effects of organisational culture on innovation activities within small and medium-sized family businesses. The aim is to establish a particular type of culture that will foster high levels of innovation within family businesses. The research has been carried out as a cross-industry survey of small and medium-sized family businesses, in the UK.

The cultural elements that have been taken into account by Laforet can be grouped into some general characteristics. These include external orientation, a flexible and open organisational culture, internal structures based on trust and open communication. However, the business founder’s culture is of significance, as is the long-term cultural direction inside the business.

Laforet questions the sample-group businesses and collates the survey results to show that paternalistic cultures (particularly from the founder) have a negative effect on the ability of the family, and hence the company, to be innovative. On the other hand, “successful” family businesses have a culture of flexibility, proactivity and have an external focus.

Clearly limited by geography and by sample size, Laforet’s work is useful, though, in providing an outline to interpret other similar situations.  It also demonstrates how ingenuity and perspicacity continue to be two of the key elements of great entrepreneurship.

Effects of organisational culture on organisational innovation performance in family firms

Sylvie Laforet

Journal of Small Business and Enterprise Development, Vol. 23 Iss: 2, pp.379 – 407, 2016

A book that tries to explore the meaning and motivations underpinning the organisation of production for profit.

Business is driven by the ideas and “sentiments” of its managers and developers. Production organisations (business) are also the result (become a business) from the specific organisation of relationships established between people, to be complied with and respected.  Anarchic organisations, in other words, cannot exist.

For many reasons, it is vital to understand how capitalist enterprise actually works and makes “La natura dell’impresa capitalistica” (The nature of capitalist organisations) by Domenico Laise essential reading. The author combines all conventional and current interpretations of economic theory into a single treatise to produce an all-encompassing, pertinent explanation.

His treatise begins with an observation. According to the economic theory of organisations, capitalist enterprise is a hierarchy and a hierarchy is the most efficient, in economic terms, of all possible organisational structures.  But, hierarchies can be organized democratically or autocratically (undemocratic). Following this line of thought, Laise says, economic theory is not clear about why some capitalist enterprises adopt an autocratic organisation.

The book attempts to address this problem, starting from a clear and bold premise. “One of the main features of the capitalist enterprise,” Laise writes, “is the undemocratic management of the work process. The plant manager makes the rules and service orders (factory law), acting like an “autocrat”, and workers’ freedom therefore ends at the factory gates.”  Later on in the book, the author introduces another strong element into the discourse. “The main purpose of this book,” he explains, “is to explore the theory (…) that social welfare derives from efficiency, efficiency derives from autocratic hierarchy, hence social welfare derives from autocratic hierarchy, with the result that no form of social welfare would be possible without an undemocratic hierarchy. This book aims to highlight the problems inherent in this kind of syllogism.”

Readers are therefore taken on a journey consisting of three parts.  The first examines “the main features of a hierarchical organisation”; the second addresses “the theory of profit” while the third looks at links between organisation theory and theories based on an absence of hierarchies, ending with “Toyota Production System” or “World Class Manufacturing” approaches.

Domenico Laise’s book is, without doubt, a treatise to be taken at an easy pace: it is packed full of ideas and provocations, and is loaded with references to both conventional and more explosive versions of economic theory. “La natura dell’impresa capitalista” is a seminal work and should be read as such.

La natura dell’impresa capitalistica (The nature of capitalist enterprise)

Domenico Laise

Egea, 2016

Told in a book, success cases that combine production activity, social context and good management

A company needs to be an entity responsible for what it does. This is an important proposition, which is not always pursued with continuity and determination. Yet the majority of cases are of good responsible business. They also extend far beyond the exact perimeter of actual business and production activities. It is worth knowing them and knowing all about them.

This is what Mario Minoja (Associate of Business Economics at the Department of Communication and Economics of the University of Modena and Reggio Emilia) has done in “Bene comune e comportamenti responsabili. Storie di imprese e di istituzioni” (Common good and responsible behaviour. Stories of businesses and institutions), a collection of good responsible business management cases not just limited to companies in the strict sense of the word.

The presentation states that the stories have “been selected because they presented, based on the knowledge available, on the information gathered or on indications received, certain features of responsible management”. They are therefore stories which naturally share a common trait. Indeed, “responsible” management “appears to be attributable, in the first place, to the action of a leadership spurred on by the desire and by the will to achieve a production mission, disseminating and practising a set of values aimed at pursuing the common good of the company in keeping with the good of society: innovation, entrepreneurship, productivity and development”.

It is concrete practice on the field of countless theoretical manuals about business management.

The volume thus contains 11 case studies, organised into three parts: profit companies, no–profit companies and institutions. The stories to read include those of: Cucinelli, Gruppo Bruno, Gruppo Unicem, hospital companies, cooperation organisations, the Municipalities of Reggio Emilia, Sassari and Peccioli, La Fenice Theatre. In the end, there are no conclusions for the reader, no model to demonstrate (although mention is made of a second volume that is to contain teachings that can be deduced from these case studies). In the introduction, however, there is an extra explanation: every activity is successful when it is based on a “production mission”, a community of values and principles, shared management that does not conflict with the characteristics and ambitions of individuals.

Bene comune e comportamenti responsabili. Storie di imprese e di istituzioni (Common good and responsible behaviour. Stories of businesses and institutions)

Mario Minoja

Egea, 2016

Italy has to do more for productivity. This warning comes from the OECD, in early June, after a positive assessment of the economic growth and appreciation for the reforms launched by Renzi’s government. Now is the time to move forward: “The drop in investments due to the crisis has aggravated the slow-down of productivity, which has been in place for quite some time. To increase it, we need to accelerate the process of resolution of distressed bank credits, improve the mechanisms for the selection and implementation of investment plans in public infrastructure and increase the efficiency of administration”.

The warning by the OECD is an important one. This is because it focuses on a competent point to think about regarding a topic, the productivity crisis of the Italian system, which has recently made a come-back in public debate and in which politicians and social experts, economists and entrepreneurs are taking part.

The Chairman of Confindustria, Vincenzo Boccia, in his report upon taking over the helm of the organisation, tied productivity to salaries, insisting on the close relationship that needs to be established between these two elements, in view of contract renewals. An old way to address the issue, as the leader of Cgil Susanna Camusso cut short, while the heads of the other trade unions Cisl and Uil proved more open to dialogue. Naturally, the issue is relevant. It brings us straight to the revaluation of territorial and corporate contracts, where the productivity-salary exchange is clearer and which the government is in agreement on.

During the crisis, some businesses have grown, innovated, performed research, modified production processes and products, exported and purchased abroad, achieving major positions on the international markets: pocket multinationals, more innovative production supply chains, excellent quality manufacturing in mechanics and chemistry, pharmaceuticals and rubber, furniture, fashion and agro-industry. These companies are productive. They are competitive.

Yet, alongside them, the majority of businesses have in fact innovated very little, stopping and stalling on the domestic market, failing to grow, getting wrapped up in the limitations and restrictions of familistic and provincial capitalism. These companies are far from productive and competitive, they are “a large industrial body comprising mostly of companies that are unwilling to innovate and make investments”, in the words of Massimo Riva (L’Espresso, 2nd June). Indeed, this is the very area that we need to work on. With policies that stimulate innovation, growth, internationalisation.

“Productivity is the key word”, declares Minister for the Economy Pier Carlo Padoan. And he’s right. There is a side to productivity that is down to companies: greater investments, more effort on innovation of both process and product, greater aperture to the financial markets, to exports, to local and supply chain ties, which are all addressed by the clever analyses by the Censis survey by Giuseppe De Rita (with the requisite appendix of the relationship between rise in productivity and improved salaries, to stimulate with suitable favourable tax choices). There is also a necessary and improved system productivity that needs to be set up. This is a political responsibility.

This is where we come back to the warning by the OECD. Let’s look more closely. “Since 2000, productivity has grown by 1% against an average 17% of our European partners. During the same time frame, the cost of labour per product unit has risen twenty points more than in Germany”, asserts Ferruccio De Bortoli (Corriere della Sera, 31st May) according to the data from the Def, the government’s economy and finance document. The answer: more investments, more innovation, more “digital”, taking on the challenge of Industry 4.0, “a revolution of processes, time frames, distribution methods”. There are Italian companies that are already doing well and moving in this direction swiftly. The Italian system on the whole is behind, however.

Marcello Messori, a sharp economist, recalls another indication by the OECD, according to which “the average dynamics of productivity of factors and productivity of labour in a Country do not depend so much on the intensity of its innovations on the frontier as much as on their rapid and efficient distribution across the remainder of the economy. The delays in Italy therefore have two consequences. First: significant increases in the various forms of productivity accumulate in specific parts of the national productive apparatus and can cohabit for long periods of time with disappointing average dynamics. Second: to remove a crucial obstacle to growth, we need to identify the causes of the negative trend in Italy regarding the spreading of innovations and focus on remedying such causes, also using policy initiatives” (Corriere della Sera, 28th May).

Here’s the new underlying theme: micro decisions, in the corporate world; and macro or system decisions in economic policy and industrial policy.

“The long slumber of productivity”, declares Luca Ricolfi on Il Sole24Ore (29th May) recalling that “it is not only the productivity of labour that is stagnating, but the total productivity of productive factors (capital and labour)” and that Italian productivity is affected “by the complex of external effects, of collateral conditions and contexts which make a smooth and dynamic economic life possible: efficient and non-pervasive bureaucracy, fast civil justice, clear regulations that are easy to apply, speedy compliance with a limited number of regulations, well-established administrative powers, reasonably stable laws and regulations, definite time frames to start up a business… But also: investments in material and immaterial infrastructure, support for research, enhancing the value of knowledge”.

Productivity, continues Ricolfi, “has diminished in the majority of services (with very limited exposure to competition) but to compensate it has increased in the manufacturing sector and in agriculture”: these sectors have seen movement on the market, according to market cultures.

The best companies, starting with manufacturing of the “fourth capitalism”, “pocket multinationals” and the most innovative production supply chains, are doing their bit. The whole industrial world needs to insist on innovation and transformation. Yet it is the entire Italian system which needs to focus on more and better, as regards productivity and competitiveness, on reforms, public investments, “digital” economy, breaking down bureaucratic barriers, corruption, dysfunctions of a terrible “public machine”. Indeed, by re-reading the warning by the OECD on the crisis of productivity where we started. It is a genuine political challenge. One about “policy” and “politics”: about a vision of development and concrete decisions

A study by the Bicocca University investigates some of the conditions which lead to good entrepreneurial results

The success of a good business depends on the entrepreneur and on his team, but also on other factors. Conditions, personal history, environment often make the difference. Obviously, there are exceptions everywhere, but what determines the work and the results of an entrepreneur is also a context in which family and family culture also count. To understand this better, reading “Imprenditorialità e crescita delle piccole imprese familiari artigiane. Analisi di un campione di artigiani artistici fiorentini” (Entrepreneurship and growth of small family-run craft-based companies. An analysis of a sample of Florentine artistic craftsmen) by Niccolò Gordini and Elisa Rancati (from Bicocca University in Milan) should prove interesting. The text relies on research conducted, focusing attention on a particular type of business – Florentine artistic craftsmanship -, yet it provides results that can also apply to other areas.

The thesis at the basis of the work is simple:  “The growth of small family-run artistic craft-based companies – the authors explain -, is strongly affected by the level of entrepreneurship of the craftsman. The personal characteristics of the entrepreneur and the number of generations involved in running the company can be significant variables capable of affecting the level of entrepreneurship and the growth of the company itself”.

The demonstration of this proposition starts with an analysis of the “literature” on this topic, then includes a statistical analysis of the sample of Florentine companies concerned by the analysis. Yet the text is made easier to read by the use of certain tables and charts which sum up the fundamental steps of the research, such as, for instance, the summary chart of the “personality traits” used to measure entrepreneurship.

The results are partly unexpected. According to both authors, for instance, the strictly personal traits of the craftsman entrepreneur are not the only things that affect the level of entrepreneurship, whereas, secondly, family involvement has a positive and significant effect on entrepreneurship and, lastly, entrepreneurship is a key factor to guaranteeing the growth of small family-run artistic craft-based companies. One of the concluding steps summing up the work is significant. “Entrepreneurship represents (…) – the authors explain -, the answer to the growing complexity and dynamic aspect of global markets, an answer that does not need to be solely understood as explosive innovation: small incremental changes in the proposition of value can in fact also constitute an effective way to facilitate compliance between supply and demand and promote growth”. In short, being a genuine entrepreneur may also mean a subtle condition in acting, one that appears insignificant but concretely determining.

Imprenditorialità e crescita delle piccole imprese familiari artigiane. Analisi di un campione di artigiani artistici fiorentini (Entrepreneurship and growth of small family-run craft-based companies. An analysis of a sample of Florentine artistic craftsmen)

Niccolò Gordini, Elisa Rancati (Bicocca University in Milan)

www.researchgate.net, May 2016

Condensed into a book are the concepts and instruments needed to build up social responsibility within companies

A company is a citizen of the social system within which it operates. This is a case of the final frontier of what is referred to as Corporate Social Responsibility (CSR) and which brings together concern for the balance sheet and for the manufacturing process, with concern for the effects which arise from and on a company as a result of the continuous interaction between it and the rest of the world. In other words, a good company seeks not only profit and product efficiency, and not even just the quality of the image which the “world” has of the company’s work. What counts most today is the intimate substance of a company’s actions, the substance constituted by its products and by the cultural identity which accompanies it.

Reading “L’identità culturale delle aziende” (The cultural identity of companies) by Remo Bassetti, which has just been published, is therefore a good idea for those who seek to begin to understand a little more the inter-relationship between the image, the product, the manufacturing culture and the identity of a company. The book starts off from a reasoning similar to what has just been stated: mere appearance today seems insufficient to consumers who appreciate and look for the authenticity of a company, its ability to position itself on a relationship level and its vision of the world. Its CSR is certainly important, but on its own is now no longer enough.

For a company too, as for an individual, it is becoming fundamental to have an identity. Mr. Bassetti’s book therefore debates the theme of identity, accompanying those who read it along a theoretical and empirical path until they reach the tools with which to create a corporate identity. Quite naturally moving from those which have already been achieved thanks to the journey made up to the present day – image and relationships with the market -, to arrive rapidly at the concept of a company’s identity and thus at its connections with CSR and finally at the tools to be used to build such an identity.

Both the spirit and the contents of the book, then, can be understood right from the first lines, and the reading moves ahead swiftly, as the book switches between classical theory and practical examples.

There are also numerous suggestions which are thought-provoking. Such as that of the market considered as equivalent to a place of conversation and not simply reduced to a place for exchanging goods. From this concept derives an immediate subsidiary consideration: “A company – writes Bassetti -, must be an entity with a defined personality capable of sustaining conversations and reinforcing relationships”. And not just that, because if a company looks for and finds its own identity, this must be a tool for engaging in competition, by providing elements of differentiation vis-a-vis competitors and getting the market to look again at the values and the culture which underpin the simple production of goods and services. “My theory – writes Bassetti -, is that a company which expresses fully a cultural identity is able to develop, solely as a result of that, links which are deeper and more authentic with people, and in this way has the advantage of becoming fixed in the memory of those who subsequently need to analyse the decisive reasons for their choices at the time of purchase”. Identity and company culture, therefore, not simply as the result of a theoretical passion to construct new corporate concepts, but to validate this successfully in markets which are ever more difficult and competitive.

L’identità culturale delle aziende (The cultural identity of companies)

Remo Bassetti

Franco Angeli. 2016

A piece of research by the Milan Polytechnic university discusses the management of work on the part of those in charge of the organisation of production

Time is a factor in production and the way in which it is managed is also a contributory factor in company productivity and the success of the organisation. As a question of technique and of organisation, but also of culture, the use of working time is one of the crucial aspects of production. Even, and indeed especially, today. It is also one for whoever, be they entrepreneur or manager, is at the top of the organisational tree. “Analisi della gestione del tempo dei CEO: il caso italiano” (Analysis of time management by CEOs: the Italian case) – a work by Angela Vitale in the context of the School of Industrial Engineering and Information at the Milan Polytechnic university -, is an interesting read for those who wish to examine more closely how company directors position themselves in the matter of the use of their time.

This text, following an analysis of writings which exist on the use of time in companies, fits into the context of the activities of the StiMa Project (by the Milan Polytechnic university), whose purpose is to study how the top managers from Italian companies organise their time, their various working styles and the impact which these have on the results of their companies. It is in this context that 241 managers were asked to reply to questionnaires in order to understand directly from those interested parties how they organised their work, and, specifically, their time.

The results confirm the basic idea: the time management of a company director is a “variable which influences company performance”. It is from the details of the numbers, however, that the differences between one company and another emerge, and these differences reflect the basic origins of the company and the culture which permeates it. As between a family-owned company and a publicly owned one, the differences in the choices of its managers are already well-known, but they can also be perceived in the way in which these managers utilise the hours available to them. In the case of non-family-owned companies, the CEOs are more inclined to meet people from outside the company, and more attention is paid to the unions and to governmental bodies; in contrast, the CEOs of family-run companies “have greater interaction with the financiers and people from other companies”. There are important differences too between those who work for companies in the North of the country compared with those in Southern Italy, and between younger managers and those who, in contrast, have several years of experience under their belt.

The work by Angela Vitale must be taken for what it represents: a piece of research based on a sample of soundings which is statistically defined as “restricted”.  It is nevertheless a piece worth reading in order to understand the general traits in the use of a factor in the manufacturing process whose importance – including culturally – is often undervalued.

Analisi della gestione del tempo dei CEO: il caso italiano (Analysis of time management by CEOs: the Italian case)

Angela Vitale

School of Industrial Engineering and Information, Milan Polytechnic university, 2015

For Italy, an “industrial policy” is helpful. Or, to be more precise, a new and better industrial policy. Certainly not State intervention to support certain sectors categorised as “strategic”.  Or, even worse, support for companies in difficulty. And not even the protection of the so-called “Italian-ness” of companies (that is to say the maintenance of their ownership in Italian hands). What are useful, if anything, are the choices and public investments required to stimulate and attract private investment, both internal and international. Material and immaterial infrastructure. High-quality research and training. The creation of conditions which allow companies to grow, starting with an efficient administration of public services.

For a while, people have been talking about this. And the question of “should we” and “how should we” set up an industrial policy is now back at the centre of public economic discussions not least thanks to the debates linked to the recent general assembly of the Italian industrial federation Confindustria (where a new president, Vincenzo Boccia, was elected), to the positions adopted by the new Development Minister Carlo Calenda (“No more scatter-gun incentives”, “an end to those focus meetings behind the closed doors of a Ministry” to decide whom and what to finance) and to the publication of a new book by Franco Debenedetti, “Scegliere i vincitori, salvare i perdenti” (Choosing the winners, saving the losers), Marsilio, who, right from the title, expresses a clear idea, a no “to the insane concept of industrial policy”.

He is a libertarian liberal, Debenedetti. With a past career as an entrepreneur and a manager (and thus with financial experience on the ground, not simply intellectual knowledge) and then as a politician, as an MP in the ranks of the PD Democratic Party, with positions which were often out of step compared with traditional “left-wing” economics, and prone to public pronouncements. Here, in the pages of his well-documented and compelling book, the argument “against industrial policy” is explicit. Not without good reason, bearing in mind the inauspicious experiences of certain eras of the IRI, of the ENI but also of the EFIM and the EGAM state-owned enterprises, the dissipation of the “State Christmas cake”, the violation of competition, the wastage of public resources.

The debate is open, therefore. Historical. And present day.

With its choices of public investments for the construction of major infrastructure projects and with the activities of the IRI, ENI and Cassa del Mezzogiorno (Southern Italy Investment Bank) to sustain the transformation of Italy from an agricultural country into a European industrial powerhouse, the role of the State had been helpful. But then everything became tarnished through the distorted exchange between public spending and the achievement of consensus. From another point of view, that of private capital, here was “capitalism without capital”, the controversial role of Mediobanca, the protection of pacts with the unions, the “capitalism of relationships” cultivated in the so-called “cosy parlours”.  The well-known families somehow manage to save themselves, and market forces are kept on the margins. There is a perverse inter-relationship between entrepreneurs and politicians, with their survival in positions of power and profit, from the 1950s until the Tangentopoli corruption scandal. And so the distorted idea of the “primacy of politics” and protectionist policies on the part of the big industrial groups (car manufacturers, primarily), linked to the intrusiveness and resistance of an inefficient Public Administration, prevented for a long time, in Italy, the growth of a robust “market-oriented culture” and lively competition.

The crisis of the large company, particularly state-owned, which had discarded market-oriented culture and the contemporaneous flourishing (1970s and 1980s) of a widespread network of medium- and small-sized enterprises which moved into the market, the success of the “pocket-sized multinationals”, the “privatisations” signed off by Carlo Azeglio Ciampi and Giuliano Amato as key EU measures (which were important, even though limited and inefficient, such as the “hard kernel” for Telecommunications) and the new motivations of international competition, radically change the macro- and micro-economic picture in Italy too.

There remains significant resistance – political, union-based, but also from the echelons of financial and economic power. And notwithstanding the intentions to reform these areas, “local council capitalism” which has never been subjected to a crisis, and the dominance of the long arm of the public sector in services, energy and transport, remain solidly entrenched. This is the bad industrial policy, the one which needs to be criticised and finally archived.

It is worthwhile underlining, in contrast, the qualities of an Italy which remains, even after the crisis, the second-ranking manufacturing country in Europe, with the manufacturing sector accounting for 29% of GDP in Lombardy, and which also reaches nearly 27% in the regions of Tuscany, the Marche and Umbria (the average for Italy is 17%, against the EU target of 20% by 2020). This is also an Italy which is growing, despite everything, thanks to the dynamism of the companies which have an international markets-based culture.

The new industrial policy must be built on these foundations. From a positive relationship with the challenges offered by the new technologies (industry 4.0, digital manufacturing, big data, cloud computing), and by reinforcing the competitiveness of Italian companies.

“Resources for Industry 4.0”, is what has been promised by Minister Calenda at the general assembly of the Confindustria. Not incentives for the chemical or mechanical industries, or for shipbuilders or motorcar manufacturers (the old industrial policy, essentially). But infrastructure (starting with high-speed internet, without which no digital manufacturing is possible) and support for companies which innovate, improve product quality and the sustainability of production (lower water and energy consumption, a “green” industry), which carry out research with universities or public and private research bodies, which strengthen their capital base, which increase their size, and which go abroad to seek out niche markets and acquire other companies. No economic nationalism, no protectionism in the name of the so-called “Italian-ness of ownership”. “For me an Italian company is one which works in Italy”, interjects Calenda.

Today therefore “setting up an industrial policy” signifies laying down the conditions for growth of the market and of companies: in addition to improved material and immaterial infrastructure, the country needs public investment in training and research, a public services administration with a “light touch” and which is transparent, and legal and tax systems which are efficient and effective.

The “industrial policy” is, very largely, that of favouring a “market-oriented culture”. And of providing “public assets” (the training of engineers and technicians, just by way of a further example) in order to allow companies to feel at ease in their market, in the European and international markets, handling the challenge of the competition for quality.

So, what should the culture be? One of innovation. And of sustainability, both environmental and social. Of a culture linked to the company. And one of a company which can compete. In which sectors? It is not up to the Sate or the Regions to dictate these. Only the autonomous choice by companies themselves. Even if a little late in the day, in Italy people are finally talking about an industrial policy which helps the market.

An article that was just recently published addresses the complex topic of relations between Corporate Social Responsibility, material production and social relations

The modern company is a citizen of the social system within which it operates. The idea now seems to have been acquired from the theory, but it obviously needs to be put into practice on a large scale. Because being citizens is a condition that implies rights, but duties too. This situation also applies to companies. This is, in fact, the major topic of Corporate Social Responsibility. Which is now a complex and multi-dimensional matter, to be interpreted according to the company’s internal and external circumstances.

“Prospettive di domanda ed offerta di benessere multidimensionale: una visione integrata della misurazione del benessere individuale e della responsabilità sociale d’impresa” [Perspectives of supply and demand of multi-dimensional well-being: an integrated view of measuring individual well-being and corporate social responsibility] – written by Dalila De Rosa and by Lorenzo Semplici from LUMSA University and published a few weeks ago -, provides a useful screenshot of the “state of the art” of relations between Corporate Social Responsibility, corporate citizenship, social and individual well-being, in addition to organisation of production. The idea at the heart of the article, in particular, is to analyse the production of social and environmental value of companies, beyond mere material value, starting with the integration of two sides of the same coin: economic and material well-being and immaterial well-being. In addition, De Rosa and Semplici lead the reader along the evolution of the concepts of well-being and of the social role of companies based on the subsequent processes carried out by the United Nations and then by the European Union, but also recalling the Italian Constitution in an ongoing exchange of references and investigations. With unusual views, such as the one deriving from the Green Paper published by the European Commission (2001) which sees Corporate Social Responsibility as “the voluntary integration of social and environmental concerns of companies into their commercial operations and relations with the parties concerned”.

The authors also address a crucial theme for those in charge of production: measuring the result of what is produced and, in this case, the level of well-being that the company manages to achieve from its activity in relation to the society with which it has relations.

What emerges is a complete and articulated view of Corporate Social Responsibility, of the possibility of measuring and the ties between economic profit and social profit with unexpected developments: in conclusion of their work, for example, the two authors forecast “the creation of meeting places between citizens, companies and institutions” where they can try to grow relations between material production and well-being production.

De Rosa and Semplici’s work is definitely rather complex but it is well worth reading.

Prospettive di domanda ed offerta di benessere multidimensionale: una visione integrata della misurazione del benessere individuale e della responsabilità sociale d’impresa [Perspectives of supply and demand of multi-dimensional well-being: an integrated view of measuring individual well-being and corporate social responsibility] 

Dalila De Rosa, Lorenzo Semplici

Working papers, no. 11, April 2016, University of Bologna, Aiccon