The Pirelli Foundation hits the newsstands in New York. In the article “A Tour of Italy, and a Century of Stunning Cars”, first published online and now in print, the New York Times has in effect devoted a study to our Foundation. The article is signed by the automotive expert Stephen Williams, who visited the Foundation last September, and it highlights the wealth of the historical and artistic heritage built up by the Pirelli Group. And, on the subject of the company’s Historical Archive, it emphasises its work to promote culture, observing how “students and researchers are allowed access” to its documents.

Williams also notes that, with its exhibitions and displays that include “paintings, films and Pirelli’s collection of ultrasophisticated advertising posters”, the Pirelli Foundation plays an active role within the company “to propagate art and culture among its work force”.

The Times reporter’s trip to Italy continued with a visit to the Museo Storico Alfa Romeo and to MAUTO, the National Automobile Museum in Turin.

The story of his grand tour across the north of our peninsula is a celebration of the Made in Italy brand and the history of mobility in the American newspaper that is best known and most widely read across the world.

Read the full article in pdf

A recently published article summarises the relationship between the two elements representing a most significant and complex dyad

Social ethics combined with corporate ethics: good corporate culture, in other words. An accomplishment difficult to achieve and that, on close examination, is constantly evading us, forever propelled forwards by facts and occurrences. This is the starting point adopted by Claudio A. Testi – entrepreneur and philosopher – in his article entitled “L’etica sociale di fronte al sistema tecnico: la sfida e le azioni” (“Social ethics and the technical system: challenge and actions”), a contribution to the October issue of the journal Oikonomia.

Testi specifically sets out to tackle one of the most complex topics of our times: how to apply social ethics to the “technical-economic system” (TES), which he defines as “a system essentially composed by three elements: A) labour-production, B) consumption-needs,

1. C) scientific education-research”. In other words, the complex, multifaceted and ever-changing whole that encompasses and includes all that’s human and technical and that is currently shaping our society in an extremely intricate manner, as each “element affects the others”. Testi juxtaposes this complex whole with social ethics – to be understood like any other kind of “ethics”, that is, not teaching us how to “know what is good and fair” but leading us to “become good and fair through concrete actions.” He then finds a correlation with our current situation, including the obligation of facing the effects caused by the COVID-19 pandemic.

The author goes on to analyse the social ethics/TES dyad from different perspectives – economic, social, cultural – before reaching some conclusions. As he writes, “For social ethics to generate a positive impact today, we need to understand the conundrum posed by the Technical-Economic System and acknowledge that concrete actions are not sufficient to ‘solve’ it. We also need to be aware that time and persevering determination are needed in order to change the technocratic future that is currently upon us. This is a tremendous, albeit unavoidable, task, yet we should not give in to despair and despondency. We have our own limitations, and as such we cannot immediately change everything; we can, however, dedicate the time we have available to a just and good cause.”

Claudio Testi succeeds in summarising a topic that could not possibly be exhausted within a single journal article – indeed, it’s a topic that needs constant exploration and updating. Nonetheless, his contribution stands out for its clarity and conciseness, and for providing readers with the basic foundations required to embark upon the important path leading to cultural development.

L’etica sociale di fronte al sistema tecnico: la sfida e le azioni (“Social ethics and the technical system: challenge and actions”),

Claudio A. Testi

OIKONOMIA, YEAR XX – N. 3 OCTOBER 2021

Pierluigi Ciocca’s latest book goes straight to the heart of the poverty/wealth issue while also outlining a possible path for development

Rich people are few, poor people are many: hence, inequality. This is not only an ethical, but also an economic issue, as it challenges the very foundations of our development and growth. An issue that, today, is back under the spotlight, not just discussed in economists’ analysis reports, but on the news, too. And as such, it has to be acknowledged by companies and governments alike.

This tangle of inequalities – of wealth and poverty – is both very modern and very ancient, but it now needs unravelling, though it won’t be an easy feat. In order to attempt it, we first need to fully understand how this tangle came to be. This is why Ricchi e poveri. Storia della diseguaglianza (The rich and the poor. A history of inequality), by Pierluigi Ciocca, makes for a very useful read: it’s an honest account of the perpetual conflict between those two human conditions, written with the expertise of an economist and the inquisitiveness of an anthropologist, and spanning from the Palaeolithic to the Sumerian periods, from the Etruscan to the ancient Roman eras, up to the modern and contemporary ages. This work – it should be emphasised – is not a mere history booklet written from an economist’s perspective, but a very comprehensive and significant book that many would find beneficial.

Ciocca – adopting a plain and simple, yet exact, language – first outlines the concepts of wealth and poverty, then explores the idea that wealth/poverty is the “dyad that always affected, and continues to affect, human history”. Thus, he goes on to investigate some periods of human history according to the degree of poverty and wealth that typified them. Subsequently, Ciocca delves into the conditions of pre-industrial Europe, which gradually led to the Middle Ages, to the Enlightenment, to the Industrial Revolution, to the 19^th century and, ultimately, to our present times. And finally, he examines the “reasons for equity” and which concrete actions we could take in order to achieve equity.

Ciocca’s book is a real pleasure to read, and also to re-read – a kind of guide to better understand one of the issues (the main issue, perhaps) that, more than any other, could shape the future of our current economic and social assets.

Ricchi e poveri. Storia della diseguaglianza (The rich and the poor. A history of inequality)

Pierluigi Ciocca

Einaudi, 2021

“No one can go back and start anew, but everyone can go on and choose the ending.” Confiding in the wisdom of Karl Barth, 20th-century Swiss theologian with a keen, critical mind, can help us find possible paths of behaviour within a “risk society” (Ulrich Beck) that is magnifying this growing feeling of uncertainty and fragility, a feeling that is unceasingly harming the human condition. Environmental crises, the pandemic, pernicious cybercrime, racial abuse, as well as economic tension related to energy and raw materials, microchips, employment and prices are exacerbating the many, already outstanding issues, deepening our sense of insecurity, feeding the individual and shared anxiety we feel about an uncertain future.

This is Barth’s point. But how do we choose the ending? What are the choices? And how can we drive responsible reforms in times of extreme crisis and transformation?

First of all, let’s have a look at the state of play. Extreme globalisation has its own limits, and this has been obvious for quite some time now (“Left Behind” was the title of an issue of The Economist from October 2017 – four years ago – a title that aptly introduced a well-documented investigation into people and places that were being “hurt by globalisation”, painfully hit by growing inequalities and greedy international profiteering). And the unrestrained development of new digital technologies has swept away traditional frameworks of production, consumption, income distribution. Civic life, environment, markets have all been deeply affected by this. And political equilibrium, especially in the most sensible liberal democracies, is being disrupted by growing social unrest.

Which risks are we up against? Over these controversial months, the media have been outlining a few of them, among the many possible ones: the COVID-19 pandemic is still going, though subdued by the widespread use of vaccines and therapies that are finally proving effective; choices that pollute air and water resulting in environmental disasters; and the proliferation of cybercrime, exposing the fragility and vulnerability of networks which concern several aspects of our daily life, such as economy, transport, communications.

Here it is, the “risk society”, rife with gaps and inequalities – in gender, age, religion, race, culture – that are additionally aggravated by growing intolerance.

The new dimensions of what The Economist terms the “shortage economy” (we mentioned it in our blog post from two weeks ago) only make the situation bleaker: an economy shaped by the scarcity of energy resources (followed by a surge in the price of oil and gas), raw materials, and components (microchips) that are essential to most industry and services sectors. Moreover, as radical changes are affecting the manufacturing industry, we also see issues with qualified workers and cargo ships (as witnessed by overcrowded ports in the Pacific, where enormous container vessels have been at anchor off the Port of Los Angeles, unable to load or unload cargo – and let’s not forget about the blockage of Suez Canal, last July).

“This eternal present keeps us from thinking about the future”, remarked sociologist Giuseppe De Rita (Corriere della Sera, 23 October), examining with a critical eye our inclination to withdraw and hide behind fences made of fear, individual and familist interests, and self-serving localist and nationalist attitudes.

Yet, it’s precisely the crisis caused by the pandemic and the recession that’s showing us how imperative it is to leave behind narrow-minded selfishness and, instead, choose to make a reasonable bid towards a better future.

International collaboration between scientists, public and private research centres, companies and, of course, governments, succeeded in developing vaccines, and on a very short notice, too – the result of years of basic biological, pharmaceutical and genome research. And it’s clear that we need to continue along this path: health is a fundamental public good, and synergy between public institutions and private companies can certainly be extremely beneficial.

Indeed, countries, governments and monetary authorities that have chosen to set aside a more orthodox ideology centred on austerity and, instead, have promoted public spending in order to tackle the fall of incomes and investments in development, have succeeded in jump-starting a new economic season. The EU Recovery Plan, focused on the green and digital economies and particularly aimed at the next generation, has been one of the best moves in this direction – instigated, moreover, by a generous, forward-thinking Europe that is committed to, and confident in, the implementation of sustainable development projects. In Italy, the Draghi government has been a key player in this.

Here it is, the path to follow. Marked by far-reaching and sensible reforms, by a will to rebuild with confidence, thanks to competent and authoritative governance mindful of the general good.

Choosing the ending, then, as Barth said. Choosing it while fully aware of our fragility and yet without giving in to fear, irrational feelings, magical thinking, corporate self-interest or closed communities bent on exclusion and coveting any kind of advantage, no matter if big or small. And assuming responsibility for all the projects and costs a better future may entail. “I care” was the motto favoured by eminent figures whose positive impact we still feel, like Italian educator Don Milani, for examples, or former US president Obama. “I care” – that is, I’m concerned, I accept responsibility, I take care of the people I’m sympathetic with (from the Greek, sun and pathos, to deal with strain, with sorrow, together), of those I feel empathy for. In the spirit of community. A good motto indeed.

“Reading generates independence” reads a message on a beam in one of the Turin International Book Fair’s pavilions, swarming with almost as many people as in the good old times, a cheery crowd of readers – especially girls and boys – patiently queuing before colourful rooms where they can meet the authors, or busy browsing book after book at one of the 715 stands, and exhibitors who can only feel happy at the sight of such a curious, merry mass of people filled with love for life and knowledge.

In our difficult and controversial times, saturated with fake news and information manipulated for all but cultural and democratic ends, the new challenges posed by an irritating background noise full of loud stories soon to be flooded by more loud stories, being smart means being responsible, trying to understand, listen and choose better, applying some critical thinking. Reading, then. Reading for the “simple pleasure of it”. In order to play a conscious role during this era of so-called “knowledge economy” distinguished by the extraordinary prevalence of digital culture and artificial intelligence (where algorithms require a deep understanding of the aims and consequences they might have, as well as technical knowledge – a job for engineers-cum-philosophers who possess a certain moral sensibility). Reading, in order to form one’s own individual opinion without falling into a pit full of curses, hateful shouting, racist and prejudiced slurs.

This, then, is the role that books play – books that defy the passing of time and trends, and the shabby polemics spread on social media and through blaring TV programmes.

“Not all our books will perish”, wistfully wished the emperor Hadrian in his Memoirs, which have been reassembled and narrated by Marguerite Yourcenar. The same Hadrian who said, “Founding libraries is like building public barns, piling up stock to tackle a winter of the spirit that, as several clues reveal, I fear will soon be here.”

Ours is a season full of complexities, and the arrival of an alarming “winter of the spirit” shows itself under many guises, with violence, sovereignism and racism besmirching what democracy, responsible and critical freedom, and a shared feeling of well-being have achieved. Yet, at the same time, this is also a season whereby public awareness – and especially the younger generations – centres on quality of life, environmental and social sustainability, the circular economy, solidarity and inclusion. Good books, the establishment of reading – i.e. thinking – habits, lead to turning points. Umberto Eco’s words come to mind, describing books as indispensable and perfect as a spoon or a bike, of which we can no longer do without.

Are Italian people finally getting the message? Are they learning its value at last? The Turin International Book Fair highlighted some interesting data. During the first nine months of 2021, turnover from book sales (both fiction and non-fiction) rose by 29% as compared to the same period last year, and by 16% as compared to 2019 (according to research undertaken by the Italian Publishers Association, in collaboration with Nielsen). The number of copies sold also increased, by 31% in 2020 and by 18% in 2019. In this light, we could say that the COVID-19 pandemic has had a positive impact: stuck at home, or, in any case, with a restricted choice of leisure activities (no theatres, concerts, cinema, sports), we turned our attention to books. Moreover, the decision to consider bookshops as essential shops, and keep them open, had a positive impact.

The number of Italian readers, however, has decreased: it now stands at 56%, as compared to 65% in 2019 and 59% in 2020. The figures, then, show an increase in “hard-core readers” (those who read at least ten books per year) or, at least, of people who appreciate a book from time to time.

The discrepancy is conspicuous: Italian people buy more books, yet just about one person out of two doesn’t read at all (one out of three before the pandemic). In the South of Italy and amongst the younger generation (between 15 to 17 years old) the situation gets worse, with numbers increasingly dwindling amongst those in possession of lower academic qualifications.

“We are facing a national emergency, even if the world of books is in good shape,” summarises Ricardo Franco Levi, president of the Italian Publishers Association.

Hence, we need to insist on reading policies, keep on supporting bookshops (especially the independent ones, very active during lockdown, providing valuable reading suggestions to those readers in need of some guidance), work hard to strengthen libraries, both public and private ones.

At the Turin International Book Fair, Patrizio Bianchi, minister of Public Education, declared a commitment to rebuild and consolidate the existing network of school libraries. Moreover, the corporate world is showing a growing interest in the propagation of company libraries, whose number was, up to now, limited to only a few cases (some popular ones, as readers of this blog will know, include the Pirelli libraries at the foundation’s headquarters in Milano Bicocca and at its factories in Settimo Torinese and Bollate – indeed, they were inaugurated in this period, mid-October, five years ago).

But we need to involve the younger generation, in order to build the readership of the future. As an example, the 18app has been a success: an app that gives 18-year-olds €500 to be spent in culturally enriching goods and activities – many used it to purchase books, including comic books. Initiatives aimed at fostering reading, such as those introduced by the most sensible teachers during the first years of elementary school, also have a significant impact: the large turnout at the Book Fair bears witness to this.

Literary awards also provide some incentive: the “Campiello Junior” initiative, for instance, recently launched by the Italian literary prize Premio Campiello with the Pirelli Foundation, a prize dedicated to fiction and poetry authors who write for young readers aged 10 to 14 years. A step in the right direction, as it nurtures “the pleasure of reading” while also spreading awareness on the educational role that good books can play in one’s individual – and later on, professional – growth.

“Having a well-stocked book shelf at home gives teenagers an advantage in life. Today, children who have at least eighty books at home show above-average linguistic, mathematical and technological skills.” This had already been suggested, three years ago, by a study published in the Social Science Research journal and involving 160,000 adults from 31 nationalities, whose data was collected as part of the OECD’s International Assessment of Adult Competencies. A perspective that’s becoming increasing topical indeed.

A thesis discussed at the University of Padua takes stock of this new feature of corporate management.

Operating as an “agile organisation” it’s the most recent goal that companies set themselves as part of their aim to move towards increasingly effective models. A goal that might seem easy to achieve but that in reality entails several issues that need to be addressed. These are the themes around which Camilla Ruzza’s work revolves, a thesis discussed at the M. Fanno Department of Economics and Business Studies at the University of Padua.

More in particular, Nuovi paradigmi organizzativi: le organizzazioni agili (New organisational paradigms: agile organisations) discusses one of the most important aspects inherent to the “agile organisation” model: its application within companies that are already operational, and as such shaped according to an already existing organisational layout. Hence, Ruzza analyses the impact that two intrinsically different production cultures might have; as she explains in the introduction, “Thanks to new technologies, agile organisations succeed in transforming ways of working, helping people to collaborate, to access information more speedily and to make smarter decisions. The main point is that technological evolution has inspired new organisational approaches, and thus expanded our skills and broadened our horizons; allowing for the evolution of management practices (…).” The issue, as mentioned above, arises when one attempts to “shift from a traditional to an agile organisation,” as “building an organisation based on agile principles is by no means quick and simple, especially with regards to older companies, where expectations and habits are entrenched; often, younger companies experience fewer difficulties.”

Camilla Ruzza first summarises the concept of “agility as a management practice” (also comparing it with traditional types of management), then goes on to explore the positive aspects of an “agile organisation”, and finally discusses the obstacles and difficulties that needs addressing when attempting to change a corporate culture, steering it towards a new and different direction.

In her conclusion, Camilla Ruzza writes that, “The introduction of new roles and operational models always entails the risk that the company’s relevant stakeholders might have to leave their comfort zones and thus not feel at ease with the way they work. A fear of not being able to cope with such difficulties may lead to an attitude of resistance to change, and this kind of resistance demands some caution in the way it is managed.” Indeed – this applies to various scenarios, not only to the introduction of an “agile organisation” model.

Nuovi paradigmi organizzativi: le organizzazioni agili (New organisational paradigms: agile organisations)

Camilla Ruzza

Thesis, University of Padua, M. Fanno Department of Economics and Business Studies Master’s in Economics programme, 2021

From “imperial city” to “working-class city”, to today’s “laboratory city”. More than any other Italian city, Turin has been through some momentous historical periods and socio-economic changes that made it into a fascinating vantage point from which to observe current political, productive, cultural and social dynamics. The capital of the Kingdom of Italy, at the centre of the economic boom and destination for immigration from the South; a bystander observing the rise of working-class neighbourhoods and large-scale industry; a stage for protests; the promoter of post-industrial regeneration.

And today? What future lurks in the shadows of Turin’s Mole Antonelliana building? Social innovation experiments, start-ups, automotive and aerospace industries?

Andrea Zaghi has gathered 15 accounts and created a dialogue – a dialogue between people working in a corporate environment and people engaged in cultural activities, focused on solidarity, the younger generation, education and training, research, environment, infrastructures, and much more.

Torino, città futura (Turin, future city) – edited by Il Mulino with support from the Compagnia di San Paolo Foundation and the Compagnia di San Paolo School Foundation – outlines, on the one hand, a Turin that no longer exists and, on the other, a Turin that has yet to be. What we find in the middle is the city of today: no longer industrial, no longer imperial, no longer boisterous or “in flux”.

Some of those interviewed remember, with some nostalgia, Turin’s past cultural, artistic and manufacturing zeal. Others contend that the 2006 Winter Olympics marked a turning point, after which the city lost its bearings, providing fertile ground for the propagation of dichotomies between centre and outskirts, wealth and poverty, marginalisation and exclusivity, factory workers and the intelligentsia, the determination to become relevant again and a lack of investment in young talents. These are polarisations described by the people interviewed, and from which a widespread feeling of disillusion arises.

Yet, Zaghi’s work also portrays a city that’s lively and resilient, made of countless different stories, faces and people. Young people, outskirt communities, secular and religious associations are revitalising and rousing the region from the bottom up, starting with the green economy, culture, digitalisation, re-urbanisation and infrastructures. The true wealth we need to be hoarding is human capital: reclaimed from the edges of town, from marginalised areas; exposed through training schemes and networking; detected through “feelers put out there on the streets”, smart enough to detect and reawaken creativity, daring to think outside the box and open up to others. As Francesco Profumo highlights in his foreword, Zaghi’s work “encompasses a series of impressions and indications that, if listened to and built upon, could really give this city a future that will be different from today – that will be better than today.”

Torino, città futura

Andrea Zaghi

Edizioni Il Mulino, 2021

Research undertaken by the Sapienza University of Rome highlights the strong bonds between SMEs and the ability to revamp production methods and strategies.

Corporate innovation, in terms of corporate dimensions, often brings to mind small or medium production organisations, almost as if only SMEs could engender the right environment to nurture creativity, research and innovation – a notion to be taken with a big pinch of salt, of course, but nonetheless based on facts. Through their recently published contribution in the journal Rivista Trimestrale di Scienza dell’amministrazione. Studi di teorie e ricerca sociale (Quarterly Review of Administration Science. Theoretical studies and social research), Renato Fontana, Ernesto Dario Calò and Milena Cassella (from the Sapienza University of Rome) have tried to better come to grip with this topic, focusing on the new versions of SMEs: start-up companies.

Indeed, “Ripartire dall’innovazione: PMI e start-up in Italia. Quali sono, quanto contano, come cambiano” (“Restarting from innovation: SMEs and start-ups in Italy. Which ones are they, how important are they, how do they change”) is a piece of research that aims to explore the extent and meaning of small and medium enterprises in Italy, especially in their most recent form as innovation start-ups, paying particular attention to their regional distribution.

The investigation starts by providing a good overview of the history of Italian SMEs and then examines more in depth the relationships the former have with innovative start-ups within the Italian entrepreneurial fabric. It subsequently outlines their characteristics, focusing especially on their ties with the territory, the “quality” of their human capital and the level of their know-how. All of this is then looked at in connection with the new context that arose after the COVID-19 pandemic. The authors explain that, in a hypothetical post-pandemic scenario, the solutions for a restart could be found in the long and important history of SMEs, a history that, more than any other, intersects with the need for organisational and systemic innovation demanded by the digital transformation, as well as with a growing necessity for resilience and flexibility. In other words, going beyond issues of capital availability, the innovation strength of SMEs lies in their abilities to bring together organisation and resilience, renovation and flexibility: basically, SMEs represent the tangible form of a corporate culture that might well end up becoming one of the most significant assets in the Italian industrial system.

Ripartire dall’innovazione: PMI e start-up in Italia Quali sono, quanto contano, come cambiano (“Restarting from innovation: SMEs and start-ups in Italy. Which ones are they, how important are they, how do they change”)

Renato Fontana, Ernesto Dario Calò, Milena Cassella (Sapienza University of Rome)

Rivista Trimestrale di Scienza dell’amministrazione. Studi di teorie e ricerca sociale (Quarterly Review of Administration Science. Theoretical studies and social research), 3/2021

A book written in collaboration by authors from industry and academia takes a snapshot of the know-how present in production organisations and describes its essential characteristics

Learning how to learn, and doing so “in agile fashion” – that is, with flexibility, resilience, ability to adapt. Advice that is already frequently found in projects dedicated to corporate relaunch. Advice that is commendable in theory, but rather complex to put into practice. This is why reading – and applying – Learning Agility 4.0. Eco sistemi e trasformazione culturale (Learning Agility 4.0. Ecosystems and cultural transformation), comes in useful; a collaborative work that explores the whole wide range of topics concerning also corporate transformation, a phenomenon that, as the book’s sub-title clearly highlights, actually entails a cultural transformation.

The authors include Donatella Pinto (Consultancy & Education Business Leader of Comau), Giuseppe Scaratti (Visiting professor at the Università Cattolica of Milan and full professor at the University of Bergamo), Ezio Fregnan (Comau Academy and Education Business director).

The aim of this research, notable for being a collaborative outcome from industry and academia, is to describe the transformations that are characterising the “work culture” of our current society, identifying the factors that, in future, will steer the search for new professional roles and the development of innovative training projects. What makes this work different is the source of its data, which originates from Comau’s professional network, as well as its Academy’s educational activities and academic research.

According to this study, seven skills are essential in order to become workers and citizens of the future, equipped to face the many changes that are affecting our society. Each skill focuses on the centrality of human agency within a context that is increasingly influenced by the use of modern technologies. These essential skills include creativity, agile thought, knowing how to work as part of a team, with passion and in touch with technological innovation, applying interdisciplinary knowledge that blends both so-called hard and soft skills.

Hence, reading Learning Agility 4.0., can benefit many of us and especially anyone involved with a professional and production environment in constant evolution demanding a response that does not solely rely on pure technical knowledge.

Learning Agility 4.0. Ecosistemi e trasformazione culturale (Learning Agility 4.0. Ecosystems and cultural transformation)

Various authors.

curated by Comau with the Università Cattolica of Milan

Pearson, 2021

The latest issue of The Economist is entitled “The shortage economy” and tells how a new season of shortages in raw materials and semi-finished products is threatening global wealth. After the great financial crisis of 2008, a long period of austerity began, with limited public expenses and restrained investments. Then, the COVID-19 pandemic radically changed the situation, leading to a strong increase in public expense, both in terms of support and investments, in order to tackle the disease, strengthen the healthcare system, find, test, produce and distribute vaccines, and respond to the social crisis affecting those who lost their job and income due to lockdowns that were indispensable for the containment of the Coronavirus contagion.

The pandemic has also acted as an extraordinary accelerator for several economic and social processes: it has led global public opinions to focus on questions about health and quality of life, it has revived themes of sustainability and circular and civic economies, it has dictated an international public agenda centred on the topics of climate, environment and the safeguard of values that affect our way of living, producing and consuming.

It has brought to prominence the necessity for a “paradigm shift”, whereby the obsession for quantitative economic growth (ruled by the GDP, the index that measures produced wealth) transferred to the assumption of responsibility for a development emphasising quality, calculated according to the “Better Life Index” or, to use an Italian index measure, the BES (Benessere equo e sostenibile), which appraises “equitable and sustainable well-being” (as mentioned in last week’s blog post).

The pandemic is far from over, and it’s still painfully and severely hitting geographical areas and nations where the vaccine is not yet widespread (or where the irresponsible resistance of anti-vax protesters predominates). Yet, by all means, especially in Europe and in other highly industrialised countries, the economy has restarted. But…

Here’s a new threat, identified by a key weekly publication that is considered an authority in international financial sectors. The “shortage economy”, as The Economist explains, is the result of two profound driving forces. First of all, the political choices pertaining decarbonisation, which have accelerated the shift from coal to renewable energies, with a subsequent surge in gas price and, more in general, in all energy prices. The manufacturing industry and part of the consumer industry have been heavily affected by this.

A shift to renewable, non-polluting energies is a vital and urgent one, of course – but it needs to be managed through smart policies, so as not to overburden it with heavy economic and social costs (as exemplified by issues related to electric cars, such as their reliance on particularly strategic raw materials and the disposal of batteries).

The second reason for a “shortage economy” includes the impact of protectionist policies that are spreading worldwide, and that are exacerbating the conflict between America and China, as well as all the consequences on international trade this entails. The general economic climate is overshadowed by the possibility of a growth in inflation caused by these two factors. Some sectors, continues The Economist, fear a return of stagflation (inflation combined with a low economic growth), as it happened in the 1970s, though we should keep in mind that that decade does not have much relevant bearing on our situation.

Nonetheless, essential semi-finished products are scarce on the market, starting with microchips, a fact that is impacting several production industries, from automotive to aeronautics, as well as many more other sectors.

The post-pandemic restart has significantly suffered from this. The financial markets are shuddering. The optimism we felt for growth is dwindling.

Hence, this is the state of affairs we need to deal with when having serious discussions on economic policies and corporate prospects.

One thing is for certain: the era of long supply chains is coming to an end. Long supply chains are too fragile, too vulnerable to the rifts caused by great traumatic events (pandemics, changes in climate, and crises related to cybersecurity, too). Of course, the various world economies are still linked, although even those supply chains are in need of a radical change and many manufacturers of semi-finished products need to be brought closer to final production facilities, both in terms of goods and services.

Europe could be the right space to achieve this – it could avoid the development of small national protectionism and strengthen the role of the EU as a great economic player. Europe could introduce common industrial, fiscal, research, education and – why not? – defence policies (with all that this entails). Europe, thanks to its energy and industrial autonomy, could become a key economic player in the big “three-way match”, together with America and China (as per the title of a very interesting book published by Il Mulino and written by Paolo Guerrieri, professor at the Paris School of International Affairs, Sciences-Po in Paris and at the University of San Diego, California).

Naturally, globalisation would not disappear, it would remain prominent but no longer be absolute. A new balance, markets, production chains and consumer habits could be established. Hence, the EU, with its financial dynamism and blend of market economy and welfare systems, could actually become the paradigm shift affecting the rest of the world and a strong proponent for sensible dialogue and debate, and thus slow down this “unhappy decline”, the advent of a shortage economy.