Investing in human capital training to ensure stability

-last in fertility rate: 1.18 children per woman on average (against the EU average of 1.38);

-last in birth rate: 6.4 births per thousand inhabitants (compared to 8.2 in the eu);

-and is at an all-time low of 370,000 babies.

The Italian demographic growth of the last twenty years is already exclusively supported by the foreign population. suffice it to say that the Italian population under the age of 5 has decreased by 37% since 1990, while foreigners have increased from 356 thousand to 5.4 million, 15 times more. This aspect is particularly relevant when we are discussing the skills needed for the future and all related issues, including the phenomenon of educational poverty. this concept implies the lack of access to learning opportunities and the development of the skills young people need to participate fully in society and reach their potential.

It is no coincidence that President Enrico Letta's report 'much more than a market' highlights the fact that, in addition to the four freedoms on which the eu has historically been based (free movement of people, goods, services and capital), there is now a need to consider new patterns that better reflect the transformations that are redefining the european economy and society. We are remarkably aligned with the report, which envisages as a possible answer the addition of a 'fifth freedom': human capital, which encompasses several elements, including research, innovation, data, skills, knowledge and education. Quoting the report, "The integration of the fifth freedom [...] would transform existing dispersed knowledge, fragmentation and inequalities into unified opportunities for growth, innovation and inclusion".

Starting from this reflection, I would like to bring to your attention the current snapshot of human capital in Italy, sharing some of the evidence elaborated in the various Teha researches that will be explored in depth during the three days of work here in Cernobbio. The main evidence from Teha's in-depth studies is the need for a sudden and structural change in the education system, with particular reference to orientation paths. in addition, Teha's research highlights the importance of instilling greater security and hope in young people and investing in human capital to increase the attractiveness of the country.

Coming to the picture of skills, Italy is 8th in Europe for school drop-outs: 9.8% of young people aged between 18 and 24 have in fact abandoned their studies before the end of the 5th grade. that's a good 408 thousand! Early school leaving is, moreover, strongly influenced by the nationality of origin: 15% of young Europeans and 27.4% of non-Europeans studying in Italy do not obtain a high school diploma. In reflecting on these data, I would like to quote the Declaration of the President of the Republic Sergio Mattarella on the occasion of the world day against the exploitation of child labour: "Dropping out of school opens the way to educational poverty, social marginalisation and, in the most serious cases, to the involvement of minors in illegal activities or under the control of criminal circles."

Continuing the analysis, with only 31.6% of young graduates, Italy ranks third last in Europe, with a gap of 12.5 percentage points compared to the EU average. The comparison with the best performing European countries is impressive: in Ireland graduates make up 65.2% of young people, while in France they make up 53.4%!!! Again, it is the component of young foreigners that weighs negatively. In Italy, only 13.4% have a degree, compared to the European average of 37.9%.

Moreover, Italy ranks 21st in the European Union for participation in lifelong learning activities: only 35.7 per cent of workers take part in training courses, compared to the European average of 46.6 per cent. Moreover, Italy 'loses' more than 37,000 graduates every year, who emigrate in search of better working conditions, at an annual cost to the country estimated by Teha at EUR 5.1 billion. The truly dramatic figure, however, concerns neets, i.e. young people aged between 15 and 29 'Not in Education, Employment or Training'. In Italy, despite the reduction of about one million over the last decade, there are still 1.4 million young Neets. And our country is still the second worst in the EU in terms of incidence, with a rate of 15.2 per cent, which is well above both the European average (11 per cent) and the EU 2030 target (9 per cent). Of these, 453,000 are voluntarily inactive and not looking for work: 69 per cent are young women, 46 per cent are concentrated in the South and 42 per cent have low levels of education.

A final aspect to which I would like to bring your attention is the anxiety of our young people. according to a survey conducted by the Italian Youth Agency, 7 out of 10 say they are worried about their entry into the world of work, mainly due to the fear of structural precariousness. approximately 1 in 2 fears finding an underpaid job and/or having an unstable job for a long time.

Unfortunately, the concerns of our young people are well-founded: since 2000, Italy is the only OECD country where average real wages have decreased: In 2023 they were 3.5% lower than in 2000, compared to a 17.8% increase in the OECD average and 27.4% in the United States. In addition to the social dimension of the phenomenon, the economic fallout is also a cause for concern. In fact, the Neet represent an enormous cost for society, estimated by Eurofound (the reference institution for the European Commission and Parliament and the Council of the European Union) at over 114.7 billion euro per year for the European Union, of which 24.5 billion for Italy, equal to 1.23% of Italy's GDP, almost as much as the 2025 financial manoeuvre (28.4 billion euro).

So what are the tools to counter this phenomenon and instil more security and hope in the new generations? Although education is a crucial tool for combating youth unemployment and building tomorrow's human capital, an integrated and coordinated approach at national level, involving several complementary areas, is crucial.

It is necessary to improve the overall efficiency of the education system, also in order to attract young talents from all over the world. orientation paths should be strengthened and form an integral part of training activities, starting from secondary schools. in addition, a unified direction between the various players involved (schools, teachers, families, companies, educational institutions, third sector bodies, regions and government) is indispensable, as well as better monitoring and evaluation of orientation interventions.

A supply chain approach to training should also be promoted, through upskilling and reskilling projects along all value chains and not acting 'every man for himself'. This would help overcome size limits and spread the culture of lifelong learning on a large scale.

I cannot overlook the enormous potential for accelerating knowledge management enabled by artificial intelligence tools, where vision, structured investment in training and greater coordination between institutions, schools and businesses are needed to build skills in line with the changing needs of the labour market.

I would like, in this context, to take up an essential principle that is summarised in the word of the year for 2025 of the Istituto della Enciclopedia Italiana Treccani: respect. Respect means recognising the value of young people and their aspirations, but also the role of teachers, families, businesses and institutions in a common path. Respect is instilling confidence, offering tools, creating fair conditions for all, leaving no one behind. It is the key to transform the diversity of talents and paths into a resource for collective growth. In our work platform dedicated to young people under 30, orpen jam, the 'cry' emerged from the young people. Building opportunities for happiness at work is an opportunity, but also a duty for all business leaders.

Managing Partner and Managing Director The European House - Ambrosetti