Giorgetti: ‘An alliance between the state and business for growth’

Analysing the economic landscape of a single country is always complex, as it must take into account not only short-term economic trends but also the structural characteristics of the country itself and the international context. As we know, trade is becoming increasingly fragmented and competition between economic systems is intensifying. Technology has changed, with increasingly significant transformations that also directly affect production processes. Furthermore, the effects of demographic shifts in advanced economies are becoming more apparent, with consequences for the labour market, productivity and social spending.

Demographics are certainly one of the factors that have the greatest impact in the medium and long term. The decline in birth rates and the ageing of the population – which now affect most advanced economies – are accompanied in our country by specific national factors that highlight all the critical issues arising from the gradual reduction in the working-age population. For our society – and indeed for Western civilisation as a whole – the issue of the so-called ‘demographic winter’ poses a serious threat to the sustainability of the welfare state. Without a significant reversal of this trend, our system, as we know and experience it today, faces serious challenges to its sustainability.

On the other hand, we are also seeing encouraging signs in other areas. Employment figures in recent years have been positive, but the challenge of productivity remains; this is also linked to the sectoral composition of the Italian economy, as well as to human and technological capital. The decline in the working-age population and the challenges posed by new technologies make it increasingly important for policies to be able to attract and develop skills: skills whose quality and relevance must be nurtured throughout the entire educational and career pathway.
The Report emphasises precisely this continuity. An education system must produce skills; research must be able to transform knowledge into innovation; and this innovation must reach businesses and translate into new products, new processes and skilled employment.

The issue of productivity is not a new one for the Italian economy. Alongside the careful identification of instruments – including fiscal measures – designed to steer production towards these sectors and to adapt production processes, a culture focused on transformation and investment must take root amongst economic operators. In this context, the measures introduced by the Government in recent years should be seen as complementary to those financed through equity capital. It is here that the business sector plays a central role. The Italian economy has a productive structure in which small and medium-sized enterprises, mostly family-run, play a very significant role. These enterprises form an essential part of the country’s production chains and, in many sectors, are now called upon to undertake several steps simultaneously: to invest, to innovate, to adopt new technologies and, where possible, to expand in size.
The Report highlights precisely this point: productivity is also linked to the size structure of enterprises and their capacity to invest in research and innovation. Investment and productivity cannot be considered in isolation from the growth in the size of enterprises and their financial structure.
Credit also plays an important role in this process. For a significant part of the Italian manufacturing sector, the relationship with the banking system represents a key channel for financing investment and business activity.
The issue therefore also concerns the conditions under which a firm can finance a new plant, a new technology, a research project or a growth strategy. The ability to mobilise resources for productive investment thus becomes one of the conditions for sustaining productivity and growth.

In an economic climate as complex and uncertain as the current one, it is increasingly important that the emergence of fully-fledged forms of autonomy at the various levels of government is accompanied by ever more structured and effective coordination between the policies implemented by those same levels. Such coordination is also becoming increasingly necessary in relation to the European institutions, given the greater degree of conditionality attached to the disbursement of funds by the European Union.