Terminal decline or lull before a comeback? That was the question on our minds as Gianfranco Chicco, Marco Massarotto, Luca Conti and I prepared for our panel about Italy on March 17 at the 2011 SXSW Technology Summit (photo courtesy of Paolo Privitera). And I like to think it’s the latter.
Our organizers asked us to address questions ranging from “Who are the leading mobile carriers / companies in your country?” and “Is there enough talent for high-tech work?” to “What companies / individuals are leaders in terms of overall creative technology?” and “What are the best resources / blogs / websites for people to learn more about new media in your country?”
I worked on the first chapter, summarizing in a few slides the key data points about the country’s human capital and technology infrastructure, and I’d like to share my speaking notes with you. (You can see my slides, together the chapters about technology innovators (Marco) and social/new media trends (Luca), at this link or embedded below.) Here’s my section of the talk – let me know where you agree and where you disagree.
- What I will argue today is that you should think of Italy as two countries; not in terms of geopolitics (we are celebrating today 150 years since unification), but in terms of culture, society, economics and technological environment.
- One part of the country – mostly young, mostly urban, mostly in the prosperous North (but not only: you will see later some examples of innovation leaders from the Center and South of the country) – works and feels like Bavaria or Sweden, from Internet penetration to women’s participation in the workforce. The rest, though, is very different.
- Our education system is an active contributor to this inequality: for secondary school students, the gap in standardized OECD PISA test scores between the North-East and the South of Italy is larger than the gap between Finland and Spain. As Roger Abravanel documented in his Meritocrazia, schools in the South of Italy perform no better than the average school in Uruguay or Thailand.
- What about university education? Well, it was pretty much invented in Italy (the University of Bologna traces its roots back to 1088 A.D.) We could have performed some more upkeep, though. For many centuries, universities were by definition elite institutions; a serious push for a broader diffusion of upper education only started for good with the 1968 student movement. Yet, over 40 years later, according to OECD statistics, only about 10% of Italians aged 55-64 have obtained a university degree, and only about 20% of of Italians aged 25-34. A lot more people start university studies, but the drop-out rate is very high. Furthermore, the return on investment for those who complete a university education is over twice as high for young men than for young women. So do we, as a nation, have the skills to compete, almost ten centuries after the first place of higher learning was founded?
- I argue that spikes count for more than the general level of education; that deviation from the mean is more important than the mean. So the question is not whether everybody gets a degree, but whether the system is able to take in talented students and churn out a number of exceptionally creative people who then go on to change the world. And I believe it does: take three of our centers of excellence – the Polytechnics of Milan and Turin, and Bocconi University in Milan – and you’ll see not only that their graduates on average find jobs quickly and go on doing well for themselves, but also that many of their alumni have left a mark on the world as architects, designers, technologists, economists and entrepreneurs. It may be a stereotype that Italy stands for creativity, but it’s hard to challenge it.
- Having talked about human capital, what does the infrastructure look like? Well, again – Italy is at least two countries. One country has broadband at home, banks online, shops online, and prints out its own boarding pass at home before going to the airport. The other one is stuck in the 20th century.
- That second country (older, less educated, less urban…) is still big enough that the most successful technology of the 20th century, television, remains the leading media technology in the country as a whole. More than half of the advertising money spent in the country goes to one media: television. TV grew through the recession, and it’s still growing. Yes, the Internet is growing too: but we’re still very far from being a market like the UK, where the Internet left TV behind two years ago. TV is the winner and we’re in a market where the winner takes all: not just the advertising money, but the nation’s collective attention.
- Fortunately, we have a vibrant telecommunication market, especially in mobile. Mobile is important not just because it’s a bigger market than fixed line, but because in the absence of a national broadband policy mobile may well turn out to be the key to reuniting that divided country I talked about. We’re already among the leading European countries in terms of mobile broadband penetration through devices such as Internet keys and dongles. The operator I work for, Vodafone, has committed to bringing mobile broadband over three years to 1,000 towns in Italy that today have no broadband access at all, fixed or mobile.
- Still, the recent recession has made it a tough ride. In 2009, we lost 5% of our GDP, and we’re merely inching back to growth, not sprinting. The investment environment took a hit. The ICT sector was hit very hard; telecommunication spend did not collapse as dramatically, but is now likely to be in its fourth consecutive year of slow contraction. As consumers have adopted recessionary mindsets, businesses have had to learn to cope.
- So what are the drivers for technology and innovation, looking ahead? For Italy, the tech lobby Assinform identifies the usual suspects: cloud computing, eGovernment, mobile broadband, tablets, SMEs. But don’t underestimate the role of Europe. The European Union as a forum, in spite of the recent debt crisis, is still a very active bureaucracy working for competition within the EU, for consumers and for citizens. It exercises both legislative power and moral suasion, such as in standardization initiatives – essentially banging people’s heads together until they agree to make sure that whatever they’re doing is interoperable with what their other fellow Europeans are doing. (GSM, as you will recall, was started in the 1980s by a bunch of postal and telecommunication bureaucrats. Who would have thought?)
- Back to Italy: are we in tune with the Digital Agenda for Europe? No, I would not say we are in tune. Our government has been preoccupied with other political priorities, such as fiscal devolution and reform of the criminal justice system. Ask any of our political leaders, government or opposition, whether a digital agenda for Italy is among their top ten priorities, and my guess is that hardly any of them will even have a clue of what you’re talking about. (Remember: they are elected, overwhelmingly, by people who watch TV.) So lobbying has started, most recently with Agenda Digitale – a plea by 100 Italian technology and media figures for the political establishment to define what we’re going to do about the digital divide -, and must continue.
- Having said all that, should you lose hope in the country? No, no, no. We do have enablers that we didn’t have ten or fifteen years ago: VCs with proven track records, incubators and seed funds started by successful entrepreneurs and managers, angel investors and angel groups. (I am a member of Italian Angels for Growth). We do have skills, creativity and talent – as shown by the many achievements of Italians around the world. We have bureaucracy, yes, and we are badly governed: but that won’t last much longer. We are proud of being Italian, and we want to fix our country. Each of us here today is doing their small or big part.