“Read novels to become an engineer”. With this effective and eye-catching headline La Stampa of January 10th summed up recent decisions by prestigious US universities, Harvard and Princeton, Stanford and Yale, to introduce literature courses for students of economics, engineering, medicine and various science subjects. A re-evaluation of literature therefore in order to gain a slightly better understanding of people, different civilisations and the world. An encouragement to seek out new fusions of the humanities and science. If it is true, as Mallarmé claimed, that “everything in the world exists in order to end up as a book”, then we have to learn to view good literature more carefully and with greater respect, also in order to manage a company, carry out a research project and construct new economic and scientific theories, at a time when original ways of coming through the major economic crisis are being tried out. The decision is an important one for the very reason that it comes from the USA, a country attracted by tendencies towards sector hyper-specialisation. This endorses the quality of European culture, accustomed to complexity, and of its actual corporate culture, more inclined to adapt creatively to the twists and turns of different environments compared to the rigid determination and dominion of the cultures in English-speaking countries. Moreover the Politecnico of Milan and that of Turin as well as France’s grandes écoles have for some time also included philosophy, writing and drama in the curriculum, alongside specialist engineering subjects. Technologies and relationships, Galileo’s telescope and his reflections on the meaning of a changing world, atomic energy and its moral implications, the developments of the Web and the consequences for the spreading of culture, participation or solitude, the stepping-up of business or the possible slowing-down of the awareness of reconciling interests and values, the salt of a good democracy. Paolo Bertinetti concludes by saying in La Stampa: “literature is useful in doing things that have nothing to do with literature well. We can add however that it is useful in itself, not only for learning how to write sentences correctly but also to learn to get to know human beings and the world. Literature is communication of experience. Those who teach literature, teaching how to read that which may have remained unknown, help literature to apply its profound meaning”.

A journey towards the so-called economy of sharing, closer to people and more focused on others yet without neglecting profits. A short trip through the number of pages used along the way (not even one hundred) and throughout the history of economics, of business and of living in society, studded with names which, for various reasons, arouse and have aroused discussion in the West: Plato, Aristotle, Keynes, Darwin, Pope Benedict XVI and Adam Smith. What Stefano Zamagni (Catholic economist who for years has sought to bring economics and management back to a vision closer to humankind) achieves in Per un’economia a misura di persona [“Towards Economics on a Human Scale”] is progress, not always easy but very interesting, towards an objective which answers a question: “is it possible to make markets civil and therefore an environment which civilises all of society?”. In other words: does it make sense to pursue an economy which succeeds in “setting a value on both human dimensions, expressive and acquisitive, and not only acquisitive as is the case today?”. Zamagni explores a delicate and complex area of economics, business and social living, an area which attempts to bring together concepts such as those of “sharing”, “reciprocity”, “brotherhood”, “equality” and “liberty” with those of “markets” and “profits”. He does this using a vast apparatus of economic, philosophic and moral literature and giving examples such as that of Chiara Lubich and the Movimento dei Focolarini, and also recalling the epic stories of Ulysses (who defeated the sirens by tying himself to the mast of his ship and therefore temporarily denying himself freedom) and of Jason (who instead managed to beat them without denying himself freedom but by combining rationality and reasonability).

All this to demonstrate how to arrive, as the title of the small book says, at an economy on a human scale (made up of freedom, equality and brotherhood) which, according to the author, is the only one able to relaunch modern society, battling a crisis unlike that of 1929 and instead more complex, profound and structural.

Per un’economia a misura di persona

Stefano Zamagni

Città Nuova – Le Cattedre di Sophia, 2012

Manufacturing is still important, increasingly important. In the age of computer technology and immateriality, of finance and spreads, the manufacturing industry is still an area that exists and must exist. The problem is having the capacity for maintaining it and making it grow.

These are the arguments of Gary P. Pisano and Willy C. Shih (economists and both lecturers at Harvard Business School), in their “Producing Prosperity: Why America Needs a Manufacturing Renaissance”.

Pisano and Shih, however, do not just pay tribute to industrial savoir-faire, to the concrete nature of real production as opposed to finance. The two scholars go further, explaining that modern companies still have, like before, commons, although they are immensely more complex compared to the past. These are for example technological know-how, managerial capacity, specialist abilities rooted in the work force, competitors, suppliers, customers, cooperatives, research and development and universities. All this flows between companies and links them up, creating a territorial manufacturing network which becomes essential for growth and innovation. A situation which takes its moves from the local arena to become global and to become local again. All this in a virtuous circle which, according to the two researchers, cannot and must not be put down but which instead has to be sustained and nourished with managerial skills and political foresight.

In order to explain this better Pisano and Shih adopt, among other things, an example: when in the 1980s the production of semiconductors moved to Asia, it took with it myriad skills, processes of production of electronic material, capacity for assembly and sophisticated tests which created industrial commons in turn necessary in order to produce an entire range of advanced electronic products with high added value. A single company did not relocate but a community of companies moved which changed the life of entire areas. Exactly like, in another example given by the two authors, the case of state-owned pastures, once very common, which supported and fed rural and small farm economies up to relatively recent times. Once they had been cancelled out (equivalent to today’s industrial commons), an entire economic set-up was swept away.

The two Harvard economists reach three conclusions: when a country loses its manufacturing capacity, it also loses the ability to innovate, industrial commons are therefore a sort of platform for growth and, finally, the erosion of this is not at all natural and inevitable.

Why America Needs a Manufacturing Renaissance

Gary P. Pisano – Willy C. Shih

Harvard Business School – Working Knowledge

October 2012

“Manufacturing the future”, writes the McKinsey Global Institute in research from November 2012. Re-evaluate industry after the years of the inebriation of speculation, the source of the economic crisis. Build new theories of production, distribution and consumption, in the awareness that the future, even in countries which were industrialised many years ago, lies in quality manufacturing, socially and environmentally sustainable. A clear prospect for Pirelli corporate culture and already described in the periodical considerations of this blog.

A focus on manufacturing therefore by one of the leading global consulting firms, McKinsey. With a relaunch too in those countries (USA and Great Britain) which from the Eighties onwards have neglected industry, preferring to stake on so-called “innovative services”, beginning with finance. Now instead there is talk again of quality in “doing things and doing them well”. Corporate culture in design and products. German strength, with Europe in its sights, and Italian excellence, on whose products, as well as increasing manufacturing quality (safety, efficiency, practicality, sustainability, high-level performances), design also has a positive influence. Industrial design which gives aesthetic shape to the product, both in items of clothing and furniture and in chemical and rubber ones (high-level design for example, as in the tread of a tyre) and in cutting-edge mechanical engineering products, from the automotive sector to highly automated machines.

The Italian manufacturing industry ranks second in Europe, behind Germany, and fifth in the world, even though followed closely by particularly dynamic countries such as Brazil, Turkey and South Korea. A positive assessment should be made of the Fondazione Edison data which mention (2011 data) 1200 products for which Italy as an exporting country beats Germany. If we leave out of the commercial balance oil and food products and concentrate instead on non-food manufacturing products, according to the statistics of the World Trade Organisation, we discover that Italy is one of the 5 G20 countries (with China, Germany, Japan and Korea) to have a structural surplus with foreign countries of manufactured goods. And, due to a series of activities, better than that of Germany.

How can such a record be defended in increasingly selective global competition? In other words how is it possible to strengthen the contribution to development which comes from the best manufacturing industry? An “industrial policy” is needed to stimulate research, innovation and growth in size of companies, tendencies towards internationalisation, in the dual dimension of exports and direct investments on the more dynamic markets, from Asia to Latin America. “An agenda for the manufacturing industry”, maintains Fondazione Edison, also through a reduction in the fiscal wedge with priority given to those in the industry. A support plan is needed in other words, targeting the four main production areas in Italy (food and agriculture, clothing and textiles, furniture and automation, advanced mechanical engineering).

A positive future made up of improved personal relations, clarity of intent and different work relationships. This is the vision of a “new communal civilisation” as foreseen by Antonio Galdo (journalist and writer, concerned with issues of waste and the developments in public life), in his recent book “L’egoismo è finito” [“An End to Egoism”]. In just over one hundred pages he tells of a change underway in the social paradigm, i.e. a move from egoism to the application of new theories of communal living in society and at work.

Galdo starts with a sharp and provoking sentence – “this is a book about love” and continues with a quote by Aristotle. However the book also discusses forms of economics, society and communal living that differ from current ones. He does this with numerous examples, new ways of producing (co-working) and of living (co-housing and smart cities), starting with an observation: “for decades we have blocked out the vital need to be together, relinquishing the energy given off by a community when the bonds that join together people and things, places and identities, interests and emotions take shape”. Now instead “the major economic crisis forces us to seek new fundamentals, and not just economic ones”. At work and in social dealings a new way of seeing things is gaining ground. Galdo then discusses new eco sharing, from city allotments to vertical gardens, the effective appeal of swapping versus the individual pleasure of possession, the sharing of ideas via Web technologies and a new conception of work and the workplace.

Apparently a long way from the more pressing problems of corporate management, Galdo’s reasoning instead comes very close to the themes of a new entrepreneurship, far from the dichotomy of boss and workers, which sees the factory, territory, corporation and labour closely linked in a single destiny which does not necessarily have to be negative.

L’egoismo è finito

La nuova civiltà dello stare insieme

Antonio Galdo

Einaudi, 2012.

How do firms, universities and public research centres work together in Italy?

This is an important question for understanding the capacity for research and innovation of Italian production and also how close Italian corporate culture is to the rules of R&D. An attempt at answering it has been made by economists from the Banca d’Italia (Davide Fantino, Alessandra Mori and Diego Scalise) with “Collaboration between firms and universities in Italy: the role of a firm’s proximity to top-rated departments”, a working paper published in October. It is based on an observation: in Italy there is a model of “innovation without research” applied by firms in general and which requires special conditions for implementation.

A situation that is typical in Italy lies at the root of all this: the cost of R&D in relation to the GDP is 1.26%, as opposed to a European average of 2. As part of the overall expenditure the share borne by companies, usually the most dynamic, is approximately 50%, a value below the average of the main European countries. In other words R&D in Italy is supported by the public sector and above all by public research centres and universities, which enter into collaboration agreements with firms. But how?

Ease of dialogue between firms and research bodies becomes decisive. In order to gain a better understanding researchers from the Banca centrale used a series of mathematical models, applied by taking account of the distance, the quality of research bodies within the territory, their policies for adding commercial value to the research results, the importance taken on by the various study areas for the different economic sectors and the main features of firms.

The results are simple. The main decisive factor of the probability of an agreement between firms and universities is the “proximity” of the two parties. Furthermore the proximity to a generic university is of no influence. Small and medium-sized firms appear more affected by physical distance, while large ones tend to choose as partners the universities which better valorise the results of own research irrespective of location.

The end result, not reassuring, is that public research cannot fully replace work on innovation within firms.

Collaboration between firms and universities in Italy: the role of a firm’s proximity to top-rated departments

Davide Fantino, Alessandra Mori and Diego Scalise

Banca d’Italia, Discussion Topics – Working papers

no. 884 – October 2012

Quality domestic product, or QDP. Unlike the GDP it is a gauge not so much of the wealth produced in whatever way by the country as a corporation but instead of the production of goods and services linked “to the quality of the environmental and social context, legality and the adding of value to territories and communities”. This good definition is by Ermete Realacci, leader of Symbola (Il Sole 24Ore, 18 December), who, with Unioncamere, analyses the green economy and the soft economy, i.e. the virtuous combination of, in fact, quality manufacture and hi-tech services, representing a real strength and competitive advantage in Italy and bringing together high technology, broadband and craft skills, as well as a historic sense of aesthetics and innovation. The resulting effect is a boost for exports and overall growth. Realacci maintains that overcoming the crisis requires a true turnaround in thinking, a new corporate culture and the processing of new production and consumption paradigms (as Einstein said, “we can’t solve problems by using the same kind of thinking we used when we created them”). Environmental and social sustainability and quality therefore and new indicators – the QDP in place of the GDP. By looking at the figures we discover that the quality domestic product has achieved a value of 460 billion, that is to say approximately 47.9% of the GDP and even 56.2% in the northwest areas, those more industrialised, internationalised and open to markets (quality as a strategic asset of competitiveness). Realacci maintains that “regions stronger in the industry of culture and in the creation of economy linked to culture generally have a greater vocation for the production of quality”. The areas are the agriculture and food industry, green chemicals, cutting-edge mechanical engineering with the added bonus of an excellent design of the machines and production processes with a strong saving in water and energy, etc. “Industry is culture”, as is often heard at Fondazione Pirelli. Our growth, quality growth, depends on this both ancient and modern awareness.

A new industrial revolution. This time not only described by a theory yet to be demonstrated but by facts and examples, from Toyota to Fiat via Ford, from the pin factory of Adam Smith up to Apple, a sustainable economy and that of energy. Peter Marsh, in his newly published The New Industrial Revolution, tells of the new (some would say fourth) industrial revolution, starting with an account of 250 years of industry and of innovations to reach a conclusion: the factories of the past, those located in a specific geographical place and closely linked to local history, are irremediably destined to disappear. It’s as if Marsh were saying that the future of the economies of the USA and Europe, and Russia and Japan, is at stake.

It’s quite clear that Marsh, journalist with the Financial Times, is very good. A flowing and attractive prose, a serried sequence of examples and the economic history of two and half centuries narrated like a novel make this non-fiction work a rite of passage for those seeking to gain a better understanding of the modern age.

One of Marsh’s theories is that, faced with the surge of new economies such as those of China and India, those based on traditional-style manufacturing now occupy a space destined to become increasingly tight. This is not a “simple” emerging of the typical production systems of areas geographically remote from ours, but the birth of new ways of tackling the market. Marsh goes over the features of the new technologies and of the production of custom-made goods, examines the effects of the participation by many more countries than before in the world economy and the growing importance of forms of sustainable production.

He then goes further. The new industrial revolution is recounted from multiple viewpoints and from two in particular: that of consumers, targeted by contemporary and multiple offers, and that of producers, forced to respond to previously unexpected opportunities in order to stay on markets that are larger and more complex each day. All this with an “old-time editor” language, capable of attracting attention with a story rather than with dry facts and figures.

The New Industrial Revolution

Consumers, globalization and the end of mass production

Peter Marsh

Yale University Press, 2012

The basic idea is simple yet requires effort: communication is always a challenge, even for multinational companies. Saying things, above all saying them clearly, means being involved, every time, yet is also necessary in companies, big or small. Talking to one other is required in order to work better, produce more efficiently and, in the end, increase revenues and number of jobs. In fact in a complex society such as the one where companies operate today one of the key tools for improving corporate management, and above all end results, appears to be that of effective, serious, constructive and productive communication. This is easy in small firms but more difficult in larger ones.

An analysis of “conversational leadership” and the possible modes of application has been made by Carmen Nobel (senior editor for Harvard Business School Working Knowledge) who, in a short article, (The Power of Conversational Leadership), covers in depth the essential aspects of the issue, basing on the study by Talk, Inc: How Trusted Leaders Use Conversation to Power Their Organizations by Boris Groysberg (lecturer at Harvard Business School) and Michael Slind (communication consultant to numerous multinational companies).

Both article and book go into depth regarding the theoretical and practical aspects of the issue. Also basing on paradoxical situations: in many cases the company has a managerial group which is decided about the corporate strategy to be adopted, but investigations within the organisation reveal that nobody else has the slightest idea of what to do.

Carmen Nobel therefore supports the idea of “conversational leadership”, to be applied to all the processes of a company. How? Action is possible on the basis of four principles which obviously have to be accepted by management: the creation of “mental intimacy” (i.e. concordance of ideas and principles of action), the generation of ongoing interaction, the enabling of effective inclusion in the conversation of all the members of the organisation and clear representation of the objectives towards which the entire company is working. With one basic truth – productive conversation represents a competitive edge for the company.

The Power of Conversational Leadership

Carmen Nobel

Harvard Business School Working Knowledge.

July 2012

Monday, 19 November at 19:00, the Foundation will be inaugurating the exhibit “L’Umanesimo industriale di Pirelli. Dalla natura alla produzione, con gli occhi dell’arte” (Pirelli’s Industrial Humanism. From nature to manufacturing through the eyes of art).

Organised in conjunction with the eleventh edition of Corporate Culture Week, which is promoted by Confindustria, the exhibit tells the story of cultured men working with Pirelli to experiment with original blends of technological research, manufacturing and communication making use of the tools of art. Products, laboratory calculations and other techniques will be depicted using the languages of nature, creativity and beauty.
In short, industrial humanism.

The exhibit will provide an opportunity to present one of the most important collections kept in the Pirelli Foundation’s Historical Archives: over 300 technical drawings, restored and now available to the public, depicting the various models of tyres produced since the 1950s. Some of the most famous include:  “Cinturato”, “Stelvio, “Rolle”, “Atlante” and “BS3”.

The inauguration is open to the general public.