OXYGEN n.18 - Industrial pride by Enel Spa

18 12.2012 Science for everyone

The new face of global production

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INDUSTRIAL PRIDE —

editorial board Enrico Alleva (president) Giulio Ballio Roberto Cingolani Paolo Andrea Colombo Fulvio Conti Derrick De Kerckhove Niles Eldredge Paola Girdinio Helga Nowotny Telmo Pievani Francesco Profumo Carlo Rizzuto Robert Stavins Umberto Veronesi

art direction and layout undesign picture editor white illustrations Elena La Rovere undesign

editor in chief Gianluca Comin editorial director Vittorio Bo publishing coordination Pino Buongiorno Luca Di Nardo Giorgio Gianotto Paolo Iammatteo Dina Zanieri managing editor Stefano Milano editing Cecilia Toso editorial team Simone Arcagni Armando Buonaiuto Davide Coero Borga Daniela Mecenate Nicola Nosengo Francesca Pellas Paolo Piacenza Alessandra Viola translations Susanna Bourlot Laura Culver Gail McDowell

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summary

Industrial pride

10 editorial INDUSTRIAL PRIDE

14 scenarios MANUFACTURING: THE ENGINE OF GROWTH

by Fulvio Conti by Giorgio Squinzi

Industry is security because it is manufacturing, creation, unity of spirit and matter, the body and soul of society; a security that is undermined today by the global economic crisis. So for Italy – the second largest manufacturing country in Europe – doing things right is not enough: it must know how to do them better than others. In order to do so, industrial pride must first be restored, valuing work in every role, making space for creativity and initiatives, connecting small businesses through networks and putting the larger ones in a position to meet the new needs and new global technological trends. The key to success is continuous innovation. This issue of Oxygen tells many success stories, at the dawning of what is already being called the “new industrial revolution,” which is going on throughout the whole world and is revitalizing the quality manufacturing of the historically most industrialized countries.

“The more advanced nations have once again put the processing industry at the center of their development strategies. If Italy wants to continue to be an authoritative subject of economic life on a global scale, it can only be through the strength of its industrial system, which is the only area to consider investing in today in order to restart a process of development of the entire national system.”

editorial THE NEW INDUSTRY

opinions DESIGNING THE FUTURE

by Giulio Sapelli

by Davide Canavesio “The sirens singing of a country that must evolve only toward services have become increasingly insistent in these years of crisis. And the prophecies of doom for a manufacturing sector that is no longer competitive and by now on the wane have become more and more frequent. I do not agree with either interpretation. And I say that as a manufacturing entrepreneur.”

Industrial pride —

The new face of global production

«Industry is security because it is manufacturing, creation, unity of spirit and matter, the body and soul of society» 002

in-depth TOMORROW’S PRODUCTION IN SEVEN WORDS

by Dario Di Vico In order to outline a present and future scenario of industry, we must first understand the elements that affect it. To understand the industry, let us start with a few words: restructuring, exports, supply chain, business networks, districts, retail, and trade unions.

26 contexts A MORE MODERN, EUROPEAN, AND COMPETITIVE ITALY

by Corrado Passera “The change in our country has just begun. We have charted a clear path with measures that were able to be taken with the limited resources and the limited time available, and today we already have an Italy that is more modern, more European, and more competitive. Now we need to move forward.”

36 scenarios GLOBAL COMPETITION OF INDUSTRY

by Carlo Marroni

30 interview with alberto quadrio curzio THE VITALITY OF ITALIAN PRODUCTION

by Paolo Piacenza There is still plenty of vitality in Italian industry. Despite the recession and increased competition from the East. Italy is still ranked fifth among the G20 economies for surplus trade of non-food industrial products, after China, Germany, Japan, and South Korea.

«The completion and upgrading of infrastructure networks, not just for the transport of goods and people, but also for energy and telematics, is essential to start the growth»

34 column TWEETS & QUOTES

The major industrialized countries are moving in search of solutions to the crisis; some are slowing down, and others are exploring new territories. Here is an overview of the sectors in which they are concentrated and the global interconnections that affect them.

«China’s prospects in the world are central to the fate of almost all areas of the world, from the United States to Europe, from the Far East to South America»

40 passepartout THE ADDED VALUE OF INDUSTRY

42 scenarios THE FIFTH INDUSTRIAL REVOLUTION

by Peter Marsh An analysis of the impending revolution in the manufacturing sector, an overview of the lessons drawn from past industrial revolutions and those of the present of economic crisis. And some social and economic benefits that a new revolution could achieve.

«The world is on the brink of a new era. This shift in fortunes of the developed and developing world in manufacturing will begin to go into reverse and manufacturing in the rich countries will stage a come-back»

48 data visualization BUSINESS: HOW ATTRACTIVE IS ITALY?

50 in-depth SHOULD WE PRODUCE FEWER “THINGS”?

by Donato Speroni Industries will always be producing. What economists are debating is whether we should really be producing less and, in this case, how to survive, or if instead the world – as some think – is able to grow exponentially, like the memory of certain chips.

52 contexts BUSINESSES THAT THINK IN NETWORKS

by Aldo Bonomi A resource for creating relations of exchange and support among the companies that have to deal with this current time of economic crisis and changes: the network contract as a guiding tool for aggregation and interfirm collaboration.

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«My concept of the entrepreneur has an artistic approach. Let me explain. The craftsman uses his head and hands when making a product. The entrepreneur goes further and adds the heart to the head and hands»

«The network cannot be the only solution to the crisis, but should be an instrument of industrial policy made available to the system for best dealing with an unfavorable period and time «The challenge of changes» we are faced with is to bring the small business and craftsmanship to a finished modernity, and 56 it is a challenge scenarios for the nation. A NEW ECONOMIC RENAISSANCE THAT The growth COMES FROM SMES potential of the sector is likely to by Andrea Di Benedetto and Luca Iaia be perhaps the only chance we About 18% of Italian exports comes from the artisan world. have to restart our 50% of the SMEs. A rebalancing is economy. A new happening in favor of the smaller Renaissance» companies that have been able to protect very vertical slices of the market, a reorganization of the geographic markets for the benefit of the emerging economies, especially Asian ones, that have always lived in admiration of Italy and the quality of our craftsmanship.

60 contexts OUR KNOW-HOW WILL SAVE US: 10 SUCCESS STORIES

66 interview with nerio alessandri A SOUND BUSINESS IN A HEALTHY BODY

by Daniela Mecenate by Pino Buongiorno The hands of Italian craftsmen and their brilliant and imaginative minds work international miracles. And “Made in Italy” products can boast numerous examples of virtuous artisan companies that, with hats, sunglasses, bicycles, and printers, are delivering the message all over the world.

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How to combine entrepreneurial and design skills with a healthy lifestyle and diet, and be able to create a successful company. This is the story of Technogym, a leading company in the field of wellness: not a sport but a way of life. And of business.

70 contexts IKEA: SPACE FOR ITALY Today, you can find at least one Ikea store in 40 countries around the world, and in each of them you can find at least one Italian kitchen. Because today, Italy, after China and Poland, is the third largest supplier of the Swedish giant.

82 in-depth MANUFACTURING 2.0

by Alessandra Viola The professions of workers and manufacturers have definitely entered the 2.0 era. The new “hard work” concerns digital manufacturing, ICT, and related technologies that support innovation, but also robotics and renewables. Oxygen conducted an investigation in these areas, as recounted to us by those who work in them.

92 contexts THE MAKER REVOLUTION

by Simone Arcagni “Creative digital and technology experts, the garage innovators who, with their innovations and new business models, are creating what many do not hesitate to define the third industrial revolution.”

72 interview with edoardo nesi FEAR OF THE FUTURE? IT IS SOMETHING WE CAN NO LONGER AFFORD

by Armando Buonaiuto A writer who has led a textile company for years, and does not experience the factory as an alienating reality, talks about the future and trust. And optimistically describes a country rich with youth and potential.

76 data visualization WORKERS OF THE WORLD, SPECIALIZE!

78 scenarios NEW VALUES FOR A NEW INDUSTRIAL REVOLUTION

by Gianluca Comin In order to overcome the crisis, the decline in the role of industry must be reversed. And to do that, work needs to done on the cultural level as well as on the structural level. In Italy in particular, it is necessary to rebuild industrial pride by focusing on values such as the individual and the environment.

88 opinions START-UP MENTALITY

96 in-depth DO-IT-YOURSELF: 3D PRINTING

by Riccardo Luna by Nicola Nosengo “When faced with change, the multi-national giants stumble and fall.” So in order to keep up with the pace of change, the model to follow is that of the start-ups: because they are the basic unit of the cloud economy, are very adaptable to change, and incredibly effective in doing a single thing.

“A breath of fresh air for industry could come from 3D printers. Technology and design serving the imagination of the makers to create plastic objects. The age of personal fabrication has not really begun yet, but it may never have been so close.”

«We are all a work 100 oxygen versus co2 in progress ... UPON A TIME, Great people, like TWICE THERE WAS great companies, A CHIMNEY SWEEP are constantly evolving. They are never finished 102 and never fully science at the toy store developed» THE HARD WORK THAT DOESN’T SCARE KIDS

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oxygen | 18 — 12.2012

WE’RE CELEBRATING 50 YEARS OF ENERGY AND mILLIONS OF mOmENTS ShARED BETWEEN uS.

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SINCE 1962, OUR ENERGY HAS ALWAYS BEEN ALONGSIDE YOUR OWN. 50.enel.com

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1 Nerio Alessandri — After an education in industrial design, in 1983 (at just 22 years of age) he founded Technogym in Cesena. Today, it is a world leader in products and services for wellness and rehabilitation. He is President of the Wellness Foundation, and since 2004, has been a member of the Board of Directors of Confindustria and Vice President of the Leonardo Committee.

2 Aldo Bonomi — Aldo Bonomi, from Brescia, was born in 1951 and is President and CEO of the Bonomi Group. He is President of RetImpresa (www.retimpresa. it), the agency of Confindustria for corporate networks, Executive Vice President of Bank Cre. Lo.Ve and a member of the Board of Bipop-Carire since 2002.

3 Davide Canavesio — He is the CEO of Saet Group and a leading figure among young Italian entrepreneurs. He was President of the Young Entrepreneurs of Turin from 2010 to 2011 and one of the originators of the first G8 Young Business Summit in Stresa and the G20 Young Entrepreneurs Summit in Toronto.

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4 Gianluca Comin — Director of External Relations at Enel, he is in charge of communications and institutional affairs, nationally and internationally. He is a member of the Board of Civita, of the national board of Confindustria and Unindustria, and in charge of courses in communications at Luiss University. He is the author of 2030 Tempesta perfetta. Come sopravvivere alla grande crisi. (2030 The Perfect Storm. How to survive the Great Crisis).

Contributors 8

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5 Fulvio Conti — Managing Director and General Manager of Enel since May 2005, he is a Director of Barclays plc and AON Corporation. He is Vice President of Eurelectric and Endesa and a member of the advisory board of the National Academy of Santa Cecilia. From 1999 to June 2005, he served as CFO of Enel.

6 Andrea Di Benedetto — The CEO of 3logic MK (a company that deals with digital images), since 2009 he has been President of the Young Entrepreneurs of CNA (a confederation which numbers 350,000 craftsmen and 25,000 small and medium-sized enterprises) and from 2011 of LinkedOpenData Italia. He is a founding member of Wikitalia and Vice President of the Technology Centre of Navacchio.

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7 Dario Di Vico — A trade unionist for UILM of Turin at the turn of the Seventies and Eighties, he has become a well-known Italian journalist writing for the newspapers “Gazzetta del Popolo,” “Il Mondo,” and “Italia Oggi.” He been with “Corriere della Sera” since1989, writing about economics and politics; he was its deputy director from 2004 to 2009.

8 Luca Iaia — An expert in integrated design, logic sharing, business combination, corporate social responsibility, and sustainability, he is a national point of reference and the national coordinator of the National Confederation of Young Entrepreneurs at Crafts and Small and Medium Enterprises (CNA).

9 Riccardo Luna — He was deputy director of “Corriere dello Sport” and the first director of the Italian edition of “Wired.” He has written for “Il Post” and “la Repubblica,” for which he served as editor in chief. He was one of the promoters of the Nobel Peace Prize to the Internet and is President of Wikitalia. As of 2012, he is a member of the Board of Directors of Oxfam Italia.

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Corrado Passera — Minister for Economic Development, Infrastructure and Transport, he held various positions for CIR, was General Manager of Arnoldo Mondadori Editore and CEO of the Italian Postal Service. From 2002 to 2011, he was Managing Director and CEO of Banca Intesa and, after the merger, of Intesa Sanpaolo.

Donato Speroni — An Italian journalist of economics, he has worked for “Corriere della Sera,” “World,” and “New Newspaper.” He currently teaches economics and statistics at the Institute for Education in Journalism in Urbino. He writes for “East” and is co-author of 2030 The Perfect Storm 2030. How to survive the Great Crisis.

Alberto Quadrio Curzio — Professor Emeritus of Economics at the Catholic University of Milan, he is the founder and President of the Scientific Council of CRANEC and a member of the Scientific Council of the Edison and Eni Enrico Mattei foundations. He is the director of the magazine “Economics. Journal of Analytical and Institutional economics” and the author of over 400 publications.

Giorgio Squinzi — Co-founder of Mapei (auxiliary materials for construction and industry), he was President of Federchimica, a Director of the Bank of Italy and is President of CEFIC, the European Chemical Industry Association, with 29,000 member companies. As of 2012, he is President of Confindustria.

Carlo Marroni — He began his career in 1988 as a journalist in finance. He was the first editor of the agency “Il Sole 24 Ore Radiocor” and then its director. He currently writes for “Il Sole 24 Ore” as an expert on international politics and economics, and information on the Vatican.

Peter Marsh — He has degrees in chemistry and journalism, and deals with economics, technology, and the chemical industry. He has written for the “New Scientist” and today is the manufacturing editor of the “Financial Times.” His latest book is The New Industrial Revolution: Consumers, Globalization and the End of Mass Production.

Edoardo Nesi — An Italian author and screenwriter, he also led the family textile business until 2004. He is the author of Escapes from standstill, Ride with the angels, Rebecca, Children of the Stars, The Story of My People and Our Lives without Yesterday. He wrote and directed the movie Escapes from standstill and translated the 1,433 pages of Infinite Jest by David F. Wallace.

Giulio Sapelli — An Italian historian of economics, he has been a researcher and consultant at institutions around the world and has worked in major industrial companies. Since 2002, he has been a member of the World Oil Council and since 2003, part of the International Board of the OECD for the nonprofit sector. He teaches the history of economics at the University of Milan.

illustrations: Elena La Rovere

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editorial

INDUSTRIAL PRIDE by Fulvio Conti

n recent years, simply scanning the the middle class by 2030 (McKinsey Global Inforums and news on the Internet or stitute). It will be precisely these three billion glancing at the headlines is enough emerging citizens who will give a boost to the for a general picture painted in dark colors to global demand for primary consumer goods, appear. The economic crisis, troubled global durable goods, and, consequently, raw mategovernance, overpopulation, lack of energy rials. A revolution that has led to a dramatic and raw materials – water and food – are some increase in connections between people and of the topics that have been endlessly bounced objects: since 2008, there are more technologiaround in public opinion debates in these cal devices connected to the networks around years. Yet behind all this, a different story can the world than there are people, who by 2020 be read between the lines. Limiting ourselves will number 50 billion (Cisco, The internet of to looking at the actual data, we find that, de- things). Ten years later, in 2030, the cars in spite everything, the world continues to pro- circulation worldwide will have doubled comduce wealth: much more than we ever did. pared to the current number, just as the level With the exception of 2009, the World GDP has of nutrition per capita and the size of cities, escontinued to grow, more or less slowly; a loco- pecially for countries in the developing world, motive driven by emerging will grow exponentially. It is countries – China, India, and precisely the big cities that Latin America – which have Innovation is the proper will be the stage to host this replaced the United States change, a phenomenon that means to build at the helm of the world already taking place. Since a near future and the is economy (World Economic 2008, the population living means to address the in cities has exceeded the Outlook, International Monetary Fund). This trend was number of people living in current situation confirmed by the forecasts of the countryside: an unprecthe consumption of primary edented event, which has reenergy, with an increase of about 40% between sulted in a profound and radical social change 2009 and 2035 (World Economic Outlook). and that leads to a continuous urbanization. Contributing to this growth will mainly be non- This extraordinary growth will render the cities OECD countries, where the use of energy, due more and more sophisticated, in need of anto economic development and the improve- swers to complex challenges, from traffic manment of living conditions of the population, agement and air pollution to energy efficiency will lead to a 90% increase in consumption in and access to electricity. The cities themselves 2035. Above all, in China, where in the same become laboratories of innovation. And techyear they will use 70% more energy than the nological innovation is the key to supporting United States, thus climbing to second place this delicate and complex architecture, allowin the world rankings. The unprecedented ing us to combine sustainability, efficiency, and rapid economic development of emerging and quality of life through the interaction of countries, particularly China and India, has led three types of networks: those concerning ento an increase in average pay which is 10 times ergy, information, and the citizens. A real “conhigher than that of the United Kingdom during vergence between bits and atoms,” as defined the first industrial revolution. This growth will by the scientist from MIT, Carlo Ratti (If the enable more than three billion people to join City doesn’t act stupid, “La Stampa,” May 25, 010

2012). Hence, innovation is the proper means Perhaps our country has been classified too to build a near future and the means to address hastily as “low growth,” but there are vibrant the current situation, acting as a driver for a areas, with firms that are growing and export“new industrial revolution.” This revolution is ing. In particular, the manufacturing sector, amplified in the energy sector, especially the where the numbers are encouraging: in Italy, electricity system. In fact, a constant over the in the first half of 2012, one exporter out of two years is the driving role electricity has played increased sales of their products abroad, comfor the social, economic, and industrial devel- pared to the same period in 2011. This is a tanopment of communities. Electricity is actually gible sign that the most dynamic companies the most practical, effective, and efficient way can be the most competitive ones. A dynamism to meet the needs of a world that is increas- that can be extended with the creation of a netingly hungry for energy and that, thanks to new work to spread and circulate brilliant “business technologies, can be produced and distributed ideas,” both Italian and foreign, reactivating in a more comprehensive and economical way the entrepreneurial spirit that has always charto consumers, according to new and innovative acterized our country by pooling youth, enterbusiness models. In the electrical industry, Eu- prise, and innovation. A connective tissue that rope and Italy have a global will lay the foundations for the leadership over the entire creation and development of production chain. Enel has new businesses and promote There are vibrant developed power plants over investments in industrial reareas, with the last ten years with record search and development. For firms that efficiency, renewable energy instance, Enel is doing this plants that are more competithrough its EnelLab Project, are growing tive, and innovative projects which provides promising and exporting such as the first hydrogen start-ups with funding, tools, power plant, the most adand environments suitable for vanced clean coal plant in the world, projects dealing with the global competition. Or providfor the capture and sequestration of CO2, the ing them with practical assistance through initifirst concentrating solar power (CSP) plant in atives that are activated by the universities with Italy, electric mobility, electronic meters, and the Enel Foundation Study Center. We must not smart grids. This commitment will continue let our wealth of expertise and technical knowlin the years to come, because innovation is an edge wither, but rather, we need to enhance it. integral part of our vision of the future. Inno- History teaches us that every industrial revoluvation is not just about big projects, but also tion was driven by new technology, introduced the levers and tools to support the economic by experienced entrepreneurs in their field who recovery of our country. Any technological in- were not afraid to launch into new adventures. novation always starts from a hardware sup- That Italy and Europe have a great history, the port, whether it be a micro-chip, a robot, or a maturity, and the ability to boost the future 3D printer. Therefore, the manufacturing in- and once again become the driving force of dustry has a great opportunity for rebirth if it the economy is a universally recognized fact. will be able to reinvent itself starting from its So let us look forward to the future, beyond the own experience and the solid foundation that crisis, well aware of our capabilities and our can already be counted on, especially in Italy. size, and especially, of being able to innovate. 011

editorial

THE NEW INDUSTRY by Giulio Sapelli

ou hear talk about industry all around ops only for commodity supply chains and techthe world. It is like Rossiniâ&#x20AC;&#x2122;s â&#x20AC;&#x153;slander is nology, but also and especially for the scientific, a breeze,â&#x20AC;? but this time it is not about technological, and production clusters where slander, but a return to the truth. The truth of in- there is a steady decline in the size of the plants dustry and industrial work. The reason for this and companies while the systemic interrelationis both simple and dramatic: the financial crisis ship between them is increasing, creating new that is happening all over the world is much more constellations in the sky of industries. The most frightening than the crisis occurring in the indus- overwhelming thing about this new industry is trial world. The old world and the new one have the reclassification of the models of authority gone through major and repeated low-intensity and power relations. These are increasingly less industrial crises that shook the seas of the econo- important because they alone cannot guarantee my between the two great tidal an efficient management of the waves of 1907 and 1929, until execution of design and prothe third crisis which started in Industry is safety because duction. Let me explain. Propthe late Nineties and in which erty is no longer sufficient by it is manufacturing, we are still immersed. But initself, as it once was, to ensure dustrial crises destroy to recre- creation, unity of spirit industrial implementation. We ate. Financial ones, however, and matter, and the body cannot purchase the essential do not ever recreate anything elements of production. This and soul of society at all. It is like the difference is because the essential elebetween DDT and napalm. ments of production have beAnd this financial crisis from excessive risk and come idiosyncratic personal skills that guarantee the unlimited greed of the top financial manag- the flow without redundancy of technology that ers is truly scary, because it may never end un- must have a distinctive competitiveness now. If less the machine of financial intermediaries is before, I could gain factors and organize them split in two, dividing the commercial banks from in a hierarchy through economic transactions, those that do not invest. When you are afraid, you today this is no longer sufficient. You must be search for safety. And industry is safety because able to attract the talents that are the keystone it is manufacturing, creation, unity of spirit and of the new industry that is advancing, thanks to matter, and the body and soul of society. Espe- an authority or technological, experiential, and cially now that the new industry no longer devel- even moral authoritativeness. What character012

izes talent is the passion united with skills and vice, Railways, Aviation), the so-called mediumabilities. But the real news is that today we want sized enterprises of the “fourth capitalism,” and to find and discover this passion in work man- the countless small businesses and artisans who agement as well as in what was once called “ex- are lagging far less behind than is commonly asecutive work” and which no longer exists today, sumed. In fact, small businesses and artisans are because all the workers of the new industry are the depositories of a prodigious wealth of craft skilled operators who direct and decide at their skills that are developed in the most diverse orwork place, just like the manager decides and di- ganizational populations: horizontal commodrects in the broader sphere of strategic planning. ity chains, where big and little intersect; vertical As the world turns, you feel the gentle breeze of functional chains, where multiple technologies the rebirth of industrial pride that unites employ- coexist; archipelagos of skills that are wonderers and workers, professionals ful islands of working capabiland managers, without any ity and entrepreneurial ability of these ancient but ever new Once again people are coming together. Everywhere, social figures losing their crea- breathing the pride of once again, people are breathtive force. Of course, despite ing the pride of craft, of knowthe many cultural barriers craft, of knowing how to ing how to do things with against industrialism that ex- do things with hands and hands and brain together. We ist in Italy, this new industrial need to make one more effort, brain together renaissance is deeply rooted in though. As families, as parents, our country. We must not forand as teachers, we should be get that, despite the destruction of our heritage, proud even if our children prefer to go to a profesrepresented by the large corporation and which sional or technical institute rather than get a coloccurred mainly in the 1990s, we are still the sec- lege degree. This is because I am sure that a good ond industrial power in Europe after Germany workman-operator, just like a good professional and we cover a much more important role in manager, can love reading Plato, Pascoli, Zanzothe world than one would think. Furthermore, tto, and Goethe even if they do not have a degree; we must not forget that this new configuration or if they do, it is a degree in engineering, seismolof industrial pride passes through the myriad ogy, geology, or biology. This is because the new threads of a rather composite weave: the large industry will not be able to be built without overcompanies (ENI, Enel, Finmeccanica, Postal Ser- throwing old hierarchies and unifying cultures. 013

scenarios

MANUFACTURING: THE ENGINE OF GROWTH by Giorgio Squinzi

Technological innovation is the engine of growth and productivity, and the underlying basis of the economic development of nations. And an innovative system is the heart of the manufacturing industry. The manufacturing sector contributes to the production of new scientific and technological knowledge more than other sectors, because the companies that are active in the industrial sectors closest to science are the ones that fund and manage the most important research laboratories. They also carry out most of the private research and development, which is the main input of innovative activity, and are more successful than others at using outside knowledge in the company and establishing

collaborative relationships with universities. In Europe, the geographical distribution of the innovative capacity, measured by the number of patents per capita, follows that of the industrial vocation. The manufacturing sector, therefore, continues to be the “engine room” of growth because the productivity gains of the entire economic system, directly or indirectly, originate from it; that is, through the innovations that are incorporated into the goods used in the rest of the economy. But the centrality of the processing industry in the development of a country is not only measured on the grounds of its capacity to produce innovation. In fact, the processing industry is also the means through which a coun-

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try substantially devoid of natural resources can manage to loosen the “external constraint” to growth – namely, its ability to finance the purchase of its imports. In the case of Italy, seeing as almost 80% of exports consists of manufactured products, without them it would not be possible to obtain raw materials, starting with energy, the purchase of which is funded by the surplus in its trade in manufactured goods with foreign countries. For all these reasons, the importance of manufacturing activity goes far beyond what the statistics reveal about its direct contribution to added value and employment of the entire

In a world in which “knowing how to do things right” is not enough, because we need to know how to do even better than the others, it is necessary to abandon the logic of passive adaptation to the conditions of the economic context and to actively act as a person who plans their future economy. The awareness of this fact is fueling a real rediscovery of the centrality of manufacturing in many industrialized countries. The more advanced nations have once again put the processing industry at the center of their development strategies. The United States, the United

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Kingdom, and France have initiated discussions and taken steps to focus firmly on the revitalization of the manufacturing industry. Germany has been doing so for some time. But also the emerging economies are running programs explicitly aimed at strengthening their manufacturing activities. These countries, whether advanced or emerging, are acting on a clear vision of the problem and have shown to be capable of pursuing long-term strategies consistent with the pinpointed objectives. Italy seems to be late. Any political decision made should always be grounded in a vision of the future of the countrysystem it relates to. Unfortunately, our past history and the very months we are living through now are a case of how this principle is all too often ignored. From one emergency to the next, decisions and measures add up that are unable to go beyond a short-term time horizon, and once the obstacle at hand has been overcome, it is followed by other decisions and other measures guided by the desire to hurry up. A more long-term view is necessary, making it possible to go back to thinking about policy as a tool to guide the future of the country, to rescue it from drifting toward having to choose between either doing one’s duty or following an agenda dictated by urgency, if not by other things. And it is necessary that this change of perspective not tarry in taking shape. The major industrial countries that we are dealing with, whether old or new, all have much to teach us from the point of view of the construction of a national system oriented to clear and explicit objectives. Italy’s delay could become dangerous, because already, in an international comparison, our country suffers from

manufacturing: the engine of growth

a lack of growth – in manufacturing, too – and lower productivity growth. If knowledge has always been the crucial element of competitiveness, it has become even more so today. In this key, increasing activity aimed at creating new knowledge and applying its use has become essential to strengthening the competitive factors of the country, because once high levels of percapita income have been reached, the growth of an economy depends on its autonomous ability to innovate. To do this, it is necessary to start from the many strengths that the Italian manufacturing industry still has, and at the same time deal with the weaknesses accumulated in areas where there seems to be a delay, which are the areas in which innovation is more closely linked to the progress of scientific knowledge. And because innovation is the result of a dense network of relationships between many actors (companies, universities, governmental and non-governmental research centers), the institutional conditions that facilitate the identification and adoption of technologies and new organizational models need to be strengthened. If Italy wants to continue to be an authoritative subject of economic life on a global scale, it can only be through the strength of its industrial system, which is the only area to consider investing in today in order to restart a process of development of the entire national system. The strong manufacturing vocation of our territories and the enormous human capital available to our industry – too often misunderstood by careless and superficial observers – form the basis of a possible re-industrialization of our economy, which is the only way that the country can escape from

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the current situation. The industry of our country has certainly suffered significant blows over the years, but despite the duration and intensity of a devastating recession, it has managed to show a resilience that is unimaginable to all those who do not really know our nature. At the same time, with regard to anyone who does business, it is good to first of all enforce the principle that – in a world in which “knowing how to do things right” is not enough because we need to know how to do even better than the others – it is necessary to abandon the logic of passive adaptation to the conditions of the economic context and to actively act as a person who plans their future. The line of demarcation between the entrepreneurs who will be able to manage the increasingly vertiginous changes and those who, unable to do so, will be forced to exit the market, is defined by the ability to build, around the “fast response” to the question, a kind of know-how that others do not have. The cornerstone of competitiveness will be the skills that the company will be able to develop and its ability to adopt organizational solutions consistent with them.

In Europe, the geographical distribution of the innovative capacity, measured by the number of patents per capita, follows that of the industrial vocation

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opinions

Planning the future by Davide Canavesio

â&#x20AC;&#x153;The sirens singing about a country that must evolve only toward services have become increasingly insistent in these years of crisis. And the prophecies of doom for a manufacturing sector that is no longer competitive and by now on the wane have become more and more frequent. I do not agree with either one or the other interpretation. And I say that as a manufacturing entrepreneur.â&#x20AC;?

Let us start with an essential fact: Italy today, despite everything, is the second largest manufacturing country in Europe. True, the crisis has accentuated the negative consequences of globalization and we have lost positions of competitiveness because of all the deadweight the country drags into its production system. Nevertheless, it is still possible to do manufacturing in Italy, provided that it is of high quality. To do so, we must focus on some key elements. We will start with competitiveness. In recent years, the export industry has been the only one

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driving the cases of slight recovery in our country. This confirms the fact that our products are still popular abroad. Let us get down to specifics and look at just one instance: China. For years, China has been a country of outlet for our manufacturing; and now the good news which many analysts agree with is that for the next 10 years, in the entire field of production of industrial goods and machine tools, China will not be as competitive in terms of technological quality as Northern Italy and Bavaria, the areas of Europe that have manufacturing as their strong point.

Saet — Saet for three years now has been working on a new product to make silicon ingots for PV. Now it is signing its first contracts with the top five players in the world in markets far from us and it has created an industry that literally did not exist until now. (www.saetgroup.com)

This, which might seem at odds with the investments in research and development and global growth in China, is actually justified by the fact that everything that is “production of technological knowledge” of machine tools or industrial processes is not only based solely on innovation and strong investment in R&D, but also on decades of accumulated experience, a kind of handicraft industry that cannot simply be bought with money, but that requires decades of work and experience. Experience that only large European industrial areas conserve. This is good news for our country: it means that in relation to China, as well as for other emerging markets, technological competitiveness is still an important weapon on which to focus. In fact, innovation itself can still open large markets: that of energy, for example. When it comes to energy, in Italy we tend to consider only the last part of the supply chain, disregarding the industrial parts that are upstream of the process, in which we are very strong and could be even more so. To offer a concrete case, the company that I head, Saet, has acquired a university spinoff in Padua and for three years now has been working on a new product to make silicon ingots for PV, based on our technology. The investment in research and development of a few million euros is paying off today and we are signing our first contracts with the top five players in the world in markets far from us – and not by chance, once again in China – and, thus, we have created an industry that literally did not exist until now. How did we do it? We have certainly followed

three key points: the focus of the business (with the construction of applications around the same technological focus), internationalization, and the innovation to create products that can serve the market. This case shows that what our country needs is to “unleash” the creative energy of our small multi-national companies. We are full of hidden champions in Italy, so we need to make sure that these businesses can grow on their own along the lines I mentioned: the focus of the business, the possibility of increasing new applications around it, great support for internationalization, and incentives in research and development. It is true that Italy is in the last place in the world rankings for investment in research and development; however, it would be simplistic to say that companies should have to be able to move ahead by themselves. A little history may be useful: even the legendary Silicon Valley, the incubator of all the extraordinary technological innovations of recent decades, grew in the Fifties and Sixties not simply due to the goodwill of the private sectors or the intersection of businesses, but due to strong investments by the United States government for Defense, and later, by NASA. Only catalytic processes of this type are able to channel the energy required to trigger virtuous processes of innovation. The prospect of industrial policy is clearly another matter that we, as entrepreneurs and as a country, should think about in terms of a European dimension. What our production system really lacks – beyond tax reforms, alleviation of the burden of bureaucracy, or a strong

focus on productivity – is a strong awareness of the need for an industrial policy. For nearly thirty years, this industrial policy has not been taken into account by our policy makers; yet, identifying strategic areas and channeling our resources, starting with our DNA, could really help our country and be more useful than an abundance of scattered aid. Industrial policy does not mean the entrance of the State into the industry sector; it means providing guidelines and identifying the key strategic directions to move along in order to give peace of mind to medium- and long-term investors. When Germany announced that by 2050 more than half of its energy will be produced from renewable sources, this clearly and irrefutably gave an indication of its industrial policy. It is not a question of incentives. Behind such a declaration, Germany and the international companies that will invest in Germany know that for the next forty years, this will be one of the drivers of growth in the country and hence, investments, even with a twenty-year payback, are justified. In a country like Italy, however, within three years, the incentives create bubbles which then disappear and leave the shortlived companies in ashes, without even halfway sowing a seed for industry in the future. Our country has a strong sense of the construction of material goods, of quality and manufacturing in its DNA. And it is in this sense that it has to plan its future, to fully achieve the prospects of the third industrial revolution that awaits the planet, and finally, to increase its competitiveness.

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01 / RESTRUCTURING

in-depth

Tomorrow’s production in seven words by Dario Di ico

In order to outline a present and future scenario of industry, we must first understand the elements that affect it. To understand the industry, let us start with a few words: restructuring, exports, supply chain, business networks, districts, retail, and trade unions.

We have had four years of crisis and the future of our manufacturing industry is still uncertain, to say the least. But rather than persisting with Cassandra-like forecasts, it would be worthwhile to try to grasp the point of some changes that have already occurred. I have chosen a few key words for the reader’s convenience, a short glossary of the crisis and its consequences in what is still one of the major industrial countries of the Old Continent.

The districts have been called upon to enlarge their territory, break down local closures, and extend their networks abroad. Will they be able to do so?

Restructuring Once, companies would undertake restructuring if there were an emergency, whether financial or due to the market. Now, even small business owners have understood that there is no solution of continuity and a company that wants to stay on the ball has to undergo constant check-ups. There are various (and welcome) techniques, but what almost always emerges is that manufacturers pay great attention to skills. Even knowing that the crisis demands ruthlessly cutting costs, no one has deprived themselves of personnel by “taking advantage” of the recession; in fact, today’s difficulties have increased the reflection on human capital and its strategic importance. A highly interesting work on restructuring by Cipolletta-De Nardis came out a few months ago, but there is a lack of recognition concerning outsourcing processes and their evolution. The relationship between industry and professions also needs to be evaluated. The affirmation of a Made in Italy tertiary sector that is qualified and able to serve the international market (and not only their own region) passes through that very relationship.

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02 / SUPPLY CHAIN 03 / EXPORTS Supply Chain The reorganization of companies, especially what could be called â&#x20AC;&#x153;non-defensiveâ&#x20AC;? reorganization, has certainly not stopped at the perimeter of the parent company, but rather, has invested the whole supply chain. There are many cases where this has been a positive process both in terms of efficiency and of social cohesion. The work carried out by at least three majors is highly interesting, two of which concern luxury goods (Gucci and Louis Vuitton) and one that deals with large distribution (Ikea); all three have entered into the world of providing a form of partnership in different territories. In some cases, such as the Swedish multi-national, greater attention is paid to the costs, and in others, to the quality. This has allowed suppliers to have more reliable horizons of commitment and to be able to count on interventions by the large company aimed at rationalizing or innovating a particular point in their production cycle. If we take a look at the Italian experience, it is interesting to observe those cases in which an immaterial item newly motivated the supply chain and innovated it. I am referring to the Salone del Mobile (Furniture Fair) in Milan and Slow Food in Piedmont. 022

Exports Someone in the trade union superficially sustained that we would have (guiltily) adopted an export led model. Not quite! Actually, one cannot say for certain that the system has moved according to a canonical principle but, in the face of the stagnant domestic demand, the way of foreign markets appeared to be the only card to play up to the very end. Strictly speaking, we could say that we should have realized it sooner, because if Germany exports more than we do in the food industry, with no insult intended to beer and sausages, it means that we have been resting on easy honors and have not squeezed out all our potential in exporting our industrial culture in the field of food. What is important is what has happened with regard to our attitude toward the exchange markets; the relative weakness of Western economies and the thrust of the BRICS could have left us without a leg to stand on, and instead, adaptability has been stronger than the trauma and some important results in the new markets have been achieved. Business networks The controversy over the dwarfism of

tomorrowâ&#x20AC;&#x2122;s production in seven words

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Y=C+X-M The export led economic model, which was introduced in the Seventies, sustains that external demand (as measured by exports) generates local development through multiplier effects on income and employment. Exports as an engine of growth of an economic system.

Italian companies as an insurmountable obstacle to growth is a waste of time and does not allow us to take a single step forward. Instead, the business networks can be an important tool, a painless way to aggregations. In this model, the small business continues to feel involved in a process of development and is not being brutally told to get out of the way, as a study presented by Confindustria did a few years ago which was then cataloged under the name of â&#x20AC;&#x153;T holding.â&#x20AC;? Today, there are about two thousand companies that are already on the Internet in one form or another, but that is very few, far too few. Not all the representative associations have been as committed as they should have been, and this has created delays. Some banks had promised to help the aggregation process by recognizing a sort of rating reward for those who collaborated to increase the size of their company, but on the periphery of all that, very little has resulted and the impression is that banks have a tendency to invest in the pro-SME campaigns more than to really heed the territory. Even the bank-firm relationship today fails to express its potential value and it is disconcerting that this

04 / BUSINESS NETWORKS question is not the subject of careful and self-critical assessment by the ABI, the Italian Banking Association. Districts The Italian district system seems to have withstood the impact of the recession, even if not uniformly. Some areas have paid dearly for their delays in innovation and market repositioning (i.e., chairs from Friuli); others have been able to deal with it blow by blow. Of course, I am referring to Sassuolo, which is trying to combine tiles and a green economy, and to the tanning

In our industrial culture, the cult of the product has too often led to its laying forgotten on the shelf: just churning out some lovely things is not enough, you also have to get them to the right place at the right time 023

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06 / RETAIL

05 / DISTRICTS 07 / TRADE UNIONS

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tomorrow’s production in seven words

sector in Arzignano, that has cut down production time and begun developing a fashionable product. According to the North-East Foundation, however, the districts should broaden their outlook so as to enlarge their territory, break down local closures, and extend their networks abroad. Will they be able to do so? The answer lies in their ability to re-specialize, or to cultivate the more traditional or niche market segments, but at the same time to introduce new products or concepts. In this case, perhaps there is a lack of accurate recognition of what is happening. Retail This is a matter in which we Italians are not doing as well as we should. Besides, if we had been better at understanding the bargaining strength of distribution (downstream) with respect to production (upstream), we would not have stood by while the Swedes created their multi-national furniture empire, making a mockery of the Italian masters. In our industrial culture, the cult of the product has too often led to its laying forgotten on the shelf: just churning out some lovely things is not enough, you also have to get them to the right place at the right time. Our French cousins could teach us a lot in this area. The Italian groups of large retailers today do not seem to be able to expand abroad as Auchan and Carrefour did, and thus, modern trading companies that can act as carriers of the Made in Italy products are lacking. Some interesting experiences have arisen, such as Eataly in the “food” sector, but we are still far below the needs and the present situation is not playing out in our favor. Trade Unions If we put aside the case of Fiat, which is absolutely eccentric, it is increasingly evident that there are two systems of industrial relations in Italy. One is Roman and the other is territorial. The first thrives on more or less bombastic interviews, on mediation within the individual confederations, on a debate

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dominated by the need to always churn out new laws. Without the consultation table, Roman trade unionism has lost its core business; it is struggling to change its mindset and anxiously trying to at least indicate its presence. It is an association of the apparatuses. But there is also a territorial reality of structured bargaining that is silent, unified, and collaborative. Often, territorial trade unions do not even send agreements accorded within a company to Rome for fear that some central official will pronounce their powerful “Nyet!” There are many new features within this multiplicity of agreements, starting with the weight that corporate welfare is taking on, in the wake of Luxottica. But very interesting solutions are also found from time to time in the fight against absenteeism or concerning salary merit, rewards, and productivity. The territories may give rise to a more modern system of industrial relations, proving useful to our recovery. PS: If we were to substitute the more or less ideological analyses of the future of our industry with a recognition of the phenomena, the land immediately becomes fertile. And to those who have come to the end of this article, please consider it just an appetizer.

The business networks can be an important tool. In this model, the small business continues to feel involved in a process of development 025

contexts

A MORE MODERN, EUROPEAN, AND COMPETITIVE ITALY by Corrado Passera

“The change in our country has just begun. We have charted a clear path with measures that were able to be taken with the limited resources and the limited time available, and today we already have an Italy that is more modern, more European, and more competitive. Now we need to move forward.”

In the last year, Italy has proven in many ways to be an interesting and effective laboratory among the European Union countries and in the world. At the end of 2011, we were a country that was dangerously slipping into a crisis potentially dramatic enough to risk losing national sovereignty. Today, after a year of hard work, we have regained international credibility and are once again playing a leading role in the EU and at all the major global tables. The Monti government has managed to achieve the profound change in our country by acting decisively through structural reforms – such as the modernization of the pension system and tax reform – and by, first and foremost, making our public finances secure. This fundamental result was possible thanks to the commitment of everyone – government, parliament, social partners – and the sense of responsibility shown by Italian citizens. Starting from the first act of our government, “Save Italy,” we have tried to jointly carry out strict policies and growth-oriented reforms. During these months, we

have gradually implemented a real agenda for sustainable growth that has touched upon and renewed the main elements of the structural weaknesses of our economic system and the main levers that can make our country more competitive and therefore better able to grow and create jobs. All the chickens had come home to roost because of many years of inaction. Italy can return to growth by solving – as is being done – the accumulated problems and taking advantage of many of our strengths. Our economy is very diversified and we have not made the mistake of neglecting everything else in favor of services alone. It is not by chance that we continue to be the second European manufacturing country after Germany and one of the leading exporters in the world. Italy is the world leader in areas that can only benefit from globalization, such as mechanical engineering and automation, food, the fashion system, and the house system. But there are positive prospects coming from various other sectors of our traditional strengths, such as tourism and the

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world of health. We do not lack entrepreneurial energies; private debt – of both households and businesses – is contained, while the total wealth of Italian households and their saving capacity, albeit smaller, are elements of strength. Our banking system is more solid than elsewhere and has not led to either rescue operations or costs for taxpayers, through both financial crises. Unlike many other countries, we do not have to recover from any financial or real estate bubbles. On this basis, we have begun to create a more modern and competitive country, providing it with an ecosystem of rules oriented toward facing the new challenges of international markets. Some of the competitive disadvantages that we have tackled in a significant manner include energy costs, the infrastructure gap, the lack of liquidity and credit, especially for small and medium-sized enterprises, and the bureaucracy. Energy: the liberalization of the gas market and the separation of ownership of SNAM from ENI, and the reform of the system of incentives for renewable sources are already a reality and are key points of the new National Energy Strategy. Through the NES – now in consultation – we charted the path that our country will have to follow concerning energy policies from now until 2020, significantly reducing our energy bills and dependence on foreign sources. Infrastructures: we have completely reformed the regulations sector, introducing radical simplification and speeding up the time required for the approval and execution of works. Through the CIPE (Inter-ministerial Committee for Economic Planning) we have released resources for almost 40 bil028

lion euros, opening or keeping open many construction sites and ensuring thousands of jobs. With the introduction of project bonds, we have provided the country with an innovative financial instrument that, among other measures, will allow us to attract private capital in the realization of strategic projects. Credit and liquidity: this is one of the fronts we have been working on right from the start, providing companies with 20 billion euros of credit guarantees from the Central Guarantee Fund of the State, making it possible for companies to offset receivables and payables with the public administration, and introducing the VAT regime for Cash. As of January 1, 2013, every new supply payment must take place within 60 days, as a result of the EU directive on payments that we implemented last November, the first of the major European countries to do so. It is certainly an important step forward in making our country more “normal.” Bureaucracy: we have launched an important series of simplifications for citizens and businesses, mainly working with trade associations. This is the route we need to take more and more, to increasingly lighten the weight of the government where it is not needed, eliminating unnecessary intermediaries and veto rights that are so commonplace today, and clarifying exactly who does what within a much lighter institutional framework than our current one. We have also worked hard during the year to consolidate the two main levers of business development: internationalization and the ability to innovate. For this reason we have strongly reformed and developed a system of instruments for supporting com-

a more modern, european, and competitive italy |

oxygen

We have begun to create a more modern and competitive country, providing it with an ecosystem of rules oriented toward facing the new challenges of international markets panies in foreign markets. This system now operates under the coordination of a control room presided over by the Minister of Foreign Affairs and the Minister of Economic Development and is shared, finally, with all the players who have acted for many years without being sufficiently coordinated: the Ministry of Agriculture, the Ministry of Tourism with ENIT (National Tourism Agency), the main trade associations, the Regions, and the Chambers of Commerce. The ICE (Italian Institute for Foreign Trade) was reconstituted on a new basis and with a well-defined mission. We have also initiated the rationalization of our foreign networks through greater integration between the embassies, consulates, ENIT offices, Chambers of Commerce, and the ICE itself. In order to attract foreign investment, the establishment of a so-called “Italy Desk” has been envisaged: that is to say, the creation of a single point of access for international investors. The same operation of system coordination is now happening with the financial support for internationalization, and the transition to the Deposits and Loans Fund of both SACE and SIMEST can be seen in this light. Two instruments of great importance concerning innovation are currently being evaluated by Parliament: the Italian digital agenda and the development of start-ups to open up a new frontier of “doing business.” The digital agenda is a reference to industrial policy through innovation. Resetting the digital divide, starting ultra-wideband services, and digital services of the public administration to citizens and businesses are the cornerstones of this important reform of European breadth. As

for start-ups, we have created a regulatory environment that is one of the most advanced and beneficial for the creation of innovative businesses: reduced bureaucracy and very low initial costs, benefits for the first four years of operation, with tax incentives attached, a more streamlined and flexible contract of employment, the possibility of involving employees in the capital of the company, raising funds online, and a bankruptcy law that allows the entrepreneur to start over more easily. Artisans can be at the center of this new model. Combining Made in Italy know-how with technology is one of the routes for the development of the manufacturing industry. Italy holds many cards that it can play to this regard. We intend to move forward along this road, and as soon as our resources will permit it, we believe it is important to provide our entrepreneurial system with a tax credit to encourage investments in research and innovation. Finally, another positive result to note is the agreement reached a few weeks ago by the social partners on productivity. This is an important agreement which will help recover a spread that has greatly expanded in recent years. The government has made nearly 2.2 billion euros available for reducing taxes on wages linked to productivity, illustrating the importance we attach to company contracts that increase productivity. The change in our country has just begun. We have charted a clear path with measures that could be taken with the limited resources and the limited time available, and today we already have an Italy that is more modern, more European, and more competitive. Now we need to move forward. 029

interview

THE VITALITY OF ITALIAN PRODUCTION interview with Alberto Quadrio Curzio, by Paolo Piacenza

There is still plenty of vitality in Italian industry. Despite the recession and increased competition from the East. Italy is still ranked fifth among the G20 economies for surplus trade of non-food industrial products, after China, Germany, Japan, and South Korea.

In this interview with Oxygen, Alberto Quadrio Curzio – President of the Class of Moral Sciences, History, and Philosophy of the National Academy of Lincei and of the Center for Research in Economic Analysis (CRANEC) of the Catholic University – confutes a few of the clichés about the health of the domestic industry, but insists that the only direction Italy can take is the one indicated by the European Union: more research, infrastructures, and energy. Basically, a more favorable context for those who produce. Quadrio Curzio recently co-wrote a book with Marco Fortis entitled Industry in the 150 years of the Unification of Italy. Paradigms and protagonists, published by Il Mulino in the Edison Foundation series. This longterm analysis is very useful to reconstruct a picture with the correct proportions.

What design emerges, Professor? And what is industry in Italy today? First of all, this analysis indicates that Italian industry has contributed not only to economic and social progress, but also to political-institutional progress according to the directives of important figures, from Quintino Sella to Giuseppe Colombo. From the Renaissance up to the present, the situation has obviously changed greatly. In particular, in the second half of the twentieth century, Italian industrial capitalism was modified by a scarcity of large private and public groups, and the subsequent emergence of small businesses and their districts. More recently, the medium and mediumlarge businesses, also known as the “fourth capitalism,” have established themselves. The manufacturing in-

dustry, however, is still the most competitive part of the Italian economy. Are some sectors suffering more and others less, and if so, which are they? And how do we avoid losing pieces of productive assets and the pace compared to other countries? Italy’s strong points are mechanics, food, furnishing, textiles and clothing, and design, according to the trade surplus. The term-concept “Made in Italy” that was coined for these manufactured products could be accompanied today by that of “Italian Made,” because many Italian companies are also strong in their production abroad, but have not lost any of their Italian characterization. If Italy wants to be among the largest in the manufacturing world, its growth will have to rely even more on

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quality, so that it may find strength in the medium-sized businesses because the small businesses cannot make a go of it alone. Today, Italy is ranked fifth among the G20 economies for surplus trade of non-food industrial products, after China, Germany, Japan, and South Korea. It must not lose this position. Some districts continue to show a bit of life. Can we consider them fundamental for Italy also at the beginning of the 21st century? The district as a socio-economic territorial system may still hold, but it must also be accompanied by business networks, which are non-territorial districts built on sectorial or cross-sectorial complementarity. This is to increase their functional size without sacrificing the business subjectivity that weighs heavily on entrepreneurs. The 2009 regulations, recently finalized by the government, are very useful for such purposes. I think the Italian difficulties in making the size of business grow can be at least attenuated – if not overcome. In particular, when there is a medium to large company at “the center” of the “business networks” required by law. Which factors would you highlight, in comparison to Germany? Italy’s North-East-Center (NEC, as Fua called it) has an industrial vocation that is very similar to Germany’s, while it differs from the latter in that it does not have many large groups. However, our country is dualistic. More precisely, the North-West (with 1.7 million employees in 2007) and the North-East (with 1.3 million employees) are the first two macromanufacturing regions of the European Union. They have more employed people than North Rhine-Westphalia, BadenWürttemberg, or Bavaria. Impressive numbers that confute many clichés. The economic and legal context in which businesses are operated in both countries are quite different. Rather than focus on a comparative analysis, I would like to try to outline the margins for improvement. As shown in the recent report of the European Commission (Member States Competitiveness Performance and Policies 2012 and attachments), among the weighting factors are inefficiency in the public administration of civil justice, corruption, and fraud. These are all factors that place us below the EU average. In addition to the heavy tax burden, we are paying for another burden: Italy ranks among the worst in the EU for the quality of its in032

frastructures. This problem has obvious impacts on industrial competitiveness. A weak point is research, both public and private: there are exceptions, but the overall picture is not encouraging. Is it only a problem of resources, or also of strategy and courage? According to the available Istat data, our spending on research and development in recent years (2006-2011) was around 17 to 19 billion euros. More than half of the expenditure was incurred by the business sector. That said, it is important to place Italy in the European context. On the whole, Italy spends 1.26% of its GDP on research and development (2010 data). The EU-27 average is 2%, with some Scandinavian countries reaching peaks of over 3.5%. Other major European countries such as Germany and France record much higher levels than Italy, 2.82% and 2.26%, respectively. The problem of scarce resources invested in R&D is a constant for Italy. Between 2005 and 2010, the percentage of expenditure to GDP increased from 1.09% to 1.26%. At the same time, the EU average increased from 1.83% to 2%. This progress is too small to meet the objectives of the “Europe 2020” strategy, which sets the target at 3% (1.53% being Italy’s). There needs to be a change because without investments in research and development it will not be possible to follow the path of growth nor to maintain our competitiveness compared to Japan, China, and other emerging countries. But having few resources, the change must be in the use of the investments, and then come about through strong selectivity of spending. Let us move on to the role of the public and the weight of macro-economic factors. The action of fiscal consolidation of the Italian government and the choices of the ECB seem to have initiated a positive way to reduce financial risk: how much is it and how much does the containment of the spread weigh on Italian industry? As we know, the crisis was born and raised in the USA. And between 2008 and 2009, Euroland (EMU) believed that the crisis would have stayed there. Instead, in 2010-11 it became full-fledged. It was only in this year that many innovations that had been painstakingly built since 2008 gained strength in the EMU. There were many weaknesses in the institutional framework of both Europe and Italy. All this also reflected on the macro-economic variables.

5th COUNTRY OF THE G20 Trade surplus for nonfood products

30 MILLION Manufacturing workers in Northern Italy

EU PRIMACY The North-East and North-West of Italy are the first two macro-regions of EU manufacturing

If Italy wants to be among the largest in the manufacturing world, its growth will have to rely even more on quality, so that it may find strength in the medium-sized businesses because the small businesses cannot make a go of it alone

the vitality of italian production

Now a faint light at the end of the tunnel can be glimpsed, but there is still much to do to bring the crisis to an end. It is not enough that the interest rates and spreads of Italy (and others) have fallen. Certainly, having a spread of around 350 basis points from a peak of about 550 is also a result of the Monti government, which has once again given credibility to Italy in Europe. It is also thanks to Mario Draghi that important signals were given to the markets. The injection of liquidity by the ECB of 1,000 trillion euros with LTRO (Long Term Refinancing Operations) interventions and then the prefigured OMTs (Outright Monetary Transactions) have restored stability to the banking and financial system of the EMU. There is still the problem of credit to businesses. Austerity is not enough: the companies are saying it and even the European Commission has long expressed the need to focus on the revival of long-term investments in transport infrastructures, logistics, intermodality, energy, broadband, and next-generation mobile networks. Would all this help Italian industry? I think it is essential to immediately have

an active strategy that needs to be based on two pillars: infrastructures and industry. First of all, the completion and upgrading of infrastructure networks, not only for the transport of goods and people but also for energy and telematics, is essential to start the growth. The priority therefore – for the whole economy and for reviving the industry – is investment in strategic infrastructures. The European Commission has estimated financing needs for the years and decades to come. And they are huge: for energy, 1 trillion euro by 2020; for transport, 1.5 trillion euros between 2010 and 2030, of which 500 by 2020; for telecommunications and broadband, 270 billion by 2020. Therefore, the Commission’s initiatives are appreciable, such as the “Connecting Europe Facility” and the “Europe 2020 Project Bond Initiative,” in which the European Investment Bank has a key role. Infrastructure investments should also be accompanied by those involving European industry. According to the European Commission’s communication A stronger European industry for growth and economic recovery, industry should be at the heart of the European growth plan. The goal is to bring the weight of

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European industry from the current 15.6% to 20% of the GDP by 2020 through these directives: investment and innovation, market expansion (domestic and international), access to credit and finance, human capital and skills. Another important element is the announced national energy plan. What should Italian industry ask of the government? Italy needs a national energy strategy placed within the European and international context in which its major energy companies operate. In compliance with the rules on liberalization, there is a problem of energy security that can never be overlooked. This is why the fact that Enel and Eni have remained outside the control of the government is important, as is the fact that the directors of these companies have been confirmed by governments of differing majorities. It is a sign that their international credibility is significant. In any case, the Italian energy problem to keep in mind is the geo-economic profiles for the development of trans-European networks and supply, through the wider Mediterranean and extending to the Middle East. 033

oxygen | 18 — 12.2012

opinions

Tweet & Quotes edited by oxygen “Here’s my plan for the next four years: make education and training a national priority; building on our manufacturing boom; boosting American-made energy. That’s the right path” Barack Obama

“Where will the job opportunities come from? From small businesses, industry, and clean energy” Bill Clinton

“If economic activity shifts from manufacturing to the creation of knowledge and services, innovation becomes a survival strategy” @JeremyScrivens

TWITTER TRENDING TOPICS — All time: Manufacturing: 2.037.967 Industry: 14.332.383 Innovation: 6.465.618

034

“A third revolution is underway. Production is becoming digital” @TheEconomist

“Now that CAD systems are so easy to use, the new frontier is Design for Manufacturing. It is what turns a maker into a producer” @chr1sa (Chris Anderson)

“It doesn’t matter if the Dow is at 5,000 or 50,000. If you are an entrepreneur, it is always a good time to start a company” @GuyKawasaki

“Encouraging discussions in the world of industry is a good way of opening the doors to innovation” @AmadeusITGroup

“Emerging businesses and start-ups are driving industrial innovation” Som Mittal (President of NASSCOM)

“The future is not General Motors, General Electric, General Mills, but companies called Local Motors, Local Electric, and Local Mills” @doctorow (Cory Doctorow)

“Italy is the second largest manufacturing nation in Europe after Germany, but if we didn’t have such high production costs and taxes, we would be the first” Vincenzo Boccia (Vice President of Confindustria and President of Small Industry)

“Big industry being influenced by the culture of start-ups” @fullo

“Italian manufacturing helps the microbusiness safeguard a chain of excellence that is Made in Italy” @GiornaleLusso

“Now that industry is experiencing a renaissance, manufacturing companies are thriving in America” @NBCNews

“In 20 years, in the timespan of one generation, we can double the GDP. This is our challenge as entrepreneurs” Jacopo Morelli (Vice President of Confindustria and President of Young Entrepreneurs)

“Less bureaucracy, more incentives for opening new businesses. You cannot get out of the current difficulties without starting to really invest in the young generations” Alessandro Benetton

035

scenarios

Global competition of industry by Carlo Marroni

The major industrialized countries are moving in search of solutions to the crisis; some are slowing down, others are exploring new territories. An overview of the sectors in which they are concentrated and the global interconnections that affect them.

There was some news in recent months that practically went unnoticed. The largest bookstore chain in the world, the American Barnes&Noble, which tallies 689 stores, avoided recording a decline in sales in its financial statements thanks to the boom of the Fifty Shades trilogy. Nearly 30 million copies, the most books sold in recent history, even more than Harry Potter, then considered incomparable. A coincidence? Maybe. But it certainly also signals an economic phenomenon that is being studied not just by those who deal in books (and who rejoice, seeing as there are still readers who go to buy at bookstores). Globalization has flattened the world, as Tom Friedman described it so well years ago, and has allowed us to level the gaps and accelerate the spreading of trends. For better or for worse: first growth, then the crisis. Which since 2007 – the year of maximum overall expansion in the post-war period for the entire planet – has been spreading progressively into the deepest folds of the real economy. But globalization now makes the value of excellence even clearer, as something which will trigger the recovery of the general economy and its transverse segments (districts, nations, macro-areas, continents). Similar to what happened to America’s largest bookstore, it will have learnt a lesson from The Shades experience for its business in the future. And it is precisely from the United States (where the main aspect of the crisis developed with the mortgage crisis, which was initially underestimated on Wall Street and in Washington, but also in Europe because of the specificity of “easy” American mortgages) that signs of a recovery seem to be coming, both concerning the GDP and the real estate market. But everyone is warning that this is a fragile and mild

recovery, seeing as it has to dispose of the indigestion from debt that weighed upon American families in the decade of 1995-2006, the real motor of a system based over 70% on domestic consumption. For now, the push is coming from government spending, while the profits of Corporate America have disappointed shareholders. Analysts agree: the U.S. locomotive will resume running only if there is a gradual decline in unemployment, which in some sectors – such as construction – will have to come to pass through redevelopment, seeing as re-absorption does not seem likely. The most concrete perspective for the U.S. economy is to bring production units which were outsourced years ago, especially to China, back to the homeland as soon as possible. Now, production in the former Middle Kingdom is no longer so convenient. On the contrary. And alongside the activity of manufacturing and services, in America there is a very strong increase in revenue from the industry of extracting hydrocarbons, particularly shale-gas, which is making the United States almost self-sufficient in the supply of natural gas. And then there is China. The prospects of the world’s second economic power are central to the fate of almost all areas of the world, from the United States to Europe, from the Far East to South America, some of which belong to the exclusive club of the BRICS, the group of new economies (Brazil, Russia, India, and China, to which South Africa has been added) – and to which Turkey can be associated in different capacities – which have driven growth in the past decade. Now, everyone is inexorably slowing down, and everyone is trying to find an original and effective way to prevent the tumultuous growth from turning into a bubble. Since the beginning of the year,

—

Brazil: automobiles

—

China: clean technology

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3.31 million cars produced in the last year

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Russia: hi-tech industry

—

United States: shale gas

Between 2010 and 2011: +29% investments

—

653 billion cubic meters of gas produced in 2011

300,000 people work in the high-tech industry in Russia

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China has been growing at a rate of less than 8%, a dizzying percentage for the West but which in those parts means being almost stagnant if you think that in the fateful year of 2007 (IMF data), it recorded +14%. All this has resulted in a vertiginous rise in labor costs, to the point that, for new investments, Chinese companies now outsource to Vietnam and Burma. The new five-year plan, which will accompany the party congress at the end of the year when the new leadership – led by Xi Jinping – for the next decade will be revealed, will focus increasingly on products with high added value (and fewer cheap ones) and, at the same time, on a strategy that is oriented less toward exporting and more toward satisfying the domestic demand. In particular, also given the chronic shortage of raw materials for energy to meet the demand, it will be strongly focused on the production of electric vehicles and all technologies related to the green economy. Alongside China, there is India, which also has experienced double-digit growth rates, highlighting particular excellence in terms of information technology. But the great productivity boost has not been able to bridge the infrastructure deficit that afflicts the subcontinent, which slows the transit of goods and the flow of foreign investment. And in fact, the creation of high-speed railway lines will be one of the guidelines of New Delhi’s economic policies. Which are also discouraged by the exceeding difficulty in doing business (the power of interdiction by local authorities is still very high), an excess of statism, and the backwardness of the retail trading system that prevents the emergence of large retail chains essential for channeling the production of other areas of the immense country. Overcoming the crisis thus passes by way of structural reforms, but these must overcome the political hostility. Even Brazil, an ever-increasing power in energy and agricultural production, is marking time: after dizzying growth – in 2010 reaching 7.5% – its economy is now traveling at a modest +1.5%. The main cause is the slowdown in China, its main export market especially for raw materials. In addition, like the other BRICS, Brazil, too, must take into account an increase in the cost of living and of work that clashes with an inflexible production structure, given the government’s strong presence in the economy. Furthermore, the real is over-rated. The combination of these factors is fueling the temptation of the federal government to increase tariffs to outsiders, a matter that is considered unlikely, however, given the two key events that await the country: the organization of the World Cup soccer championships in 2014 and the Olympics in 2016, for which an expected boost to the GDP is taken for granted. In any case, the automotive industry is one of the leading sectors that Brazil is counting on in order to trigger a new virtuous cycle of growth. As far as Russia is concerned, even Moscow is working to diversify its economy, which is too dependent on exports of oil and gas. The postcrisis challenge is to create a solid industrial structure of high added value, especially in high technology, as evidenced by the project for the creation of 038

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Japan: green economy

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483 billion dollars in planned investments for the next 20 years

The most concrete perspective for the U.S. economy is to bring production units which were outsourced years ago, especially to China, back to the homeland

global competition of industry

The prospects of the world’s second economic power are central to the fate of almost all areas of the world, from the United States to Europe, from the Far East to South America

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Germany: industrial education

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+11% investments in the upgrading of the labor force in 2012

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Skolkovo, the Russian Silicon Valley. Japan, the former second world economy, is undergoing a profound transformation in its traditional structure. The large conglomerates (brought there in the Eighties and early Nineties) that operated in almost all areas have long been in crisis: large-scale diversification no longer pays off, and the ongoing challenge is the refocusing on specific areas of core business. In addition, the accident at the Fukushima power plant and the subsequent decision to abandon nuclear power (at least partially) is already pushing Japanese companies to shift production into the same areas where the Chinese are headed. At the same time, the government’s intention to focus on technologies and renewable energy applications is clear. In Europe, where the exit from the crisis has aspects and dynamics that are quite specific due to the euro currency, Germany also dictates the agenda in maintaining the supremacy of the manufacturing industry, which nevertheless is marking time, especially in exports to China, where it had reigned supreme in luxury goods for years. In Germany, the excess savings have not been reinvested in the country, and thus the industrial system (which therefore cannot rely on substantial capital loans on a domestic basis) must defend its competitiveness by raising the level of domestic production in terms of quality, research, and innovation. And in parallel, it is considered essential that the process of upgrading the workforce through investment in education be successful (the federal budget shows an 11% increase in 2012 in this regard), to increase the supremacy of high-end manufacturing. France has a head start in domestic research and innovation, also with a model of targeted outsourcing on the markets that will best protect it. But beyond the Alps, the situation is difficult: confidence is falling, orders are taking a downturn, and there is a high degree of uncertainty, exacerbated by the supertax on the “super-rich.” Furthermore, the model of large retail chains, the traditional marketing channel (also abroad) to a large segment of Made in France, is in crisis, especially in the agriculturefood sector. Finally, there is the case Africa: the IMF estimates that, over the next 30 years, six of the ten countries with the highest rate of growth will be in Africa, where by 2060 – an estimate by the World Bank – a middle class of one billion people will have been formed. So, as well as Nigeria and Angola – “oil” countries – and South Africa, which by now has become the continental locomotive, we have to keep in mind Ethiopia, Mozambique, and the entire Maghreb area. Areas that will integrate more and more with each other, with privileged relationships, as well as with China and with the MIST countries (a newly-minted neologism): Mexico, Indonesia, South Korea, and Turkey, the latter as the new frontier, especially in telecommunications and financial services. All countries that – along with others like Pakistan, Bangladesh, Vietnam, and the Philippines – have a young (and in some cases, very poor) population that is ready to enter the game of the new globalization. 039

oxygen | 16 â&#x20AC;&#x201D; 03.2012

passepartout

The added value of industry

8.6% 2.5%

6.5%

28.5% 14.6%

edited by Oxygen info-graphics Undesign

1.8%

Industry is no longer the main economic driving force of world economies. But, even with a lower percentage than that of the tertiary sector, it weighs crucially on the global gross domestic product (in many countries, it is responsible for about one third of their GDP). Despite the new industrial sectors in which nations aim to revive their economies, the driving forces in the G8 countries are still their manufacturing, construction, mining, and electrical sectors. And sometimes, they play a strategic role, even if they account for only a small percentage when calculated on total GDP.

Mining

0.4% 2.1%

CANADA

1.9%

0.2% 2.6%

2.8% 12.3%

1.5%

19.2% 1.9%

1.7%

3.8%

UNITED STATES

Electricity

0.3%

% industry

4.6%

0.1% Construction

Mechanical

3.3% 2.6%

Manufacturing 6.1% Textile

3.4%

27.3% 19.8%

JAPAN Food 040

Chemical

UNITED KINGDOM

RUSSIA

0.4% 2.4%

1.7%

0.3%

2.4% 1.8% 1.8%

2.5%

1.7% 2.6%

21.5%

17.5% 12.4%

6.1%

36.9%

3.2%

5.5% 9.1% 1.6% 10.2% 7.3% 37.1%

GERMANY

11.5% 2.3% 0.4%

28.6% 6.3% 4.3% 2.9%

24.6%

ITALY 16.1%

0.2%

3.9%

1.5% 1.2% 0.2%

1.9%

1.9% 1.9% 10.6%

FRANCE Data

1.6% 0.1%

18.7% 6.4%

Percentage contribution to total GDP Sources: OECD Stan database Eurostat 2012 â&#x20AC;&#x201C; CIA The World Factbook World Development Indicators Database

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scenarios

The fifth industrial revolution by Peter Marsh

An analysis of the impending revolution in the manufacturing sector, an overview of the lessons drawn from past industrial revolutions and those of the present of economic crisis. And some social and economic benefits that a new revolution could achieve.

The past decade has been a gloomy time when it comes to discussion of prospects for rich countries in manufacturing. The story has been one of a continual loss of competitiveness and capabilities by the world’s most developed nations in factory production. The result has been a steady shift of output to the low-wage nations, with China most firmly in the ascendancy. Now, however, the world is on the brink of a new era. This shift in fortunes of the developed and developing world in manufacturing will begin to go into reverse. Manufacturing in the rich countries will stage a comeback. Behind this trend is a mix of factors, linked to technology, economics, consumer behavior and the operation of global supply chains and the internet. I have called this change “the new industrial revolution”1. The label is an effective way to separate the new era from the other big shifts in manufacturing that have taken place in the past. The “new” revolution is the fifth such change in history, as I explain later. At the heart of this switch is a simple proposition. Over the next

10 years, the proportion of global manufacturing done in the rich countries will decline at nothing like the rate experienced in the past decade, and may even see a modest increase. There will be crucial consequences for the world’s traditional industrial leaders – the countries of western Europe together with the U.S., Canada and Japan. The new period will coincide with a time of growing confidence for engineering and production businesses based in these regions. Job opportunities in these companies’ highcost locations will be more abundant than elsewhere for a decade, particularly for those people with a high level of technical skills. The new industrial revolution comes at a difficult time. For several years, the economies of the world’s rich nations have been in a highly fragile state. This has resulted from the 2007/08 financial crisis, coupled to its aftermath in the shape of high government and consumer indebtedness and a steep fall in business confidence, most notably in the eurozone. So politicians, business leaders and others will have

every reason to welcome the period of change as marking out a time when economic optimism starts to rise, after a prolonged period when it has been in extremely short supply. The advances in emerging economies in the 2000-2011 period in manufacturing were led by China. They have also involved – albeit to a lower degree – others among the poorer nations, including India, Brazil and eastern Europe and Russia. Key factors have included the lower costs of production in these regions, mainly linked to wages. That has encouraged more companies to shift manufacturing there, even if the final consumer is in the western world. At the same time, the growing demand for increasingly sophisticated factory-made products in the developing nations has prompted more industrial investment in such locations. Resulting from this change has been a big move upwards in the amount of world manufacturing done in the world’s poorest, least developed countries. The figure rose from just 24% of total global production in 1990 – and 27% in 2000 – to 46%

BRITISH PRIDE The history of Great Britain, the subject of the opening ceremony of the 2012 Olympic Games in London at the Olympic Stadium, was bound to include a celebration of the Industrial Revolution. In its remembrance, one of the five Olympic rings was spectacularly forged among the smokestacks.

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in 2011. It follows from this that the amount of the world’s manufacturing done by the rich, “western world” has seen a big decline that has been particularly fast over the past decade. The figure has come down from 76% in 1990, and 73% in 2000, to just 54 % last year2. China has been responsible for a large part of the shift. In 2000, China accounted for 7% of world manufacturing output. By 2005, this had risen to 9.8%. Over the six years to 2011, China’s share doubled to 19.8%. That put China above the US in terms of share of factory production. It was a historic change: 2011 was the first year for more than a century in which the US was anything other than the world’s top country in terms of factory output. China’s rise has been much more impressive than that of any other country in the emerging markets bloc. Over the 2000-2011 period, Brazil’s share of world manufacturing production went up from 1.7% to 2.9%; India’s increased from 1.2% to 2.3%; while the equivalent change for Russia was from 0.8% to 2.3%. The mirror images of these changes have concerned the developed world. The US’s share of world manufacturing output went from 27.1% in 2000 to 18% in 2011; over the same period the equivalent number for Japan slipped from 18.3% to 10.2%; for Germany, the drop was from 6.9% to 6.4%; and for Italy it went from 3.6% to 3%. These figures require some historical context. China being the biggest manufacturing nation in the world would have been – just 20 years ago – very hard to imagine. But in 1800 – for anyone who was fully aware of global economic trends – China as the largest manufacturing power was an incontrovertible fact. Indeed, for several hundred years until around 1840, China was top of the world league table in industrial production. (Of course, no one counted up “industrial production” back then. Also the modern word “factory” had barely been invented. When I use “industrial production” in reference to past eras, I refer to output of material-based goods using human labour and ideas.) In 1800, China’s share of world factory output was 33%, just ahead of India. In that year, what we now call emerging economies were responsible for 71% of world production, with the nations now categorized as the western world accounting for the remaining 29%. It is simple to work out why this was the 044

case. China, India and the other nations in what we now label as the poor world were much more populated than other regions such as western Europe and North America. Manufacturing then existed only in a rudimentary form. The productivity improvements clustered around modern manufacturing – leading to the possibility of higher output per worker due to technological enhancements – had yet to be invented. So when it came to manufacturing capability, output roughly went alongside worker numbers. The more people a country had, the greater would be its output. But changes were on their way. The first industrial revolution – what most people call THE Industrial Revolution – made big productivity advances possible in factories making a range of goods from textiles to machine tools. As a result, countries with small populations, and with a correspondingly small number of people in factories, for the first time could punch above their weight in industrial output. The first industrial revolution The first industrial revolution took place starting around 1780. It had a powerful and growing impact on the world for about 50 years. Its biggest and most immediate effects were in Britain. The shifts resulting from the first revolution were linked to changes in the mechanization of textiles

production, the emerging disciplines of metallurgy and the advent of steam power. The changes fed through to other areas of industry. They meshed in with other key movements – for instance, in the advent of new forms of company organization; higher rates of literacy resulting from better education; and improvements in agriculture and food supply. The first industrial revolution – with its impact accelerating during the 19th century – was why Britain took over as the biggest country in terms of factory production just before 1850. Britain’s position as number 1 in manufacturing only lasted for about 50 years. By around 1895, the US had usurped Britain as the leading country by this measure. It held this position until 2011. Britain’s tenure as the biggest country in manufacturing output – at its peak in the late 19th century the country was responsible for 15-20% of world industrial production – was also due to the second and third revolutions in the sequence. Both of these were also centered on Britain (although other countries, notably Germany, France and the US also played strong roles). The second industrial revolution The second revolution was the transport and communications revolution. It began around 1850. It took shape around improvements in ship construction; the emergence of railways

the fifth industrial revolution

(driven originally by steam power); and the invention of the telegraphy. The third industrial revolution The third revolution was a broad set of changes based around new scientific thinking. Key disciplines were maths, chemistry and physics. The shift had its impact from 1890 onwards. Resulting from this was the availability (for the first time) of electricity on a “made to order” basis. This new form of power was capable of driving a range of disparate industrial processes. Linked to this were changes in production technologies leading to (among others) cheap and plentiful steel and a broad spectrum of new chemicals, among them drugs, dyestuffs and industrial commodity such as sulphuric acid.

What lies behind the new – the fifth – industrial revolution? And how will this affect the world? There are seven factors behind the new period of change

The fourth industrial revolution The fourth industrial revolution had its impact well into the 20th century. Taking shape around 1950, and with its effects gathering momentum for 30-40 years after this, the fourth revolution was about computers and electronics. It made the personal computer, high-speed data routers and the Internet all possible. The impact of the first four revolutions was largely confined to the rich countries, as they are currently defined. It was why these countries – which were the first to gain from the fruits of modern industrial development starting from around

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1800 – had not only leapt ahead in the early years of this era but had stayed ahead. The period in which these countries remained in the lead lasted until around 1990. It was only after this that the changes ushered in by all the four periods of industrial shift built up sufficient momentum for their impact to be felt by countries outside the main developed bloc. This is how the leading emerging nations led by China started to become important industrial players for the first time in about 150 years. The fifth industrial revolution What lies behind the new – the fifth – industrial revolution? And how will this affect the world? There are seven factors behind the new period of change. The first of these concerns changes in technology. A wide range of new technologies – concerning electronics control, materials science, nano-technology, and new forms of mechanized production (involving ideas such as “additive” manufacturing, built around new generations of 3D printing machines ) – will have an impact. In most of these areas, the rich countries of the US, Japan and western Europe have made the biggest advances. They will also turn out to be the biggest beneficiaries of the changes. A second factor concerns greater requirements for product customization. This refers to the increasing “tailoring” of products, from consumer gadgets to industrial machines, to suit the requirement of the user. The shift is likely to necessitate manufacturing closer to where the goods will be used, so that the necessary design changes can be incorporated most effectively. In cases where the products’ customers are in the developed nations, it will therefore often be more sensible to base production in these places, rather than in an emerging country some distance away, even if production costs are lower there. Changes in technology are in step with the increased requirement for customized goods – including more sophisticated methods of automation. These make it easier and cheaper to make a small series of goods honed to meet the requirements of customers. A third aspect concerns the growth of global supply chains and information networks (the latter building on the internet). These changes will give a new competitive advantage to manufacturing companies based in high cost nations. Even when they choose to base 045

oxygen | 18 — 12.2012

the physical production of goods in low-wage nations such as China, the high-cost country will often be in a better position to act as the home for research and development activities. Here, businesses will be able to employ relatively large (and well paid) labour forces, not in the physical aspects of production but in the “soft” side of manufacturing concerned with the intellectual effort of making new goods possible. The fourth factor concerns the rise of China. The relatively sudden re-appearance of this country as a manufacturing power has given a huge impetus to the global activity of goods production. It is possible to regard China’s rise as a threat. Indeed, this is how the country has been viewed in many quarters, not least by manufacturers based in highcost nations that have seen new factories based in China emerge as powerful competitors. However, the way China fits into global supply chains can also be viewed as providing a potential help to a company based in the developed bloc. The production capabilities of a China-based industrial site can be leveraged to good effect by being used as a supplier. China is also an important new market for companies that make new sorts of industrial and consumer goods and are based in

046

the West. Moreover, the direct competitive threat of China-based production operations will be reduced (but not go away altogether) as a result of the higher wages and other costs starting to make their presence felt in China Fifth is the emergence of new industries based on extremely narrow areas of production (and related service activities). These are the so-called “niche” or “sliver” sectors that barely existed in the past. But today – due to changes in technology and industrial organization, plus the new possibilities that exist for selling globally using the Internet and better transport links – such narrow sectors are becoming more viable as an area in which small industrial businesses can often compete on a global basis. In most cases, niche companies are found in Western nations, rather than in the emerging economies. Examples of these new niche businesses include: the manufacture of high-speed air-bearing spindles for drilling machines; production of new forms of specialized lighting using semiconductor-based light-emitting diodes; the production and servicing of ultra-thin and sometimes flexible steel pipes for industries from energy exploration to medical equipment; and high-precision pumps for use in the food industry, aircraft production

Now that factory production is more widespread, the results of the new industrial revolution will have an impact virtually everywhere

the fifth industrial revolution

and fluid sampling, for instance, for the health industry or environmental management. The sixth key factor concerns the growing importance of small clusters of companies and research organizations – often versed in complementary or identical technical disciplines – that are concentrated in the same small geographical region. Such clusters are mainly to be found in advanced industrial economies. They are by no means new. But their impact will become greater in the new industrial revolution. That is, as the the forces of globalization make it possible to amplify the impact of technological and marketing verve in a specific location to many more parts of the world than would have been possible in earlier eras. In the new era, small concentrations of industrial expertise – perhaps in a corner of Italy, Germany or the US – will use global supply chains and support networks to have an effect in a scattered way in many far-flung parts of the world. The final point is linked to the way environmental factors are playing a part in influencing how companies operate. In the past, manufacturing companies were almost always associated with despoiling the environment. This happened either through pollution during production processes, or in the way the goods were used after they left the

factory. Now, environmental factors are being used by companies much more positively, as a potential competitive advantage. Companies in sectors from electric motors to car production are investing in new manufacturing methods or novel types of products to make their businesses much more “environmentally friendly”. New industries – such as production of photovoltaic cells and wind turbines – have emerged. Their purpose is not only to make money for their investors but to reduce the environmental dangers affecting the world. The new industrial revolution is likely to become the first big shift in manufacturing in which the threats to the global environment stabilize – or recede somewhat – rather than increase. By making use of some if not all of these seven factors, a range of industrial companies and based in high-cost nations will find they may emerge over the next 10-20 years in a stronger condition. Businesses in a good position to exploit these ideas include big and small groups – taking in well-known names as well as companies barely known outside their own industrial sectors. They include: Luxottica, a Milan-based group that is the world’s biggest maker of spectacle frames and which produces its items in a highly diverse and high-tech set of processes centered on produc-

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tion bases in Italy, China and the US; Trumpf, a German business that is the world’s biggest maker of laser-cutting machines for metals, and whose competitive advantages lie in combining technological advances with ability to connect up with thousands of customers globally; ABB, a Swiss-Swedish engineering giant that makes new forms of automation plus electricity distribution hardware; Whitford, a US maker of fluoropolymer coatings for an immense array of applications from oil platforms to the food industry; Strix, a UK-based company which is the world’s biggest maker of kettle thermostats and has extensive manufacturing operations in China; and Oiles, a Japanese maker of lubrication-free bearings. The original Industrial Revolution boosted the prospects of manufacturers – which happened to be mainly concentrated in the rich nations. Now that factory production is more widespread, the results of the new industrial revolution will have an impact virtually everywhere. However, the initial effects will be felt most keenly in the rich world. During the 1800s, the first Industrial Revolution was a key factor driving manufacturing growth in the Western world. As the 21st century progresses, the new industrial revolution is likely to do something similar.

NOTES (1) “The New Industrial Revolution: Consumers, Globalization and the End of Mass Production”, published in June 2012 by Yale University Press. (2) In this article poor nations – which can also be called by other terms such as “developing”, “newly industrialized”, “emerging” and so on – are defined as all the countries outside the “rich” or “developed” parts of the world, otherwise labelled as “the West”. The definitions are based on world conditions of the late 20th century. In earlier periods, when the differential in terms of wealth between Europe and the US and other parts of

the world was far less than today, different definitions would have applied. In the present day, “the West” is categorized as the 15 EU nations prior to enlargement of the EU bloc in 2004 (Germany, Italy, France, the UK, Sweden, Denmark, Finland, Luxembourg, Belgium, Netherlands, Spain, Greece, Portugal, Austria, Ireland); Switzerland and Norway; the US and Japan; and Australia, New Zealand, Canada. My data for manufacturing output is based on calculations by IHS Global Insight, a US economic consultancy. Further details on the derivation of the figures are given in my book.

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data visualization

Business: how attractive is Italy? edited by Oxygen Oxygen

Italy? Not too attractive nor very free. The Doing Business Index (doingbusiness. org) of the World Bank Group – that calculates the attractiveness of 185 countries in the world for entrepreneurial activity – in fact, ranked Italy at 73rd place worldwide, but next to last among the high-income OECD countries. The Index of Economic Freedom (heritage. org/index) developed by the Heritage Foundation, instead, determines the degree of economic freedom of 179 countries and puts Italy in 92nd place (36th of the 43 European countries). The 10 indicators that make up each index recount a country with an inefficient judicial system, a cumbersome and slow bureaucracy, and burdened with many taxes; but also a country where investors are generally protected and where there is good business, and monetary and investment freedom. A country just above and just below the world average.

Doing Business — Index of Economic Freedom

84th

160th

STARTING A BUSINESS

EFFICIENCY

place Italy is 84th out of 185 countries for the ease of starting a business. New Zealand takes first place.

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place

Italy is 160th for efficiency in resolving commercial disputes. Luxembourg takes first place.

103th

92nd

12th

169th

BUILDING PERMITS

ECONOMIC FREEDOM

FREEDOM OF COMMERCE

TAXATION

There are 102 countries that require fewer building permits than Italy. First of all, Hong Kong.

Italy is in 92nd place for economic freedom, with 58.8 points. The world average is 59.5 and the country with the most freedom is Hong Kong.

Italy ranks 12th for freedom of commerce. The top three in the ranking are Hong Kong, Macau, and Singapore.

place

Italy has 169 times more taxes than Bahrain, which leads the ranking of the countries where businesses are less burdened by the Internal Revenue Service.

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in-depth

Should we produce fewer “things”? by Donato Speroni

Industries will always be producing. What economists are debating is whether we should really be producing less and, in this case, how to survive, or if instead the world – as some think – is able to grow exponentially, like the memory of certain chips.

Abundance — Starts from the concept of exponential growth, applied to technological progress. The best known case is Moore’s law, which provides for the doubling, at the same price, of the memory capacity of chips required for computers

How will the factory of the future be? The great changes that have occurred in the recent past have already revolutionized production work. Many repetitive tasks have been replaced by robots, while the computer has allowed for greater flexibility, moving from mass production to those that are customized based on customer requirements. Working has become less heavy than the old assembly line, but it requires new skills and attention. The factory has changed but it has not disappeared, however, be-

cause the virtual cannot replace the real “things” we still need and someone to produce them. Indeed, economic progress opens new perspectives because it increases the demand of countries that have remained on the sidelines until now. But considering the environmental constraints, what are the areas of growth in manufacturing productions that we can rely on? Will technological innovation be able to remove the constraints that threaten progress? The diagnoses intersect and contradict each other. In a highly de-

bated study released last August (Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds), the economist Robert J. Gordon argues that the three industrial revolutions we have experienced so far (steam and railways from 1750 to 1830; electricity, oil, and communications from 1870 to 1900; computers and mobile phones after 1960) have given impetus to shorter and shorter periods of growth, and that the result of many “adverse winds,” from population growth to the spreading of inequality, is that the per capita income for 99% of Americans will not grow more than 0.5% annually for the next decades. This matter concerning the United States also applies to the other industrialized countries and the diagnosis is not too far from that of the “doomsayers,” such as Richard Heinberg (The End of Growth), who are convinced that overpopulation, climate change, and the depletion of raw materials will lead the Earth to the “end of growth.” A diagnosis, according to them, that can especially be identified with a drop in the manufacturing output. But there are those who think in a radically different way, such as the authors of Abundance – The Future Is Better Than You Think (soon to be published in Italy by Codice Edizioni). Peter Diamandis is an entrepreneur who has founded a dozen hightech companies; Steven Kotler is a well-known science writer. Abundance starts from the concept of exponential growth, applied to

technological progress. The best known case is Moore’s law, which provides for the doubling, at the same price, of the memory capacity of chips required for computers, but the same rule applies to many other cases. The effect of this progress is that technologies that are difficult to imagine even today will be made available to all of mankind in the next few years. Not surprisingly, Diamandis, together with Raymond Kurzweil, is one of the co-founders of Singularity University, a NASA research center in California that is studying the combined effects of biotechnology, computer systems, networks and sensors, artificial intelligence, robotics, medicine, and nanotechnology. Great attention is also being devoted to digital manufacturing, i.e., the possibility to produce three-dimensional objects with the same ease with which we are now producing photocopies. Will this be the factory of the future? In a sense, because many simple productions can be achieved through these machines, without the need for an actual “factory.” But it is hard to imagine that the factory as a place of production and assembly of more complex objects could disappear. It is possible that the authors of Abundance are overly optimistic. Industrial revolutions do not arise from technological innovation alone, but also from the availability of raw materials and capital, as well as the political and organizational capacity to accommodate the new. In short, the instruments of growth are at our disposal, but using them the best we can will not be easy.

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contexts

Businesses that think in networks by Aldo Bonomi

A resource for creating relations of exchange and support among the companies that have to deal with this current time of economic crisis and changes: the network contract as a guiding tool for aggregation and inter-firm collaboration.

During the Marcegaglia Presidency of Confindustria, I was entrusted with the creation of an ad hoc project: to boost the aggregation of businesses to improve competitiveness and innovation of the Italian entrepreneurial panorama. So on October 28, 2009, this gave rise to the Confindustria agency, RetImpresa, aimed at creating favorable conditions for dissemination and aggregation through the then-new tool of the network contract. Only three years after this form of contract was introduced into the national legal system, at least 458 networks have come into being, with the participation of 2,469 companies from all over the country. Companies have long been engaged in forms of collaboration and integration, and the aggregations that formed spontaneously have become the heritage of Italian companies. However, entrepreneurs today underscore their willingness and interest to work for the creation of specific, shared, and well defined programs, but they aim to do so while maintaining independence and autonomy in the management of their business. Therefore, the network contract is one more chance for businesses with respect to the traditional aggregation mechanisms such as mergers, consortia, ATI, and joint ventures. This is a cultural leap toward aggregation that is not only numerical and quantitative

but a reasoning that concerns a common program to help businesses grow together, enlarging the radius of action in order to achieve their very demanding objectives individually. The development of ICT has made it possible to overcome those mechanisms of purely territorial cooperation that have proven to be inadequate to meet the increasing relational, informational, and economic exchanges of businesses. Although starting from the specificity and local traditions, it is necessary to expand the size of the district by building more extensive and extraterritorial collaborations that can improve the competitiveness of the domestic and foreign markets. While by definition the district refers to a local and limited phenomenon in which companies specialize in a particular sector, the network concept covers the ideal of broader collaboration, not only based on geographical proximity but also on real and effective opportunities to increase competitiveness through the exchange of technologies, information, and knowledge. This is why the network, bringing together companies from different sectors that may find advantages in the mutual exchange of knowledge and skills, responds to the request to overcome localism and appears to be the natural evolution of the collaborative model of the modern production sys-

tem. The network contract is the tool that has successfully responded to the request of businesses for a reference guide that makes their collaboration even more effective, a scheme to follow, albeit in a flexible way, that ensures their entrepreneurial autonomy. The network contract provides streamlined governance, free of bureaucratic superstructures that complicate operations, but without relinquishing the essential pragmatic elements. The highly innovative scope of this tool enables networks to acquire a well-defined and eas-

The network, bringing together companies from different sectors that may find advantages in the mutual exchange of knowledge and skills, responds to the request to overcome localism ily recognizable structure, bound only to the object of the contract and as stipulated in the joint program. The network contract, modeled on and â&#x20AC;&#x153;tailormadeâ&#x20AC;? to the characteristics of its contractors, is effective and adaptable to the needs of companies of all types

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Entrepreneurs today underscore their willingness and interest to work for the creation of specific, shared, and well defined programs, but aim to do so while maintaining independence and autonomy in the management of their business and sizes in every economic sector. These peculiarities make the collaboration tractable on the inside but extremely solid outwardly. The new model encourages both organizational and productive innovation processes: it is a philosophy that embraces a broader view of economic relations, attempts to overcome the “small is beautiful” belief, and holds that networking is useful and convenient for meeting the challenges of the market and improving a business’ economic performance. In fact, very often businesses that are too small or under-resourced cannot manage to enter or successfully remain in the international markets. It is precisely in this difficult period of stagnation in domestic consumption that internationalization has emerged as one of the goals most often invoked by an overview of the network programs: 78 of those who signed have declared their objective to be the development of internationalization projects to intercept new business opportunities across borders. Among the most interesting initiatives reported in this issue are the cases of Five for foundry, the first network of international scope including French, Polish, and Czech companies, and the case of the Italian Technology Center network contract, whose objective is to 054

penetrate the Indian market. In a context of growing scarcity of resources, the network acquires a strength and dimension capable of showing its interlocutors growth and reliability. In this sense, public banks and institutions can evaluate the advisability of allocating financing also through the assessment of the validity of the entrepreneurial projects presented in the network. The so-called network rating can be decisive and even exceed that of the individual company. The network cannot be the only solution to the crisis, the panacea for our businesses, but it should definitely be an instrument of industrial policy made available to the system for best dealing with an unfavorable period and time of changes in the relations between the territory and the economy. It is a tool that Confindustria and our company has believed in and supported right from the start. Likewise, the government has enacted a significant measure to support networking companies: the suspension of taxes for the portion of income for the year that the individual companies allocate to the realization of the investments planned by the network program. The amount of the tax benefit provided by the State was 48 million euros for the three-year period of 2010-

2012; we consider this benefit indispensable and are working to ensure that the amount is increased to 100 million euros for the next three-year period. The contributions of the institutions is important: there are more and more tenders promoted by the Regions, Provinces, Cities, or local Chambers of Commerce to grant financial aid in favor of business networks and the MIUR has also set up a competition for the development and expansion of the National Technology Clusters. Important measures were included in the Decrease Decree for the networks of the tourism sector. One of the conditions to qualify for the tax relief is the precautionary asseveration of the network program carried out by authorized and recognized bodies. For this reason, in June 2011, RetImpresa created the company RetInsieme srl, the asseveration body that, in two rounds, has certified 68 network contracts. In addition, the networks have favorably come to the attention of the EU institutions: just recently there has been an important acknowledgement by the European Commission, which included an entire chapter on clusters and networks in its European Competitiveness Report 2012, recognizing their positive role in reaching critical mass, exchanging information,

businesses that think in networks |

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RETIMPRESA Founded in October 2009, this agency of Confindustria for the aggregation of businesses includes territorial associations, regional industrial confederations, and national associations and federations of industry for a total of about 70 members, supported and sensitized to the network contract. (www.retimpresa.it)

and expanding the industrial capacity of businesses. In recent months, the European Investment Bank (EIB) has also activated support for the networks, establishing a 100 million euros ceiling. Consequently, we have had frequent contacts with the Office of the Commissioner Antonio Tajani to allow the networks to access the structural funds and various funding of the next EU plan for 2014-2020. In recent years, we have embraced all the aspects of Business Networking: promoting studies and research in the academic world, collaborating with business associations, and creating important synergies with the banking system to have better access to credit for networking businesses. All this in order to try to reach the goal, established at the beginning of this Presidency with Giorgio Squinzi, of 2,000 network contracts by 2016. Together with Unioncamere, the Italian union of chambers of commerce, and the Bruno Visentini Foundation, we have been promoting “The network laboratory” for the development of studies and analyses on network contracts, and in March, together with the TriVeneto Inter-Regional Committee of the Notarial Councils, we presented the “Guidelines for the network contract,” a tool for professionals and en-

trepreneurs to find useful, practical instructions for the preparation of the network contract. For companies, credit is still the real obstacle to the activity of growth-oriented business: that is why we are working to instill the concept of “rewarding” the networking businesses and therefore ensuring better conditions and specific financial products. For now, we have stipulated agreements with Unicredit Bank and the BNL and just a few days ago, initi-

The network cannot be the only solution to the crisis, but should be an instrument of industrial policy made available to the system for best dealing with an unfavorable period and time of changes ated a collaboration with the Carige Bank. There have been many achievements to date and they represent a major step forward, but our action must continue in order to make the network contract even more structural and authoritative. We have dedicated atten-

tion and commitment in order for business networks to be included in the forms of aggregation admitted to the participation in competitive bids. We believe it is possible and our meeting with the Authority for the Supervision of Public Contracts was an occasion that provided new information that will hopefully find applications in the simplification measures currently under discussion. The latest initiatives underway regard job training and work: the “School-Business Network” project, that aims to monitor the synergies existing at the national level and those that are under construction, was presented on November 23rd in Verona as part of the fair “Job&Orienta.” The initiative WIN (Work In Network), a tool of active policy for work, is a project that has been established for the management of human resources within the network, for facilitating the use of labor and with positive effects on employment and, hence, on growth. There is no doubt that the networks are now a reality and a viable alternative involving the economic panorama, nationally and beyond; by joining forces and starting to work with larger and more stable companies, small businesses, too, may be able to grow and deal with the crisis as a constructive change and, thus, emerge strengthened. 055

scenarios

A NEW ECONOMIC RENAISSANCE THAT COMES FROM SMES by Andrea Di Benedetto and Luca Iaia

About 18% of Italian exports comes from the artisan world. 50% of the SMEs. A rebalancing is happening in favor of the smaller companies that have been able to protect very vertical slices of the market, a reorganization of the geographic markets for the benefit of the emerging economies, especially Asian ones, that have always lived in admiration of Italy and the quality of our craftsmanship.

“The effective use of knowledge required not only the ability and incentives to create or have access to a new technology, but also the expertise to use them and to perform the instructions contained in the ‘blueprint.’ Much of the knowledge applied by craftsmen and engineers was ‘silent,’ in that it was not formally described in the ‘recipe’ used for the production, but was the result of shrewdness and know-how based on experience or imitation.” (Joel Mokyr)

“The error that the economic system is paying is that of being based on a short-term vision and the model of organizational flexibility, instability, and speed in adapting to change. This was so also in the management of human capital. Not much was invested on knowledge and in recent years workers have been able to acquire only an incomplete experience. The craftsman model of the past teaches us one important thing: the sense of time. It took years to become a master in the olden days. The workshop today is a small business, which is why it should be supported as a model and should be placed in a position to invest in people. Today growth helps more than flexibility.” (Richard Sennett)

Writings from two very different eras. Both of them, however, point out the existence of an invisible capital that is missing from the company balance sheet, which is composed of the know-how and experience of the people who work there. This capital is even more significant in percentage terms when the company is industrialized and has deeply formalized processes. Joel Mokyr identified the widespread availability of highly specialized skills as a key factor that could sustain the innovation of the English industrial revolution; in our day, Richard Sennett identifies the model of the small business as the only one able to invest in knowledge in the long term, ensuring a cultivation of skills and a rapid

infusion of new forms of communication. Our countryâ&#x20AC;&#x2122;s levels of spending on research and development in the private sector are undoubtedly lower than the European average and less than half of the average of France and Germany. The blame for these numbers normally goes to the fragmented system of the small company with little diffusion that is unable to invest in research and development. However, we are convinced that this is a problem of measurement: it is clear that if the rate of R&D is evaluated by the number of patents or the â&#x20AC;&#x153;taxâ&#x20AC;? capitalization of investments in research, most innovation produced by small businesses is transparent, because it is fragmented and incorporated into 057

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the production function. Small companies are constantly forming their employees (sometimes only one) in the art of work and attention to detail, conveying history, traditions, and cultural know-how. The production processes are optimized for the successive steps, efficiency is improved regularly, the products are modified to always follow the needs of the market. Knowledge and innovation, sure enough. So what does this sector need to boost growth? A document of the Ministry of Economic Development (DG SMEs and cooperative bodies – Div VIII) describes the artisan world as “a sector of the Italian economy of unfinished modernity, in the sense that it has not shown a clear evolutionary path toward an entrepreneurial dimension, which today is a winner in the market. As a matter of fact, the modern enterprise has the ability to control the domestic and foreign competition, to operate on a global scale, to exploit the potential of ICT, and to have highly innovative production techniques.” Thus: entrepreneurship, digitization, technology transfer. A culture of entrepreneurship is lacking; there is a strong need to connect schools to the business world. There are many experiences, also successful ones, for transforming research into start-ups, and to initiate young talents into 058

the work world. But in our training, there is still no transversal education in business: this is missing in the DNA of a nation with a manufacturing vocation which based its foundation on manual skills and quality of production, and on the awareness of the scientific nature of doing business. It is therefore neces- The challenge we are faced sary to be able to innovate with is to bring the small educational processes and interact with educational business and craftsmanship institutions at all levels: to a finished modernity, the change we need will and it is a challenge for be possible only through a greater involvement of the the nation. The growth younger generation and a potential of the sector is massive injection of “digi- likely to be perhaps the only tal” and managerial skills. About 18% of Italian ex- chance we have to restart ports comes from the arti- our economy. san world. 50% of the SMEs. A new Renaissance And the trends that show a democratization of the internationalization are reassuring from both the commercial and production standpoint, thanks to the lowering of costs and the reduction in the number of intermediaries needed, mainly be-

a new economic renaissance that comes from smes

| oxygen

A culture of entrepreneurship is lacking; there is a strong need to connect schools to the business world. There are many experiences, also successful ones, for transforming research into start-ups, and to initiate young talents into the work world. But in our training, there is still no transversal education in business cause of the Internet. A rebalancing is happening in favor of the smaller companies that have been able to protect very vertical slices of the market, a reorganization of the geographic markets for the benefit of the emerging economies, especially Asian ones, that have always lived in admiration of Italy and the quality of our craftsmanship. Finally, there is a phenomenon of increasing interest from the international demand for Made in Italy products/services â&#x20AC;&#x201C; even lesser known brands but which are rich in craftsmanship, history, and culture. And last but not least, the small business has a big gap in the awareness of its potential and appeal for new talent: it has always played a central role in our economy, but not in our collective imagination. In fact, it is not enough to produce a huge percentage of the GDP and represent the majority of the business scene: cinema, literature, and the media have always stressed an industrial Italy of the Sixties, the time of the economic boom driven by state-owned industries. There was a lack of communication skills and attention on the part of all the media, which disregarded a vital part of the country. The attention to beauty, history, and culture has always been there: however, the ways and means to recount them have changed.

The combination of so many winning stories can create an epic for a production world that is coming into being: this could be the key to an economic revival that is based on culture, territory, and businesses considered as â&#x20AC;&#x153;knowledge processors,â&#x20AC;? i.e., capable of translating knowledge into economy. The global challenge from the point of view of productivity will be played on the ability to manage complexity: efficient models of interaction among the distributed production systems, a rethinking of the supply chains to make them shorter and more effective, to redraw districts not in terms of geography, and to combine profit with the development of the area, the traditions, and Italian history. Cultural industry, Made in Italy, and companies will have to interact on increasingly international platforms that are attentive to the quality of the products and services offered. All accompanied by modern technologies and services resulting from a massive digitization of businesses and the public administration. The challenge we are faced with is to bring the small business and craftsmanship to a finished modernity, and it is a challenge for the nation. The growth potential of the sector is likely to be perhaps the only chance we have to restart our economy. A new Renaissance. 059

contexts

Our “know-how” will save us: 10 success stories by Daniela Mecenate

The hands of Italian craftsmen and their brilliant and imaginative minds work international miracles. And Made in Italy products can boast numerous examples of virtuous artisan companies that, with hats, sunglasses, bicycles, and printers, are delivering the message all over the world.

The future? It is in our hands. Literally. In fact, crisis or no crisis, our “knowhow” will save us: this is the motto of thousands of manufacturing companies that make up the Italian entrepreneurial fabric, where craftsmen and “manufacturers” of all kinds keep the ship on an even keel. Carpenters, tailors, bakers, jewelers, and milliners. Chair-makers, potters, carpenters, and brewers. Who found companies, small or large and family-run or an international business. But always with an indispensable foundation: the tradition and the ability to keep the arts and knowledge alive forever. And with one element more, namely innovation: the “knowhow” combined with technology, tradition which is attached to contemporary opportunities, able hands together with a digital mind. “This is our fuel,” explains Stefano Micelli, a professor at the University Ca’ Foscari of Venice and author of the book Futuro Artigiano (Future Craftsman), “both for the small business and for the large company. These

days, even the large ones cannot do without customization, or ‘tailor-made’ production, and they are rediscovering the importance of the craft with respect to the assembly line. Today, the small artisan company is no longer in conflict with the large companies and the industrial sector, instead it is their inspiration and a valuable addition. We can compete on international markets and run against those who make serial products, such as Germany, only by focusing on our crafts and playing the card of innovation.” And not surprisingly, even in these times of crisis, the exporting of Italian manufacturing is thriving more than any other sector: over 52% of companies have increased (albeit slightly) their international presence and exports grew the most among firms that have been less exposed abroad until now. So the global market, rendered more selective by the economic downturn, is looking for our manufacturing: from that of the international giants to the products of tiny artisan companies.

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01 NATUZZI

In the beginning, it was an artisan workshop in Taranto that had only three employees. More than 50 years later, it now has more than 6,000 employees and is listed on Wall Street. And Natuzzi, the world leader in the production of leather sofas, is a beacon for companies in the south of Italy: from Puglia with love. Pasquale Natuzzi, who at the age of 19 began making armchairs and sofas for the local market, has come a long way and is now present in 143 countries with 11 plants worldwide, but he has always been linked to Puglia and to its plant near Bari, where he moved in ‘72. But above all, he has never stopped believing in the power of hands, the “know-how” of the hundreds of artisans who work in his laboratories. The international markets have welcomed him ever since that time, in 1980, when he was able to sell leather sofas to the Macy’s department store chain at a price which was one third the average cost in the United States. Arousing the envy of competitors and the admiration of American marketing gurus. So today, while manufacturing is at home especially in Veneto or Tuscany, this man from the “heel” of the peninsula looks at markets around the world with the pride of the old craftsman who knew how to dare and had to innovate. Without ever losing hope, even when his laboratory caught fire in 1973 and he had to start over. “I moved to Santeramo in Colle, where we still are,” he says, “and I rolled up my sleeves and started from scratch.”

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02 KENTSTRAPPER To give real shape to a drawing. To toss off a sketch, see it become a real object, and watch it come out of a real three-dimensional printer. A vase? A colorful box, a lamp, a pair of glasses? You design it and then just click to create it, touch it, and put it on the desk. All this is possible with Kentstrapper 3D printers, a family-owned company in Florence that was founded just a year ago, right in the midst of the booming economic crisis. The name is a bit German, but the soul and imagination are entirely Italian. “There are several models of these printers, that we make practically one by one,” explains Lorenzo Cantini, “although the plastic components can be replicated. A software program converts a drawing into

a three-dimensional language that is interpreted by these printers of ours which, thanks to the application of layers of plastic and other materials, are able to actualize the design. Initially, we thought we would sell these machines to companies; instead, it is mostly private individuals who buy them. Also because the basic model costs very little and can be purchased by artisans to make their objects. We have noticed that many schools, especially abroad, are buying our printers to give shape to models and drawings created by their students.” A way to free your imagination and make an idea become reality, and to overcome obstacles hindering a person’s imagination. The freedom to imagine has the Made in Italy label.

Who doesn’t know of Nutella, Ferrero Rocher, Kinder chocolate bars and Tic Tac breath mints? They are produced by a global giant, the Ferrero company of Alba. The basic ingredients were a small pastry shop opened by Pietro Ferrero and his wife in 1942 and a great desire to invent, experiment, and create goodies without ever giving up. Such as during the war, when the proper ingredients for a chocolate-maker’s delicacies were no longer available and Pietro had the idea of resorting to a poor material that was readily found on the trees in the area, without knowing that it would bring him good luck: hazelnuts. Since then, the Ferrero laboratories have never stopped, and by dint of experience, after all that mixing and grinding of hazelnuts, in 1964 he came up with the worldwide queen of the edible creams: Nutella. Which was welcomed also by the last G8 world leaders, when large portions of bread and Nutella were served on a silver platter at breakfast. Even today, the heirs of Pietro Ferrero are working unceasingly. Thanks to the work of hundreds of “master pastry makers” mixing and stirring, along came the snacks, the various EstaThé teas, and the Kinder eggs. “Of course it was a long time ago,” they say at the company in Alba, “when the founder, Pietro Ferrero, wanted to expand his market and went around to the neighboring towns with a cart to sell hazelnut chocolates made by his wife. But if we are expanding around the world today, it is thanks to his intuition and his desire to grow.”

our “know-how” will save us: 10 success stories |

05 GRAFICA VENETA

04 ZEGNA Tailor-made. From the buttonholes to the hems, from the finishing touches to the buttons, all the way to the name printed on the labels: everything just as the customer wants it. In the House of Zegna, the artisans are still the protagonists of this company founded in 1910, thanks to an intuition by Ermenegildo, the youngest of a watchmaker’s 10 children, who decided to change direction one day and set up a textile workroom. Even now that the Zegna brand is present in 60 markets worldwide and employs more than 7,000 people, the wool still comes from Australia (it used to be imported on large cargo ships) and the approach remains the same: customization. In fact, the company, which has now become a giant, started the “tailor-

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made” line in 1972: in the Zegna workrooms, measurements are taken, the customer chooses from among 700 fabrics, and the product is made on the basis of their indications. This manufacturing company, the flagship of Made in Italy textiles, is located near Biella in Trivero and has been on the international markets ever since the ‘30s. Today, 80% of its turnover comes from abroad and the expansion into the Chinese market has been essential to the company’s growth, seeing as Zegna acquired a company in China in 2003 that produces quality clothing for the internal market. And even in a downturn phase, the Made in Italy manufacturing giant has not been touched by the crisis and is headed toward a turnover of well over one billion euros.

What is Harry Potter, the world’s most famous boy wizard, doing in Trebaseleghe, a charming town in the province of Padua? Here, the magic has been made by Fabio Franceschi, Managing Director of Grafica Veneta SpA, who has been entrusted with the printing and the production of the books about the magician par excellence. And not only those. Also printed here are the supplements of “Pravda,” the “New York Times,” and “Le Figaro,” and the Brazilian newspaper, “The Globe,” to name just a few. The new owner of Grafica Veneta, whose grandfather and father were printers and bookbinders, has chosen the way of customization and speed; he is able to print any kind of product in 24 hours at his plant in Trebaseleghe and deliver it anywhere in the world, while others take up

to three weeks to do so. Is it magic? “We are not just printers,” explains Fabio Franceschi, “and we have tried to reconcile artisanal experience with the needs of an increasingly demanding market: we are equipped with innovative machines and, if necessary, even print at night to deliver on time.” And all this with an eco-friendly approach: 50,000 square meters of solar panels on the factory’s roof run the machinery and provide the energy needed to produce books and supplements, almost all biodegradable. “We are the only company in the world with zero impact,” says the wizard of Trebaseleghe, who is now preparing another miracle: the debut at the Milan Stock Exchange by March 2013. “The project of the listing is ready,” he confirms, “and the capitalization is expected to be 500 million euros.”

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06 SUPERDUPER To have an idea in mind and turn it into a case of international success. That is what happened to three young people from Florence who, since 2010, have been creating entirely handmade hats and now sell them all over the world, from England to Japan, from Germany to the United States. The company is called SuperDuper (American slang for “fantastic”) and was created for fun and passion by three youngsters who were a far cry from being milliners or tailors. No family traditions this time: the young man is a rock musician, one of the girls is a dancer, and the other, an architect. But it was the fateful encounter in a market with the old forms for making hats and, above all, with a Florentine seamstress who revealed all the secrets of the trade to the three, all enthusiasts of design and headgear. This gave rise to a vintage-trendy line of handmade hats that have appeared in major fashion shows in Milan and Paris, crossed national borders, and conquered the pages of Vogue and Vanity Fair. Crisis or no crisis, their market is constantly growing: “We sell 80% in foreign markets,” they explain, “where, absurd as it may seem, Made in Italy is appreciated more than in Italy.” It takes them about two hours to make a hat, but each piece shows that if you have an idea in your head, and achieve it with passion and quality, it can be fruitful.

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08 ERMES PONTI

07 THE CERAMICS OF SASSUOLO Going back in time, let us take a look at the Duchy of Modena in 1741. This is where the oldest ceramics company in Sassuolo was founded: Marca Corona, where local skilled workers worked the clay and bricks for the dynasty of the Dukes of Este. Today, the ceramics district of Sassuolo is among the leading manufacturing centers in the world, and the companies have names that are renowned as quality brands. From the ceramics companies of Ragno and Cotto d’Este, to the Marazzi Group and the line for the home by Versace. A market worth millions of euros and which maintains a worldwide market share that rivals the Chinese competitors, who produce at low costs on an assembly line. Here, instead, the traditional approach survives

alongside large-scale production and is even being rediscovered as a new asset on which to focus even more in the future. And so the “silky reflections,” “cloudy colors,” the “marbled surfaces,” and everything that the imagination (and the customer) requests, can take shape in this district, where the raw material is still the same as back in the founding days of Marca Corona: the clay of the tributaries of the Po River and the marble of the Apennine foothills. And although the global crisis and competition from China have made their claws felt in recent years, a company spokesman explains, “This does not mean that we aren’t on the right track. Continuity is an ancient tradition; it is our strength and no one can take it away from us.”

“We are contemporary cabinetmakers.” With this strange definition, the Ermes Ponti company summarizes its business: designing and producing high-quality furniture. Something of an architectural firm, a little of a carpentry shop, a bit of a tailor’s shop, and a touch of a construction site. A small company that, on the wings of family tradition (“Grandfather Walter Ponti had been a carpenter ever since ‘37”), has flown from the Lower Valley of the Po River to the other side of the globe. Its furniture is found on the most exclusive yachts in the world, in the boutiques of Tokyo and Dubai, in Montblanc showrooms, in Bloomingdales department stores in New York, and in the Quirinale Palace in Rome. And even in the richest apartments in Paris, Moscow, and Shanghai, and the princely villas of Porto Cervo. All this thanks to the adoption of what they themselves call the “Ponti method:” “We listen to the customer’s idea, then we design and create it in the same place, i.e., in our laboratory. Thus, we adopt a method of coordinated production and nothing escapes us, from the design to the construction. Our large laboratory is shared by weavers, cabinetmakers, joiners, and carpenters, so we are truly the couture of furnishings.”

our “know-how” will save us: 10 success stories |

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09 ITALIA VELOCE

Their motto is: Italian Pride. A pride that runs on two wheels and pedals throughout Italy with a precise aim in mind: the United States and then even further, as far as Japan and Australia. It will be a long run for the company Italia Veloce (Fast Italy) – Italian Workshop of Prestigious Cycles, founded in 2010 by four classmates from Parma. Fans of bicycling, of course, but also of design, the four took over an old workshop and gave it new life. This is how these hand-made bicycles came into being, with a ‘50s look but using contemporary technology and literally “made to measure:” starting from the stature of the client, all the rest is then developed. Clients can choose – even online – the colors and frame models, the seat and the wheels. There is just one constant: the

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“arrow” shape of the handlebar, now a distinguishing feature. And like an arrow, the business, too, has soared upward, seeing as how in 2011, it already ended up with a turnover of 500,000 euros. “We’re also making something that is a high-end niche product, dedicated to those who love the environment, art, and design: many even choose our bikes as pieces of furniture,” says one of the four, Massimiliano Rabaglia, the marketing director. “But we are investing to land in the United States next year with specific distributors. And that is only the first step.” Meanwhile, there is unceasing research in the field of urban mobility, which has already produced a special result: the lightweight folding bike for yachts. A treat for the few, another push of the pedals into the future.

Today, the small artisan company is no longer in conflict with the large companies and the industrial sector, instead it is their inspiration and a valuable addition

An encounter: wood with aluminum, nature with technology. This is how the most detailed and eco-friendly glasses in the world came into being, those of the W-Eye, a family business which manufactures super-lightweight wooden glasses (10 grams), that are super ecological and super glamorous. The idea was the brainchild of a carpenter, or better yet, a chair-maker, who grew up around the lathe in his father’s workshop. Twisting the wood, giving it pleasant shapes and curves, making it flexible and adaptable: this was the challenge for Doriamo Mattellone: since 2001, at his company in Udine, he has been making frames one by one from 5 mm sheets of wood, combining them with thin layers of aluminum using a novel technique. The decisive encounter was with the designer Matteo Ragni, who gave an attractive style to the work of the chair-maker turned glasses artist from Udine. Result: for more than a decade, this entrepreneur from the Friuli region, thanks to his glasses, has been looking into the distance and seeing growing orders and requests which are also coming from the other side of the world by now. A Made in Italy success which confirms the vitality of Italian manufacturing firms when vision, innovation and “know-how” are combined wisely.

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interview

A sound business in a healthy body interview with Nerio Alessandri, by Pino Buongiorno

Like Steve Jobs, Nerio Alessandri, too, began his entrepreneurial career in a garage. He was only 22 years old and had a degree as an expert mechanic, great enthusiasm for sports, a passion for design, and the skills of a designer when, in 1983, he first began to invent equipment for gyms in the garage of his home in Cesena. This is how Technogym came into being; today, it is a world leader with 2,200 employees working in 14 subsidiaries in Europe, the USA, Asia, the Middle East, Australia, and South America. Every day, 35 million people around the world use Technogym products, 91% of which is exported to more than 100 countries. The company has equipped 65,000 sports centers and more than 100,000 homes. Chosen as the “official supplier” of five Olympic Games and used by the most prestigious sports clubs for the preparation of their athletes (Juventus, Milan, Inter, Real Madrid, and Chelsea, in soccer; Ferrari in Formula 1 racing; Alinghi in sailing; and many others), Technogym has also inaugurated an original philosophy: wellness that goes beyond the American concept of fitness, which is all muscle and physical appearance. “It is a lifestyle oriented to improving the quality of life through regular physical activity, healthy diet, and a positive mental attitude. It allows us to be comfortable with ourselves and with others, to have more energy at

work, and above all, to live better and longer,” says Alessandri who, in 2001, became the youngest person in the history of Italy to be awarded the Order of Merit for Labor and subsequently received two honorary degrees, in physical education and biomedical engineering. “It is a profoundly Italian project that has its roots in mens sana in corpore sano [a sound mind in a healthy body], coined 2,000 years ago in ancient Rome.” Recently, in the midst of the economic crisis, the company opened Technogym Village in the presence of the President of the Republic, Giorgio Napolitano, and the former President

Italy can play a leading role in this field and become the first wellness manufacturer in the world of the United States, Bill Clinton, who has made the fight against childhood obesity the banner of his Foundation. This is the new headquarters of Technogym, which comprises the research and innovation center, manufacturing plants, and a large wellness center dedicated to physical activity, interior design, and the culture of wellness. The complex covers an area of 150,000

square meters, 60,000 of which are covered, and is the first example worldwide of a wellness campus where employees, customers, suppliers, and international guests can make a true experience of well-being happen. The ambitious project has been integrated into the “Romagna-Wellness Valley” initiative, sponsored by Alessandri’s Wellness Foundation, founded in 2003, which aims to make Romagna the first district of wellness in Europe, a laboratory of experiences to enhance the opportunities for economic development. “Man was born to move,” says Alessandri, whose parents were farmers turned workers, and who is married, has two children, and owns an Audi but not a private plane. “Our ancestors walked and ran 30 kilometers a day, a half marathon daily, hunting to collect food for the community. These days, our daily movement is far less, an average of one kilometer. A sedentary lifestyle triggers a social emergency: an epidemic of sedentary living reaps victims and makes us sick. Not for nothing, chronic diseases caused by bad lifestyles such as physical inactivity, unhealthy eating, drinking alcohol, and smoking are the leading cause of death worldwide and generate more than 35 million premature deaths per year. In 2006, for the first time in human history, the number of overweight people exceeded the number of the undernourished. The

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obesity epidemic not only affects the so-called most advanced countries, but also the poorest ones. The economic crisis is making the situation worse by increasing the consumption of junk food, especially among the young.” Alessandri is horrified by this data, which – he adds – combined with the continued aging of the population and the increasing difficulty of governments to finance public health, clearly indicates only one way out. “The antidote to combat this epidemic of the 21st century is movement education, which can reduce the risk of contracting many diseases by up to 40%. Authoritative international medical research has shown that a 10% decrease of vascular disease in a country corresponds to an increase of one percentage point of their GDP. That is why, already back in 2003, we launched the message ‘Health is Wealth.’ Wellness, that futuristic idea launched 20 years ago by a small company from the Italian provinces, is a major international trend today.” Garages bring good luck, especially if, like the co-founder of Apple, you have a great desire to get into the game, even against the advice of your mother: “Ever since I was a student, I wanted to be an entrepreneur at all costs. I wasn’t interested in a permanent position or job security. Every day I looked around and tried to find the right idea to begin with. Little by little, I came up with the start-up (which wasn’t called that at the time) that could combine my passion for mechanics (techno) and sports (gym). In Italy, the sector did not exist. It did in America though, but I only found out about it a year and a half later from a friend who lived there and is now by my side. At the age of 24, I left for a long trip to the U.S. to see what was being produced over there.” Alessandri returned home with many new concepts, and above all, with the idea of going beyond hedonism to focus on individual and collective wellness instead. Just two years ago, the word “wellness” was admitted into the English dictionary. Here is the first lesson endorsed by the industrialist from Romagna. “I knew then, and it has been confirmed for me every day, that the winning frontier of the future is creativity. I am increasingly convinced, as the masters of the Renaissance have taught us, that man will return to being at the center and this will make the real difference. That is why there can be no sustainable economic development in the future without the good health of the 068

people. If you are in wellness, creativity is much higher. Companies will produce more because their employees will be happier, smiling, and they will sleep at night and be more inventive the next day.” At the World Economic Forum in Davos, Alessandri was one of the promoters of the Wellness Alliance, which brings together businesses from around the world that believe in this philosophy. From there, a Manifesto was developed with guidelines on lifestyle, health, and prevention that Davos delivered to the UN through the World Health Organization. Cesena has become the cradle of the so-called Wellness Economy which, according Alessandri, will replace the Green Economy. “Italy can play a leading role in this field and become the first wellness manufacturer in the world using our DNA system, now renowned around the world: design, diet, artistic patrimony, and tourism.” Alessandri, who considers himself a social entrepreneur like the legendary Adriano Olivetti, has always believed in the product that acts as if it

35 MILLION The number of people who use Technogym products

TECHNOGYM VILLAGE The first wellness campus in the world (in Cesena) covers a surface area of 150,000 m2

2,200 EMPLOYEES Working to distribute products in 65,000 sport centers and 100,000 homes

a sound business in a healthy body

My concept of the entrepreneur has an artistic approach. Let me explain. The craftsman uses his head and hands when making a product. The entrepreneur goes further and adds the heart to the head and hands

were a work of art. “My concept of the entrepreneur has an artistic approach. Let me explain. The craftsman uses his head and hands when making a product. The entrepreneur goes further and adds the heart to the head and hands. That is how you achieve companies with a strong identity and a strong link to the community. When I had the idea of making Romagna become Wellness Valley, everyone thought I was crazy. Today it is the pride of Romagna. Administrators, businesses, schools, and universities all identify with this project. At the exit for Cesena, you can see ‘Wellness Valley’ written perfectly clearly.” A great world traveler, the founder of Technogym reflects on the complicated and serious Italian situation, and almost gets angry. “Why are we getting used to mediocrity? Why don’t we react against adversity anymore? The answer that I came up with is that the spirit of excellence, art, and vision is missing. Luckily, there are still entrepreneurs who believe in it, but we all seem like Romantics. Fi-

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nance has taken over. Speculation seems to dominate business. Instead, we must return to our roots, to our values. We must return to being hungry, like we were in the postwar period.” Technogym is not giving up and in the last two years has invested more than ever before in its short history. But with a precise constraint: “I think that a company can be strong and succeed in the world only if it has its roots firmly embedded in the territory.” Alessandri attributes to himself a great credit and a great defect: “The first is that I am super curious. The second is that I am never satisfied. We are a global brand, we invest in R&D and open new factories, for example, in Brazil, but also in Asia. In two, three, or four years, we plan to finally go on the stock exchange. Today, I am the owner of 60% of the company. The most important partner is an English fund.” One last question: seeing as you are forever in search of the Holy Grail, what do you still have in mind? “My latest idea is to transform the Technogym company into a World Heritage Site.” 069

contexts

Ikea: space for Italy by Cecilia Toso

Today, you can find at least one Ikea store in 40 countries around the world, and in each of them you can find at least one Italian kitchen. Because today, Italy, after China and Poland, is the third largest supplier of the Swedish giant.

Suppliers —

To become Ikea suppliers, however, very high standards must be maintained: to pass the tests of efficiency and technology, and to keep prices low

Italy is the third largest supplier worldwide to Ikea. In particular, Ikea buys bedrooms, shelves, bookcases, and kitchens from Italy. So yes, if we buy a “Swedish” kitchen, designed by Swedish designers and built with Swedish pine (and perhaps before leaving the store, we’ll just buy some Swedish herring in dill), when we get home and mount our new kitchen, it may turn out that... it’s Italian, even if we happen to live in China. And it is precisely the kitchen sector that is the most “Italianate:” 34% of those sold by Ikea around the world are produced in Italy. With 338 stores in 40 countries (but many more

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projects are in the pipeline), it is clear that Ikea has to supply itself with products also coming from outside the borders of Sweden; and to meet the highest quality standards, it is essential within the Ikea brand to include those of other production companies such as Whirlpool and Electrolux, whose appliances complete the Ikea kitchen. But, it was not easy to imagine that Italy is the third largest supplier of Ikea in the world, after China and Poland (which supply Ikea for 22% and 18%, respectively). Instead, in Veneto, Friuli, and Lombardy alone, Ikea buys more than in Sweden or Germany and it purchases a total of 8% of its supplies

from all over Italy. So who are these 24 suppliers, and what do they produce? For sure, we know that 80% of purchases are furniture (kitchens, bedrooms, shelves, bookcases, bathrooms) and 20% furnishings. However, there are some unknowns about who the suppliers are; not everyone likes to see their name associated with that of the multi-national corporation. But Ikea has greatly changed the lives of these Italian companies. The Piedmont-based Paini company, which produces water taps and has 300 employees, had a turnover of 70 million euros in 2011, a 7% increase over the previous year, thanks to its collaboration with the Swedes. And then there are Natuzzi (sofas), Elica (hoods), and Friul Intagli (carvings); the latter is a company in Pordenone that gets more than half of its turnover (180 million euros out of 300) from Ikea, providing furniture kits and components for kitchens, and even actively participating in their design. To become Ikea suppliers, however, very high standards must be maintained: to pass the tests of efficiency and technology, and to keep prices low (on its own products and those of suppliers), prices which, by contract, must be lowered even more over the years. Precisely for this reason, the profit margins are very high and many companies cannot enter the competition. Those who can keep up, however, gain in production volume, longterm contracts, and brand value. And Italy gains in the job market, too: 11,000 workers are involved, if you add up the 2,500 supply companies also involved in the sales network. The natural question at this point is: why Italy? Lars Petersson, CEO of Ikea in

Italy, says that, to them, Italy is a great country to invest in. They have found quality production, great skills, and expertise, as well as a smaller number of complaints. But there is also flexibility, because the companies do not hesitate at a change of plans: if the project undergoes changes, the Italian producers meet the new demands. Not to mention the fact that being in constant worldwide competition in order to confirm themselves as Ikea suppliers encourages them to keep up the high quality and service. Finally, there are environmental issues: obtaining supplies from Italy instead of China is more convenient in terms of the carbon footprint. So, for example, Ikea is moving some of its suppliers from Asia to Piedmont, where it especially buys faucets, cabinets, and toys. In the relationship between Ikea and Italy, there is a difference concerning the world of sales, where our country is in fourth place behind Germany, the United States, and France, and the friction is being felt. Ikea buys from Italy for 8 but sells for only 7 and for the first time since 1989, this year there has been a 2.6% drop in turnover (to staunch this, it has decided to open up to ecommerce). And according to Petersson, the economic crisis is certainly not helped by the long battles that are being fought in Italy to open new stores: the time required by the politics and bureaucracy has led Ikea to cancel projects after waiting for years for a reply from the local authorities, as was the case in Vecchiano (Pisa), for example. Hence, Italy as a resource and a country of challenge, where Ikea is thinking of investing 400 million euros over the next three years.

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interview

FEAR OF THE FUTURE? IT IS SOMETHING WE CAN NO LONGER AFFORD interview with Edoardo Nesi, by Armando Buonaiuto

A writer who has led a textile company for years, and who doesn’t experience the factory as an alienating reality, talks about the future and trust. And optimistically describes a country rich with youth and potential.

“A cursed ninety-eight pound Cassandra,” as Edoardo Nesi calls himself in Storia della mia gente (History of my people), the book that won the Premio Strega award in 2011. An interpreter and narrator of the economic meltdown that was to stalemate the textile district of Prato and the entire nation, Nesi has returned to writing about the Italian reality in Le nostre vite senza ieri (Our lives without yesterday) and is still looking ahead, concerned about the generation of kids who will revive our fortunes by taking on tomorrow with the weapons of courage, passion, and creativity. “Because fear of the future,” he says, “is something we can no longer afford.”

Our lives without yesterday is “framed” by the presence of your children. At the beginning, your daughter, who is beside you as she reminisces about the past after being reminded by a smell. At the end, your son, who reminds you of how enjoyable the present is, leads you to say with relief: “Let’s talk about the future.” How do you teach young people not to be afraid of what awaits them? I wrote this book specifically with the hope of being able to speak to young people, that is, doing what all too often is not done. Whenever the political and economic powers that be speak out, they aren’t able to translate the outlines of the current situation into something that

can actually help our children. I find this tendency rather inexplicable, so I thought that I, too, needed to try to describe what is happening around us. It makes me very sad to think that our children are condemned to living in a present that is worse than what I experienced. And I don’t believe it is just a matter of money. Rather, it is a matter of hope, because I – and many others like me – had great hopes for my future, and it was legitimate that I felt them. Instead, today, if you speak of hope, you are considered to be incurably deluded. So, in order to restore value to this word, perhaps we should start with trust, by giving it to our children even before they might deserve it.

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«We need to have new ideas and new companies that can use globalization instead of suffering under it. It will take a pact between the generations and it will take years, but it will work. Because if our trust in young people doesn’t work, then it would mean that we really are finished, and that we deserved it» Is there really a lack of willingness and energy in the younger generations, as is said so often? I strongly disagree with the conventional wisdom that makes young people out to be disengaged, anesthetized by consumption, or any less willing to make sacrifices and take their lives into their hands than their fathers and their mothers were. I think it is a very cruel falsehood, one that does not quite tally with the facts. And here we return to a sense of hope: in the Seventies, we lived in an age when being young was an advantage, because each of us would have been able to make our lives an unpredictable adventure in the making. To preserve the idea that the son of a laborer can dream and create a different life for himself seems to me to be among the most important things that a government should do for its citizens. In this regard, how much does an intuition of the new count for the aspiring entrepreneurs of tomorrow? It is essential. The mechanism of replacement and innovation needs to

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be reactivated, which does not mean just innovating what is already there, but literally creating the new, whether it be ideas or products. And we must also begin to see networking not only as a means to exchange knowledge or to have fun, but as an extraordinary commercial weapon that can offer improved work tools. The traditional idea of business that our fathers had is now outdated, and we now have the ability to sell in a new way, through channels that were once unimaginable. Remaining ideally linked to the past means dragging weight with you that does not help. It is not the physical infrastructures that are lacking, but those things that are intangible – and digital. Entrepreneurially speaking, does the idea of Italy as the home of the “good life” still make sense? It is perhaps the only thing that still has great validity. What Italy can boast of today is the glory of a nation of beauty, a place where craftsmanship is inspired by art and enters into our lives. This is an idea that has its roots in the Renais-

sance of Lorenzo de’ Medici, and which some of our best brands continue to pursue. We are still famous throughout the world as the place where one lives a better life and we must not squander this extraordinary weapon. Many of the products that Italy sells abroad arise from their connection with its true culture. Even in times like these, when you manage to have a market selling clothes that cost 2,000 euros, it means an ideal is embodied in those clothes that makes them special. It means that those who choose to purchase them even when they have a thousand alternatives in every price range, are making an investment in something that marks the difference from the simple need to buy a garment. To understand this mechanism, just think of the street vendors at the Piazza dei Miracoli in Pisa selling junk souvenirs and T-shirts they never would be able to sell if, coincidentally, their stalls were not right next to the Tower of Pisa. So, is that or isn’t that income deriving from culture? It is often said that culture can’t be eaten. Maybe it is time to try to reverse that principle.

fear of the future? it is something we can no longer afford

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«We do not need bigger companies, but newer ones. And new entrepreneurs. We must look among the worthy girls and boys, whom not even the cuts to our poor put-upon schools and universities have managed to discourage» If culture and work are so closely linked in Italy, why have intellectuals and writers generally shown so little interest in the business world? I think that responsibility is also attributable to a certain ideology that has long prevented us from making any distinction, which I consider quite straightforward, between the condition of those who are employed in a large or very large industry and those who work in a small or medium-sized business enterprise, where the conflict between owner and laborer is normally far less. Literature has often presented working in a factory as a sort of eternal damnation, and the factory itself as the place for the exploitation of one person over another. In Il padrone (The master) by Goffredo Parise, the owner is a crazy reactionary while the employee is a poor victim, overwhelmed by the madness of power. These perspectives have meant that, for a long time, we could not talk about business without having to tell the story of the exploited worker. Instead, during those very years Parise wrote about, the true Italian miracle was achieved and created the condi-

tions for many people to become entrepreneurs thanks to their desire to do things and their initiative. These stories didn’t only happen in my city but also in many Italian provinces and are emblematic of the extraordinary social equalizer the economic boom represented. In conclusion, I would like to go back to Le nostre vite senza ieri where, faced with a less than rosy situation always in the background, you explicitly state, “I am an optimist.” What drives this optimism? I wanted to call myself that so I would remind myself of the optimism of volition, to make an effort not to be absorbed by the pessimism that I see around me and which I reluctantly recognize as justified. In fact, I sometimes get the impression that if things are so bad, it must be because someone is deliberately making an effort for it to be so. Yet, I am confident in the possibility of change that will be capable of surprising us. I truly believe that something will change, and for this to happen we must think first and foremost about creating jobs for young

people, because a nation incapable of giving space to the ideas of its young people cannot go anywhere. And then, it is unthinkable that this world should be governed by people in their seventies. Beyond the desire to “scrap,” a verb that is very much in vogue today, I think it is absolutely necessary to take note of what is happening and find the courage to innovate. I trust, often without motivation, in the idea that we’ll manage to get out of this swamp together, and that we can “talk about the future” with our children. That is what I wrote in the chapter about the AC Milan soccer match, which concludes the book. That chapter was one of the first I had written and then I inserted it in the middle, but I still wasn’t convinced. Nevertheless, I definitely wanted to put it somewhere because I felt it spoke of an important time of sharing with one’s child, and of teaching. It was my wife who told me one evening that it should be the ending. The entire book speaks about young people, but you also have to tell about how you are with them, to try to accept what they can teach us. Which is a lot.

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data visualization

Workers of the world, specialize! edited by Oxygen

In Italy, with a current unemployment rate around 10%, it is surprising that companies have difficulty finding 16.3% of the professionals they are looking for. This is the result of a partial incongruity between the preparation of job seekers and what the companies actually need. It is mainly the specialized professions that are lacking: what is needed are smelters, welders, plumbers, and maintainers of machinery; the textile and metallurgical sectors report above-average difficulties. Technicians are needed and the world has become aware of this: in the last two years, the number of students enrolled in vocational institutes has increased at the expense of high schools. At the same time, when the sectors that are hiring the most are tourism and services, industry is looking for its technicians and society is trying to keep up by training them.

DATA SOURCES Unioncamere, Excelsior data; MIUR

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+2%

THE OVERTAKING In 2012, for the first time the number of students at professional or technical schools exceeded those at high schools.

21.2% ARTISANS LACKING

The artisans are the fourth most difficult professional category to find in 2012, ranking after technicians, scientific specialists, and managers.

16.3% THE UNAVAILABLE

Between October and December 2012, it is expected that companies will not find 6.3% of the professionals they are looking for.

1,920 WELDERS AND TINSMITHS

12.46%

These are among the specializations most requested by artisans, but in the fourth quarter of 2012, it is expected that the industry will only find 1,920 of them.

COLLEGE GRADUATES HIRED

In 2011, only 12.46% of all those hired had a university degree, and within the artisan sector, only 3.5%.

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A society that works best, where the needs of the citizens, the environment, and the communities are properly considered, is a society that also benefits from its business

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scenarios

New values for a new industrial revolution by Gianluca Comin

In order to overcome the crisis, the decline in the role of industry be must reversed. And to do that, work needs to done on the cultural level as well as on the structural level. In Italy in particular, it is necessary to rebuild industrial pride by focusing on values such as the individual and the environment. The crisis that has thrown our economy into a recession that is more severe than any others our generations can remember has had at least one merit: it has corrected the simplistic deduction that tended to be drawn from globalization, namely that, due to the differences in the cost of labor and raw materials, our industry or the production of things would move entirely to the emerging countries – China, Brazil, India, and the like – and Europe would have to prosper exclusively on services and finance, on immaterial production. This simplistic prediction is somewhat reminiscent of the one by John Maynard Keynes who, in 1930, theorized that by 2030 we would be living “in a state of abundance, satisfied and finally free to embrace the arts, recreational activities and poetry, having been freed from economic activities such as savings, the accumulation of capital and labor.” Even great economists can make erroneous predictions. And now, after years of financial intoxication, we find ourselves dealing with an European economy that has been greatly weakened, and with the need to strengthen, revitalize, and renew our industrial sectors whose know-how is crucial for defending our competitive factor in order to cope with global competi-

tion. The validity of this diagnosis has also been recognized by the European Commission in its recent communication to the European Parliament entitled A Stronger European Industry for Growth and Economic Recovery,1 which recognizes that to overcome the crisis in a lasting and sustainable manner, Europe must “reverse the decline of the role of its industry in the twenty-first century.” However, the view is not to revive the old industrialization as we knew it – which guaranteed growth to the continent for several decades – but to enter into a new industrial horizon based on new companies and new industries; those of the new machines for the production of goods (such as 3D printers); of micro-electronics and nanotechnology; of biotech and new materials; and finally, of sustainable mobility and smart grids. These are growth sectors on which Europe will be able to build its future prosperity through a determined and coordinated effort. And which will surely be carried out through structural reforms, such as reducing bureaucracy, investments in research, and a fiscal framework that encourages productivity and innovation. But the re-industrialization of our continent also involves a cultural aspect that is undoubtedly “softer”

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After years of financial intoxication, we find ourselves dealing with a European economy that has been greatly weakened, and the need to strengthen, revitalize, and renew our industrial sectors

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but no less important: the restoration of pride to industry itself. This is a very significant issue at the European level, but one which is particularly relevant if we look to Italy, which has always founded its growth upon its industrial fabric, from the economic boom onward. The financial excesses of the last fifteen years, followed by the harshness of the crisis, seem not only to have weakened our productivity, but also the proud consciousness of Italian entrepreneurs of their role in society. It seems that the country has forgotten that its well-being has been built precisely on the courage and ambition of a true culture of “doing.” Therefore, on the one hand, entrepreneurs are losing confidence in the future of the country (Istat’s Economic Sentiment Indicator went from 90.4 to 76.6 between October 2009 and October 2012), and on the other hand, Italians are losing their awareness of the role that business can play in building this future and no longer look upon it with the pride that is characteristic of the Germans or the French. This is confirmed by research opinion polls such as those carried out by Demos PI:2 in answer to the question “What aspect makes you proud to be Italian?” today only 8.7%

of Italians answer “our economy and our entrepreneurs.” This is a sharp drop in percentage compared to 2008, when 14.8% of those interviewed responded in this way. But that is not all: in answer to the question “What are the characteristics that distinguish Italians from other people?” only 7.4% responded “our entrepreneurial capacity:” much less than the percentage of those who responded “our attachment to the family” (25.3%), “the art of getting by” (20.4%), and “creativity” (14%). Finally, only 11% of Italians consider businesses as a “social group that will change the country,” while 46% consider it to be the young people and 12% the schools. These numbers reveal a clear need: if our country has to begin again, starting from industry – and thus leaving behind the years in which we talked more about finance and incentives than innovation and investment –, a lot of work will have to be done on the level of our culture and reputation by retrieving the values that underlie industrial pride and improving its perception on the part of public opinion. A recovery that has strong pillars of values on which to build and from which to commence: putting people first, the emphasis on quality, respect for the rules, and social and environmental responsibility. Putting people first is a core value that industry must still be able to make its own if it wants to drive the development of the country. A value that implies the ability to put people at the center of the development of the country and which comes to pass through the optimization of human capital, talent, and safety at work. Then there is quality, that indispensable cornerstone of Italian and European industry; quality that goes hand in hand with passion, creativity, and technological excellence. These are not empty words: the emphasis on quality as a production strategy, but also as an “industrial ideology,” is a radical option that involves the key roles of research, innovation, and even business ethics aimed at the continuous improvement, and the rejection of second best. This is a choice that has already been courageously made in many sectors of our industry, but which must be an immediately recognizable attribute of any product that is made in Italy. Another fundamental value on which to rebuild our industrial pride is respect for the rules. All too often, in the common percep-

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tion, the figure of the entrepreneur is linked with the definition of “evader,” and industry is perceived as being “above the rules.” Yet there are many experiences that demonstrate how industry itself can act as a center for inculcating the value of legality as a means to ensure effective competition on the market: the initiatives of the Confindustria against the Mafia in Sicily, agreements on legality for large companies and government agencies, such as the one signed last May between Enel and the Ministry of the Interior. All of these are efforts to stress that good rules can be an instrument of shared growth, and not an obstacle to development. Finally, a new industry cannot be established unless it has a strong sense of social and environmental responsibility, right from the very start. Especially at a time of crisis, the role of business must go beyond the maximization of profit and be able to create value for the society in which it operates. In this sense, the dimension of the responsibility must be integrated into the heart of the business, going beyond the concept of giving back (or returning part of the profits through philanthropy) and moving toward the ability of the businesses to create value that is shared with the communities in which they operate. Because the society that works best, where the needs of the citizens, the environment, and the communities are properly considered, is the society that also benefits from its business. It is around these values that industrial pride can be re-established in the perception of the country. But it is essential that this new foundation not be reduced to a mere revival of the success stories of our past. On the contrary, a new industrial epic should celebrate the “builders of the future” of our industry, and their already courageously demonstrated adaptability to the great paradigm shift in the global economy, made up of new competitors, new ways of working, and fast and complex decisions. This new industrial epic has to win over the younger generation, which often cannot find within the education system the inspiration that is needed to understand the importance of industry in the reality in which they live: in this sense, industry will have to go into the schools, and the factories will have to open their doors to younger generations. In short, the new industrial revolution must alsobe a revolution in education.

NOTES 1. Communication from the European Commission to the European Parliament, A Stronger European Industry for Growth and Economic Recovery, Brussels, 10.10.2012 COM(2012) 582 final. 2. Sources: Demos & Pi Survey for Intesa Sanpaolo, 2011 (based on 1,044 cases); CambItalia of Demos & Pi Survey for the Republic of Ideas, 2012 (based on 1,300 cases).

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EnelLab On the occasion of its 50th anniversary, Enel promoted its Business Laboratory through a competition for Italian and Spanish start-ups with innovative projects in the energy field; the competition concluded with 215 candidates. The finalists and the winners will be selected in the upcoming months For the first time, a private company is opening its doors to welcome a new generation of businesses and entrepreneurs, and allocating €15 million for the next three years to be made available for those start-ups that are the most innovative and aspire to change the rules of the game of the energy world. The 15 finalists will have the opportunity to present their business and technology directly to Enel’s top management. The six start-up winners will be admitted to a preparatory program that lasts until 2014 and which provides a capital injection and a range of services to accelerate their growth. Thus, he winners will be able to develop their business while enjoying the services and full support of Enel, with the opportunity of turning their innovation into a real success in the sector of clean technologies in the energy field: from energy efficiency to renewables, from smart grids to energy storage, and from automation solutions to low-carbon technologies. lab.enel.com 081

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Manifacturing 2.0 by Alessandra Viola

The professions of workers and manufacturers have definitely entered the 2.0 era. The new “hard work” concerns digital manufacturing, ICT, and related technologies that support innovation, but also robotics and renewables. Oxygen conducted an investigation in these areas, as recounted to us by those who work in them.

“The word ‘crisis,’ written in Chinese, is composed of two characters: one represents danger and the other opportunity,” John Fitzgerald Kennedy liked to repeat, and he certainly knew all about crises, having had to face many of them. Economists and politicians, novelists and polemicists all agree: the times of crisis are crucial phases in the history of a country that could compromise its future but also relaunch it, thanks to sudden changes in the scenario. And in Italy? As we know, the times are not easy here: the labor market is in decline, or at best, stagnating. The traditional manufacturing that has supported the national economy for at least a century is collapsing under the weight of global competition. Yet something is moving underneath the ashes. Work is changing, and not only the areas of avant-garde science and technology, but also those of professional workers and manufacturers have definitely entered the 2.0 era. Hardware components for ITC – Minteos (Turin) Connecting the external environment with the Internet: this is the task of the sensors and networks that record and transmit data. An increasingly important task, as the potential of the Internet is deployed for environmental protection. A wireless sensor can monitor the temperature, gas, the rain, the state of the air or soil, movements, and vibrations. And notify us in real time when something goes wrong. Installing these environmental sentinels is pioneering work but one that is reinvented every time, and which can reveal surprises. “My job is to evaluate the client’s request and prepare a technical proposal explaining what kind of sensors would be needed to meet their needs, at what cost, and depending on what project,”

says Vincenzo Nasso, a twenty-nine-year-old mechatronic engineer who has been working for the Turin company Minteos for three years. “I am also involved in the construction of prototypes and their integration into our network, which collects data and makes it available online.” A seemingly tranquil kind of work, but which may also hold some surprises. Especially since Minteos, a former start-up incubated by the Polytechnic University of Turin, ranges from monitoring the temperature of indoor environments to sensor networks positioned in woods (among others, the Park of Castel Fusano), rivers, mountain slopes, dams, and even sewers (in Athens). “I follow the customer from start to finish,” says Nasso. “This often takes me out of the office and I sometimes even find myself in situations where you need ... a bit of imagination. Like at Castel Fusano, when we installed 1,000 sensors in the pine wood for the project Fireless. We had to put the sensors on the trees, but the pine forest is full of thorns: approaching them was somewhat difficult. Or when we installed sensors in the sewers of Athens to monitor the levels of waste and prevent blockages and flowing into the sea. I believe that my Greek colleagues and I won’t easily forget the 30 gateways [“nodes” that transmit the GPRS signals of the sensors to the outside, Editor’s Note] placed in the sewer chambers. Other installations are simpler, but that does not mean that they are easy: like the one with sensors to monitor debris flows in the province of Bolzano, or the hydrometers that had to be suspended over streambeds in order to monitor them.” From design to hard work, the leap for an engineer who just graduated from the Polytechnic University of Turin can be powerful. “When they

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hired me, I knew I was getting into a company that had a strong environmental profile. Getting out of the office was an idea that was very appealing to me, even though I didn’t really know what to expect. Today, I know that despite the crisis there is great room for growth in this area, and I hope that my future will be to open a spin-off of Minteos. It is a very dynamic company and I think it is the right place for me.” Robotics – Scienzia Machinale (Pisa) In this constantly growing sector, Italy can boast of some world excellence and many university spin-offs and start-ups have been founded by young graduates. Most focus on a single concept (such as robots for biomedical use), but there are also those who have chosen a different philosophy. This is the case of Scienzia Machinale in Navacchio (Pisa), which deals with applied research and designing robotic solutions “tailored” to its customers. It so happens that this group of 56 Tuscan engineers has built things that are very different from one another, ranging from a high-tech espresso coffee machine to the dome of a mosque in Oman, from a gigantic backdrop for a set at Cinecittà film studios to a bionic prosthesis (now applied in large Italian and American hospitals), to the “robot sculptor” that is able to shape the stern of a ship or an aircraft wing out of polyurethane, 084

as well as to perfectly duplicate any statue. And then a radar. And a revolutionary portable unit (the “diaptometro”) that can analyze and measure the resistance of any metal without destroying it, just by perforating a tiny hole on its surface. The company name is a quote from Leonardo da Vinci, who used this term to refer to mechanical engineering and you can’t say that the company is not honoring it. The list of robots built would actually also be very long, but

Being an engineer is like being an artist: artists cannot paint a picture if they do not know the techniques of painting here – and it seems this is the real innovation – the final products count less than the method of work and the relationships between people. “When you are in a close-knit group, where colleagues like each other and work in harmony, you can always come up with something good,” says Renzo Valleggi, an engineer born in 1962 who was one of the founders of the company of which he is now the president, although he still identifies with the (highly specialized) “working class” that composes it. “Every time

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a customer arrives, that is to say a company that makes a specific request, we all have a meeting together. We have 45 graduates who cover every branch of engineering. We begin to reason and to select the right skills for the project, but we also choose according to personal enthusiasm and passion. For example, some people in our company are fervent environmentalists and so it is more likely that they would be put to work on those issues. It is important to work on something that you like and that you are enthusiastic about: this brings an added value to their success. In the end, a group is created of 6-8 people who begin to imagine how to solve the problem that has been brought to us and then it takes us about five months to make the prototype. We are always discussing it: our work is not compartmentalized, rather, we work in an integrated manner. We see it as being the style imposed by mechatronics, the discipline that integrates electronics, software, and mechanics.” Today the Scienzia Machinale group invoices six million euros, but it is far from being “safe” in times of crisis. “The old crafts and the old way of doing business are facing a huge crisis,” continues Valleggi, “and in Tuscany, the situation is even more serious than in other regions, because this is a land where manufacturing was very strong, particularly in the industrial districts such as Pontedera or Santa Croce. I

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come from Castelfiorentino, which was the center known for making blouses. Hundreds of women were employed in their production and it is bleak to go there today and see that not even one of those manufacturers is left. For those companies, which had a very low technological component, it has been almost impossible to withstand global competition. Now only those who want to and know how to innovate, both in their final product and in their way of doing business, manage to stay in business.” It truly seems that ethical enterprise has a tangible value at Scienzia Machinale. “We are what the workers were in the Sixties, we are all in the same boat and if the boat sinks, you go down with it,” continues Valleggi. “There are five partners in all and we pay ourselves a salary which is almost equal to that of the employees. When the crisis was more severe, we all decreased our salaries by 30%. And as soon as the darkest moment passed, everyone recovered their arrears with interest. Growing together is the most important thing for us. There are engineers, technical experts, and a worker who has been with us for twenty years. Each person is indispensable: we do not just have ideas, we also manufacture robots. So whoever has done the design then goes into the machine shop to build it. Being an engineer is like being an artist: artists cannot paint a picture if they do not know the techniques of painting.” 085

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Illumination - iGuzzini Innovation as a lighting scheme. To think of every new product as the creation of a fourth dimension of architecture, the completion of a space and the creation of an object that goes far beyond energy efficiency and light output. This is the mission of iGuzzini that Roberto Pesaola, a mechanical engineer and today, at the age of 42, a design manager, deals with every day. “My work starts with the information that I get from the marketing sector,” says Pesaola, who coordinates three design teams and also the sectors that define the packaging, the instruction sheets, and the electrical wiring. “The specifications of the new project at this phase, among other things, concern the design, the maximum size, the range, and the performance in terms of lighting. Based on this information, I put together a team that begins to develop technical solutions, using a 3D modeling software, computer programs for the optical design, and simulators for the analysis of thermal and mechanical properties. The solutions developed seek to take into account all of the aesthetic and mechanical characteristics and performance obligations, while still trying to meet all the requirements of the market and production logistics. The validation of the technical solutions then passes through of a series of prototypes, necessary for both the aesthetic approval and for performing 086

a series of laboratory tests, including mechanical, thermal, and photometric assessments.” A work that is constantly evolving, and which also requires frequent updating by the engineer who joined the company 14 years ago as a designer and is the protagonist of a “luminous career.” “We are no longer dealing with a defined light source, as it has been for decades. The LEDs have revolutionized the industry by creating new opportunities in terms of performance, energy savings, and market but with a greater degree of design difficulty due to the need for continuous updating: every six months there is an upgrade, a new miniaturization, and new technologies. It is rather complex but challenging: each time it is a new challenge from every point of view.”

Now only those who want to and know how to innovate, both in their final product and in their way of doing business, manage to stay in business

INNOGEST Work in Italy is in full transformation. New businesses and new jobs require new investments. But who supports technology startups in our country? The number of investors can be counted on one hand and the lack of finance and traditional credit instruments sometimes hopelessly hinders young entrepreneurs. “Supporting a young growing company today is not just about providing liquidity and delegating all the work of its development to the entrepreneur,” says Claudio Giuliano, founder and CEO of Innogest Sgr, the largest national venture capital fund dedicated to start-ups, worth over 90 million euros. “On the contrary, when we find a good business idea, not only do we invest money but we help it to take shape and form in order to let it achieve success as quickly and efficiently as possible.” Innogest invests in many different sectors and in particular, in those concerning ICT, biomedicine, and new technologies for ecology and energy. With a very special system. “Our mission is to focus on young Italian high-tech start-ups,” explains Giuliano, “by contributing to their development through an increase in capital. In practice, we do not take over another company or just introduce liquidity; instead, we support the company’s growth by acquiring shares and thus entering within it. The profit for our investors materializes when the company is sold or traded, and we give up our holdings. It takes an average of 4-5 years to get to that point, during which time the initial product is engineered and the company ‘matures.’ With the crisis, the times have become a bit longer and it currently takes almost six years before getting to the exit [the resale of the shares, Editor’s Note]. Selling a company on the market is more difficult today, because there are fewer industrial buyers and the stock market’s appetite worldwide is more limited. With the recovery, however, the time frame will shorten once again.” Right, the recovery. Meanwhile, though, what is happening in the world of Italy’s most promising young entrepreneurs? “The desire

to do business is not dormant and the crisis has indeed stimulated new business initiatives,” assures Giuliano. “The decline of jobs that could be called traditional is pushing more young people to start their own business and entrepreneurial activity.” Founded in 2005, Innogest has not forgotten that it was a start-up itself in recent times, even though today it has 20 subsidiaries and a total investment of 50 million euros. “We work with a material that is made up of two components: the idea, or the product, and the entrepreneur, with his energy, but also his fears,” says Giuliano. “Being entrepreneurs ourselves helps us in deciphering the various dynamics and creating the right relationship.”

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START-UP MENTALITY by Riccardo Luna

“When faced with change, the multi-national giants stumble and fall.” So in order to keep up with the pace of change, the model to follow is that of the start-ups: because they are the basic unit of the cloud economy, are very adaptable to change, and incredibly effective in doing a single thing.

Let’s start with a novel. It is called Makers and was entitled: The Importance of Start-ups in Jobs Creawritten by Cory Doctorow a few years ago. One of tion and Jobs Destruction. The study, limited to the key phrases is: “In the future there will not be the American reality and based entirely on data names like General Motors, General Electric, or from the U.S. Census Bureau, revealed a number General Mills, but new businesses called Local of surprising truths. The first: from 1977 to 2005, Motors, Local Electric, Local Mill.” That sentence the existing businesses were “net job destroyers,” captured the dawning of a phenomenon, which losing a total of a million jobs per year; during the would then have the honor of same period, the new compabeing on the cover of two isnies added three million jobs. sues of “The Economist” and The postulate according to The second truth is even more the subject of various essays on interesting: during periods of which companies the so-called “third industrial recession, the ability of startget bigger with revolution.” That of the makups to create jobs remains conthe passage of time ers, or that is, of personal fabristant, while existing firms are cation and of the factory which highly sensitive to economic inevitably does not is the networking and which cycles and, therefore, more afwork anymore dematerializes to become, at fected by the crisis. The third a minimum, the home PC. truth is the knock-out blow: the But if that is “the future,” what is the future of postulate according to which companies get bigger the big companies, the multi-nationals, and with the passage of time inevitably does not work even the factories themselves? The answer to anymore, seeing as U.S. companies with less than this question requires taking a quick step back. one year of existence create a million jobs, while In 2010, the Kauffman Foundation, one of the those with more than 10 years stop at 300,000. most important players in the global ecosystem The findings of the Kauffman Foundation were of innovation, published a very thorough research naturally an invitation to the U.S. government to re-

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think its policies for economic growth, to pay less attention to the defense of employment in large companies and to favor the creation of start-ups (new companies with a high rate of innovation). Of course, the phenomenon in progress is not limited to the United States, although it is more evident there. The September 2012 issue of the English edition of the monthly magazine “Wired” published an invitation from a leading venture capitalist for everyone to adopt a “start-up mentality:” “The chaos in which we find ourselves is the fundamental reason why one should work for a start-up or a corporation that acts as a start-up. Because start-ups are the natural evolutionary response to this new situation. Most large companies are characterized by the quality of their planning processes, but these become objectives that clash with the reality and the results are measurable. When faced with change, the multi-national giants stumble and fall. In fluid markets, where each asset can be priced and traded easily, start-ups can grow because they are the basic unit of the cloud economy and are very adaptable to change and incredibly effective in doing a single thing. The big corporations are unable to keep up the pace by adapting to the speed needed to remain the best in all aspects of their business. And the same goes for the people who work there, whereas in a start-up business, experience must evolve quickly, and adaptability is the main talent.” All this may seem to be a tombstone for the large companies but it would be a superficial reading of the data and the phenomenon in progress. Because if the future is innovative start-ups, that is exactly what the large companies need to do: go back to being start-ups. Or in the words of the previouslymentioned English edition of “Wired,” “to act like a start-up.” This is not a play on words or a slogan. That is exactly what Steve Jobs said of his Apple: “It is the largest start-up in the world.” And it is the distinctive feature of Facebook, in comparison to the others, according to its founder Mark Zuckerberg: “There are very few of us, we are agile and we are always in beta.” That is, in constant experimentation. No one has explained this mentality better than Reid Hoffman, a star of Silicon Valley, co-founder of LinkedIn, and co-author of the bestseller The Start-up of You. “We are all a work in progress ... Great people, like great companies, are constantly evolving. They are never finished and never fully developed. Every day offers an opportunity to learn more, do more, and grow even more. Being in a state of permanent beta must be a commitment to growth that lasts a lifetime.” Hoffman is speaking of individuals and corporations. But whereas in the first case the things to do are clear, the situation is different for a corporation. There are two ways to “become a start-up” when you have thousands of employees around the world and a necessarily rigid organization: the first – which is actually a shortcut – is to buy start-ups, and then to buy innovations with the people who made them, hoping not only to bring patents into the fold but to also be contaminated by a way of being. The second way is much more complex but gives 090

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We are all a work in progress. Great people, like great companies, are constantly evolving. They are never finished and never fully developed

better results: creating free zones in your organization where there are different rules. Less bureaucracy. Propensity to risk. Profit sharing. For example, as Steve Jobs did when a “team of pirates” created the first Mac while the “Apple company” was focused on Lisa. The executive vice president at that time was a former IBM executive Steve Jobs had hired after meeting him in a bar: Jay Elliot. Here is what he recalls of the work environment of the early days at Apple: “The most obvious thing was the enthusiasm, the desire to do and create. We realized that we were all working together to change the world and that motivated us and made us very proud. The last thing we’d think of would be to take a vacation. Steve Jobs was capable of phoning at three in the morning to tell us that he’d had a great idea. And it didn’t bother anyone at all. Stress was not seen as a negative component, it was something that pulled you in, which caused another sensation, because we realized that we were about to cross a new frontier. Apple was not the typical company where you had to arrive at 9 a.m. and you left at 5 p.m. We worked until late. Maybe you’d come to the office at noon, but then we’d

work until 3 in the morning. We were all involved in the creation and development of the products. After all, Apple was the company with the lowest number of people who went off in search of a better place, and that says a lot about what the employees thought. Moreover, there was also a system of sharing profits based on participation in the share capital of the company. Finally, working in a company whose boss put so much effort into having the best product in the world, they couldn’t help but react positively when asked to make sacrifices.” The first Apple says a lot about the start-up mentality needed in order to grow, but it is also a difficult model to follow for organizations that are already mature. In that case, one can always imitate what the U.S. coffee shop chain Starbucks has done recently to find a new way to interact with their customers: instead of proceeding with minor adjustments, it decided to find out what approach a brand new company would have. And then it was expressly created. A start-up. It is called 15th Coffee and Tea and it has been made into a live learning lab for experimenting in design, sustainability of materials, and new products. 091

contexts

The makers revolution by Simone Arcagni

Creative digital and technology experts, the garage innovators who, with their innovations and new business models, are creating what many do not hesitate to define the “third industrial revolution.”

If you ask Chris Anderson, the director of “Wired” and someone who knows all about technology and the future, he will tell you what he already wrote in 2010 in his famous article In the Next Industrial Revolution, Atoms Are the New Bits and has been repeating in many meetings and conferences: namely, that the revolution concerning the makers is a true revolution in the world of industry and commerce. But who are the makers? The makers are creative digital and technological experts, the garage innovators who, with their innovations and new business models, are creating what many do not hesitate to define a new “industrial revolution,” or better yet, the “third industrial revolution.” The basis of the phenomenon of the makers has to do with ideas, plans, and projects that the digital world turns into objects almost immediately, without the normal rigmarole that goes on with industrial design, planning, prototypes, and manufacturing. But to understand the maker revolution, we have to enter into a new world of production where there are a few buzzwords. The first are “open source” and “creative commons,” and thus, sharing: putting ideas together and putting them into circulation. A model in which the normal concept of copyright is exceeded in order to make the ideas

and projects open to possible amendments, changes, and customizations. A universe of knowledge that is based on the principle of exchange, just like the Arduino circuit of Massimo Banzi, an engineer known worldwide as one of the fathers and gurus of the maker way of thinking. Invented in 2005, as reported in Wikipedia, “Arduino is an open source framework that enables rapid prototyping and quick learning of the basic principles of electronics and programming.” With Arduino, even those unfamiliar with programming languages can have the tools to create and design, and therefore implement things, objects, and prototypes. Other buzzwords are “crowd-founding” (a collaborative process to seek funding for a project) and “crowd-sourcing” (a process of collective development of a product), that is to say, a system of funding “from below” which involves the participation of a network and a community in the making of the project. We are talking about a new economic model, starting with the users themselves and providing for the raising of capital (usually small amounts, but lately the collection of quite substantial budgets has been registered), not according to the model of shareholders, but rather in the form of a real participation in the execution of an idea and in looking for the budget to

achieve it. The numbers of Kickstarter, the famous American crowd-funding site, are impressive: millions of dollars have been raised and there are hundreds of thousands of financiers. The quest for capital is changing, as are the design, construction, and business models. And you do not necessarily have to rely on eBay to sell items, you can do it yourself from your own website, from your blog, or even on your own Facebook page. Leave it to Blomming, a system to sell online without intermediaries: it is the e-commerce of the next generation that uses social networking, which is why it is called social commerce. It is not that the makers want to change the business system, they simply feel like outsiders and have therefore created another one on the Internet, based on the social communication of networking. Just think of the case of Zooppa, a social network and a community that brings together creative people who are put to the test in creating advertising for brands and companies that commission projects. Let’s talk about small, or even individual, entrepreneurship which is based on the philosophy of DIY or “Do it yourself;” this means you need to have a lot of imagination and technology that is easy to use and, of course, not too expensive. Such as the 3D laser printer that allows you to create solid objects easily. Vecto-

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WORK IN PROGRESS The symbol of infinity containing a plus and a minus: this is the logo of Arduino, the platform open to everyone for creating anything. A creative spirit that is infinite because the ideas are put into circulation and exchanged continuously; a world that is a work in progress. (arduino.cc/en)

realism, for example, is a website that offers users the ability to easily design their own projects and to print objects. The 3D laser printer is a small workshop for the home. Nothing like the Ford factory and job hours! But beware: the true economic aspect of the maker lies in the craftsmanship. An artisanship of ideas and of finding the ideal spot on the Internet and social networks. New factories, but also real laboratories, such as Fab Lab: another key word in the world of makers. The Fab Lab (Fabrication Laboratory) is made up of small laboratories and workshops dedicated to the makers and the digital fabrication that is spreading somewhat all over the world, allowing anyone to submit their ideas in the form of files and see them made in a short time and very inexpensively. Along with all the games, trashy objects, and preposterous “horridness,” it is not unusual to come across some original ideas. And so it is not surprising that the search for the successful designers of the future is now taking place among these maker fans. The “do it yourself” artisan philosophy is so innovative for some people that a term attempting to describe it has even been invented: thinkering. The term (coined 094

in 2007 by John Seely Brown, director of research at Xerox and head of the Xerox Parc research center in Palo Alto) is the result of the union of thinking and tinkering: a new philosophy of “thinking/ touching/doing,” a kind of conceptual model that has to do with its being put into act and touch, a thought that takes place in a creative and shared action. The universe of the maker is, therefore, a composite world and includes the world of start-ups, original ideas to be developed, as in the case of CicerOOs, that maps the places in the world in which to make data available to tourists who use the Internet to plan their holidays. The history of CicerOOs involves two young people, Daniele Cassini and Daniele Viva, and their idea which has become a business. From tourism to the weather: instead, Metwit is a social network where users exchange weather news, thus becoming the first shared platform for weather forecasts. We have already discussed the role being played by Chris Anderson and the magazine “Wired” to propagate the maker idea. But an equally important role has also been played by MIT, the famous Massachusetts Institute of Technology, the birthplace of

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It is not that the makers want to change the business system, they simply feel like outsiders and have therefore created another one on the Internet, based on the social communication of networking

the Fab Lab. Furthermore, the movement also has its own organ, “Make,” a magazine founded by the guru of this new “thinking,” Tim O’Reilly, together with Dale Dougherty. Among other things that can be attributed to these two is the definition “Web 2.0.” “Make” is a monthly magazine that soon became the official organ of the maker world and is published by O’Reilly Media, known for its software manuals and being a point of reference for spreading the open source philosophy, for technological innovation and the world of start-ups. A magazine entirely dedicated to a phenomenon which, until recently, has been defined as a subculture made up of hobbyists and amateur designers, although by now the movement has grown considerably in size, also testified by the entry in this field of a giant such as Autodesk. And to allow the makers to get together and exchange ideas, the magazine “Make” has also organized a periodic event since 2006, the Maker Faire, where makers from all over the world converge, bringing their ideas, prototypes, and business models or, quite simply, absurd objects arising from an imagination that can do almost any-

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thing with a computer, software, a connection, and a printer. Simple, isn’t it? But the phantasmagoric world of the makers, shared by designers and programmers, hobbyists and geeks, artisans and young (even extremely young) entrepreneurs of the future, also has the support of a cult blog such as Boing Boing, founded by Mark Frauenfelder, a journalist who made his reputation in the preparation of “Wired.” Boing Boing is one of the most popular and influential blogs in the world. One of its editors and most prestigious writers is the science fiction writer Cory Doctorow, who also devoted one of his novels to the maker phenomenon, Makers, which he defines “a book about people who hack hardware, business-models, and living arrangements to discover ways of staying alive and happy even when the economy is falling down the toilet.” Something is changing. Something has already changed! New production models are in the offing: the makers may not be the answer to a capitalism that is in crisis and has somehow aged more quickly than you would think, but it is certainly a breath of fresh air and there are social, cultural, and financial models that have already begun to offer it. 095

in-depth

Do-it-yourself production: 3D printing by Nicola Nosengo

A breath of fresh air for industry could come from 3D printers. Technology and design serving the imagination of the makers to create plastic objects. The age of personal fabrication has not really begun yet, but it may never have been so close.

The ability of “The Economist” to be far-seeing should be acknowledged. Back in 2007, when virtually no one outside of the inner circles was talking about 3D printing, the English weekly dedicated articles and covers to the “new industrial revolution” that lay ahead on the horizon, thanks to this new technology which was identified as one of the keys to the future industrial revival. According to “The Economist” back then, once the economies of scale had lowered their prices enough, 3D printing would do for the manufacturing industry what the personal computer had done for information. Today, 3D printing is a well-known reality, and not just for the far-sighted editor of the English weekly. And that goal of accessibility has almost been achieved. We are almost at the tipping point beyond which it will become a “home” technology. Today, the basic models of 3D printers are practically accessible to (almost) all users. Tools such as the MakerBot’s Replicator cost just over $2,000. More than a 2D printer, but no more expensive than a scooter or a high-end laptop. And some also go below those prices, such as the Italian printer Sharebot, an ultra-basic model presented during the last Furniture Expo in Milan. It sells for 900 euros, the first to have shattered the psychological threshold of 1,000 euros. 3D printing arrives as a solution for creating industrial prototypes, to be developed and tested before moving on to tra-

ditional production on an assembly line. The machines used for industrial production are efficient and cost-effective when they have to produce thousands of identical pieces, but programming them to create a single piece is difficult and, in proportion, enormously expensive. For some time now, however, 3D printing has also been used to produce finished parts to be put on the market in small quantities, plus it allows for customizing them one by one. Today, 28% of investments in 3D printing is

You prepare a design on the computer and press “print” and out of the 3D printer comes a piece of a lamp, a table, a canoe... used for final products, and according to analysts, the percentage will reach at least 50% within two or three years (even though prototyping will always remain an important application). But how does this technology work? For the user, it is not very different from any other kind of printing. You prepare a design on the computer and press “print” and out of the 3D printer (which is just slightly bulkier than a normal one) comes a piece of a lamp, a table, a

canoe... The printer basically adds thin layers of material according to the drawing, to bring out the full object. This why one also speaks of “additive” manufacture, while traditional industrial manufacture is “subtractive” (one starts from a block of material, whether metal or plastic, and cuts away the parts that are not needed to obtain the desired shape. As you have probably guessed, 3D printing leads to a great saving of material). The techniques for laying out the several layers of plastic may be different, and you can choose between laser or inkjet 3D printers. Some printers use a system similar to the inkjet for spraying liquid plastic onto a mobile support. The plastic is immediately dried and solidified by using ultraviolet radiation, after which the support moves slightly to go on to the next layer. Another technique involves dissolving the plastic by means of a moveable head which creates a thin filament, and then goes on to create subsequent layers in this way. A third way uses powders as starting materials, spread on a mobile tray and solidified with a splash of glue or fused by laser to take on the desired shape. Complex structures with gaps or protruding parts are created by using gel, which is added subsequently to increase the support at particular points, or by leaving the unmelted powder in chosen points, which is then washed away to create the hole. The most sophisticated printers can simultaneously use differ-

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oxygen | 18 — 12.2012

SALES GROWTH

Fab Labs are springing up like mushrooms all over Italy. The first arose in Turin on the occasion of the celebrations for the 150th anniversary of the Unification of Italy

ent materials to create objects that are rigid in some places and soft in others. It is possible to produce virtually everything with these systems, or a combination thereof. Of course, you need the expertise to handle the CAD (Computer Assisted Design) software, which is quite different from just using Word. And it takes a certain proficiency in materials, plus the possibility and capability to purchase them. For this reason, in addition to the price of the machinery, making plastic objects at home is not really within the reach of everyone. Precisely for this reason, the Fab Lab came into being: a hitech craft workshop that, with the help of 3D printers and other technologies, produces (or repairs) plastic objects at the request of customers. Do you want an electronic device, a piece of furniture, or a boat, and no company produces it the way you want? Go to the nearest Fab Lab and they will even make just one or two pieces for you, something a large 098

In 2007, 66 3D printers costing under $5,000 were sold – the professional ones are around $73,000 –, but in 2011, the number rose to 23,265 (2012 Wohlers Associates report). “Basic” 3D printers costing under $500 have recently come on the market in order to reach a broader public.

company would never do. The reference model is the Fab Lab that was created at the Massachusetts Institute of Technology (MIT), set up by the Center for Bits and Atoms, also at MIT and directed by Neil Gershenfeld. Stemming from the thought that the digital revolution is only a part, and not even the most interesting part, of our future, their idea was to bring computation into the physical world: to create programs that manipulate atoms, and not just bits. Fab Labs are springing up like mushrooms all over Italy. The first arose in Turin on the occasion of the celebrations for the 150th anniversary of the Unification of Italy. Defined by its founders as “the child of industry, from which it inherited the qualities of the precision and reproducibility of the products; the grandson of craftsmanship, from which it learned custom design; the brother of open source, with which it shares the philosophy of free exchange projects.” Behind all this, foremost was Massimo

Banzi, father of Arduino, an open source hardware and software electronic platform, which basically allows anyone to create smart devices (from environment sensors to the control unit for machines to processors for every need). It was Banzi who pinpointed digital fabrication as the topic on which to focus, in order to present the possibilities that innovation offers Italy for its industrial revival. Everyday objects that have come out of the Fab Lab include a set of wall hooks for hanging tools, small useful inventions like a cell phone holder to mount on a bike, and professional equipment that would cost an arm and a leg if they were massproduced versions, such as a support for steadycam cameras. Even though the celebrations of the Unification of Italy are over, the Fab Lab Turin is still standing and is still the main reference point for the Italian community of makers. Meanwhile, in Milan, the Frankeinstein Garage came into being, which in addition to providing all of its equipment (3D

do-it-yourself production: 3d printing |

printing but also CAD design, laser cutting, and other more traditional “subtractive” technologies), organizes courses and workshops to bring together all those interested in personal fabrication. Precisely with the help of Frankeinstein Garage, Andrea Radelli, a twenty-sevenyear-old maker, made Sharebot, a 3D printer that is extremely affordable for all budgets, which he created by simplifying a 3D printer already on the market. Radaelli sells the kit to assemble it for 900 euros via the Internet. The entire project is obviously open source, so anyone willing and able to do so, can not only buy it but also improve it and modify it to suit their own needs. Then, if you never want to leave the house, there is Vectorealism, which offers everything online: from consulting with a designer on carrying out a project to the choice of materials and the possibility to order one’s own project or prototype. Just how lively the makers scene is, and how similar to what the world of pro-

grammers was only about thirty years ago, was shown at the Smash 3D Design contest held last October 20th in Milan. Eight active teams, supported by the same number of teams of operators of 3D printers, were challenged on the theme “show your grandparents the wonders of 3D printing,” with the assignment to “create an object that is an example and that encompasses all the ‘coolness’ of 3D printing.” And the competitors did just that, such as the winning team Jambro of Filippo Mambretti and Jennifer Carew with their Mino, a family of assorted walking stick “legs,” capable of transforming this everyday object into a sort of “Swiss army knife” which can adapt to walking on the grass, on sleet, or on the sand by simply changing the “leg.” Or the second place project, Swingthing, a small addition that turns that same walking stick into a golf club. Zooilab took third place with a set of molds for cakes and meatballs in-

oxygen

spired by video game characters. Simple, minimal, seemingly “harmless” objects but which, until five years ago, could only be produced industrially, assuming there was sufficient demand. Get ready to see more and more Fab Labs. And be prepared for an explosion of personal fabrication resulting in unpredictable (including economic) consequences. According to Gerhsenfeld of MIT, the stage where we are now with digital fabrication is the same as it was with computers at the time of the PDP (Programmed Data Processor): an intermediate “developmental phase” of the computer (in the late Sixties and early Seventies) in between the huge mainframe and personal computers, in which computation came within the reach of small workgroups, and in which the Unix operating system that is still the basis of much of the computer science that surrounds us was developed. In short, the phase that sets the stage for the mass explosion. 099

oxygen versus co2

Twice upon a time, there was a chimney sweep by Stefano Milano

“Now as the ladder of life ‘as been strung/ You may think a sweep’s on the bottommost rung/ Though I spends me time in the ashes and soot/ In this ‘ole world there’s no ‘appier bloke/ Chim chiminey, chim chiminey, chim chim cher-oo!/ Good luck will rub off when I shake ‘ands with you/ Or blow me a kiss and that’s lucky too.” The chimney sweep from “Mary Poppins” is still wearing the same uniform, but he has, in fact, become a modern biomass technician.

Whether in the form of logs, pellets, or wood chips that end up in the stove, wood is still an important resource for domestic and urban heating. It populates our forests. It is a local resource (a resource that is often forgotten, that no one cares about). And to all intents and purposes, it can be defined as a renewable source: every tree that grows absorbs the CO2 emitted during the combustion of a piece of wood. There is no denying it: people like flames. Fire is fascinating: design and hi-tech have made it evolve technologically, in private fireplaces and boilers for district heating.

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We are used to talking about wood stoves or fireplaces, but the market contemplates a combustion apparatus that is increasingly complex and equipped with sophisticated devices, requiring greater professionalism and responsibility from those who work to install and maintain the systems. Manufacturers, stove-repairers, and chimney sweeps share a professional network that cannot be improvised: it requires continuous updating, compliance with installation regulations, and territorial monitoring services. Since 2008, the Italian government has required that all installers of chimneys, flues,

Chimney sweep — This is a profession that is being constantly updated. The rules of the game change and it is important to understand what you need to know for working, about the what and the how

What happens to the chimney sweep from Mary Poppins in this scenario of revolution? He becomes a qualified service technician of ventilation channels, transport vapors, and smoke systems

and wooden biomass heating systems (hence, stoves and wood pellet-fueled fireplaces) must be qualified for the profession and can/ should provide declarations of conformity for each system installed. Having specialized technicians who move in institutionalized channels has launched a gigantic mapping of the territory. So what does that mean in the tsunami of Big Data? To feel the pulse of the situation, and identify and provide solutions for the possible risks of a fire system: a fireplace that does not draw well, an old system that is malfunctioning. What happens to the chimney sweep from Mary Poppins in this scenario of revolution? He becomes a qualified service technician of ventilation channels, transport vapors, and smoke systems. He must know a bit of everything: the regulations and cleaning techniques, traditional tools, and modern instruments. He works closely with the stove-repairer to control the ventilation ducts before the installation of fireplaces and stoves. But it is not uncommon to find him working with the managers of large power plants. The master chimney sweeps are a tried and true conclave which meets regularly

to discuss technical, regulatory, and operational issues of the profession. This is a profession that is being constantly updated. The rules of the game change and it is important to understand what you need to know for working, about the what and the how. Choosing biomass as fuel is becoming increasingly important in achieving the renewable goals set by Europe and currently subject to incentives. Some manufacturers are clamoring for mandatory training courses dedicated to operators, dealers, installers, and maintainers. Lombardy has invented a register of regional plants (Curit), establishing that each plant above 4 kW is considered a heating system and therefore must be registered and undergo regular maintenance. An example of excellence: ANFUS, the national association of chimney sweeps and chimney specialists, that has been trying for years to create a network among chimney sweeps, chimney-repairers, and producers â&#x20AC;&#x201C; a grassroots action that, as in other sectors of the energy industry, replaces traditional political action and tries to get the stakeholders of a certain territory seated at the same table so they can find new solutions to the energy issue. Chimney sweep democracy.

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science at the toy store

Il lavoro hard che non spaventa i più piccoli by Davide Coero Borga

Dad is far more jealous of his toolbox than of his own wife and his favorite chair. Drills. Wrenches. Hammers and garden tools. Workshop tools are ancient toys. A brief excursus on toolbox toys in the nineteenth, twentieth and twentyfirst centuries. From wooden tools to the sophisticated reproductions by Bosch.

Hammer. Blade screwdriver. Phillips screwdriver. Drill. Wrench. Saw. Gauge. Pliers. Parrot pliers. Vice. Allen screws. Die. File. Plane. Punch. Scraper. Sickle. Knife. Mallet. Glue. Awl. Spatula. Team. Level. Nails. Ruler. Adhesive tape. Rake. Mower. Shears. Work gloves. Borer. Burin. Cutter. Bill-hook. Chisel. Tap wrench. Mortise. Staple. Height gauge. An entire world of words, the vast majority of which have never been heard before, that exists locked away in a strange and sturdy box: dad’s toolbox. The tools

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and work equipment which every man is jealous of – more so than of his own wife or favorite chair – have been toys for centuries. Tools that have been lost in the history of man, and yet we can find them today in the museums of history and prehistory, almost always reproduced in different scales and materials for little children. They like tools. Children obviously feel more like adults when maneuvering them, experimenting with them, getting to know them. Playing with them favors the process of emulation of adults

Toy tools —

However, the habit of learning through playing is a trait that mankind shares with many other animal species

The toy tools say a lot about a tendency to turn some tools invented by human beings into edutoys

and stimulates the creativity of each child. And if playing and curiosity are the key elements of a scientific approach to the world, work tools and instruments of the technical arts are the main ingredients of a good toy! Even for today’s children. On the other hand, the objects of science and technology are not new to promotions in the field, and in the past they were successful as actual toys: from the dishes in the kitchen to laboratory instruments from the scientific world, from the work tools of a mechanic to hydraulic implements. The toy tools say a lot about a tendency to turn some tools invented by human beings into edutoys. However, the habit of learning through playing is a trait that mankind shares with many other animal species, for which the toy plays an important role in the learning of knowledge essential to survival. Think of the obstinacy with which a dog chews up slippers and the sticks it retrieves. Watch the ambushes that the cat prepares for a ball of yarn or rubber balls, as it maneuvers among carpets and sofas to pounce on them. These are the habits of predators. If we take this instinct to play with objects into account, it is not surprising that mankind still designs

and produces on an industrial level products conceived for this purpose. Some categories of playing are probably part of a common cultural background of various nations. Others have become indispensable to the formation of the modern human being. The toolbox is fully entitled to be in this category of toys. Enough so to justify its global distribution and “cloning.” They come in different sizes, prices, and makes. Without fail, there is always a hammer, screwdrivers, and pliers, but there are hundreds of versions of toys for the little laborer. And the buyers are increasingly heterogeneous. Little girls want to have fun with the tools of the bricoleur, too. In times of ever newer technologies, a striking experiment was conducted by the group Robert Bosch GmbH, with their completely revised version of the old toy toolbox which has recently arrived in toy stores. Along with the bolts and hammers, they have added electric drills and screwdrivers! And it’s not just children who play with them: even adults buy the kit for doing small household chores. In short, they officially go to the toymaker’s to accompany their child and come out with a bag full of toys strictly for children 0 to 99 years of age.

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Oxygen 2007/2012 Andrio Abero Giuseppe Accorinti Zhores Alferov Enrico Alleva Colin Anderson Martin Angioni Ignacio A. Antoñanzas Paola Antonelli Antonio Badini Roberto Bagnoli Andrea Bajani Pablo Balbontin Philip Ball Ugo Bardi Paolo Barelli Vincenzo Balzani Roberto Battiston Enrico Bellone Mikhail Belyaev Carlo Bernardini Tobias Bernhard Michael Bevan Piero Bevilacqua Nick Bilton Andrew Blum Borja Prado Eulate Albino Claudio Bosio Stewart Brand Luigino Bruni Giuseppe Bruzzaniti Massimiano Bucchi Pino Buongiorno Tania Cagnotto Michele Calcaterra Paola Capatano Maurizio Caprara Carlo Carraro Federico Casalegno Stefano Caserini Valerio Castronovo Ilaria Catastini Marco Cattaneo Silvia Ceriani Corrado Clini Co+Life/Stine Norden Søren Rud Elena Comelli Ashley Cooper Paolo Costa Manlio F. Coviello George Coyne Paul Crutzen Brunello Cucinelli Partha Dasgupta Marta Dassù Mario De Caro Giulio De Leo

Michele De Lucchi Ron Dembo Gennaro De Michele Gianluca Diegoli Fabrizio Dragosei Peter Droege Freeman Dyson Magdalena Echeverría Daniel Egnéus John Elkington Richard Ernst Daniel Esty Monica Fabris Carlo Falciola Alessandro Farruggia Francesco Ferrari Paolo Ferri Tim Flach Stephen Frink Antonio Galdo Attilio Geroni Enrico Giovannini Marcos Gonzàlez Julia Goumen David Gross Sergei Guriev Julia Guther Søren Hermansen Thomas P. Hughes Jeffrey Inaba Christian Kaiser Sergei A. Karaganov George Kell Parag Khanna Sir David King Mervyn E. King Hans Jurgen Köch Charles Landry David Lane Manuela Lehnus Johan Lehrer Giovanni Lelli François Lenoir Jean Marc Lévy-Leblond Ignazio Licata Armin Linke Giuseppe Longo Arturo Lorenzoni L. Hunter Lovins Mindy Lubber Remo Lucchi Tommaso Maccararo Giovanni Malagò Renato Mannheimer Vittorio Marchis Jeremy M. Martin Paolo Martinello

Massimiliano Mascolo Mark Maslin Ian McEwan John McNeill Daniela Mecenate Lorena Medel Joel Meyerowitz Stefano Micelli Paddy Mills Giovanni Minoli Marcella Miriello Antonio Moccaldi Renata Molho Carmen Monforte Patrick Moore Luca Morena Luis Alberto Moreno Richard A. Muller Teresina Muñoz-Nájar Ugo Nespolo Nicola Nosengo Helga Nowotny Alexander Ochs Robert Oerter Alberto Oliverio Sheila Olmstead Vanessa Orco James Osborne Rajendra K. Pachauri Mario Pagliaro Francesco Paresce Claudio Pasqualetto Alberto Pastore Federica Pellegrini Matteo Pericoli Emanuele Perugini Carlo Petrini Telmo Pievani Tommaso Pincio Michelangelo Pistoletto Viviana Poletti Stefania Prestigiacomo Giovanni Previdi Filippo Preziosi Vladimir Putin Marco Rainò Federico Rampini Jorgen Randers Carlo Ratti Henri Revol Marco Ricotti Sergio Risaliti Kevin Roberts Lew Robertson Kim Stanley Robinson Alexis Rosenfeld John Ross

Marina Rossi Bunker Roy Jeffrey D. Sachs Gerge Saliba Juan Manuel Santos Tomàs Saraceno Saskia Sassen Antonella Scott Lucia Sgueglia Steven Shapin Clay Shirky Konstantin Simonov Uberto Siola Francesco Sisci Craig N. Smith Antonio Sofi Leena Srivastava Francesco Starace Robert Stavins Bruce Sterling Stephen Tindale Viktor Terentiev Chicco Testa Chiara Tonelli Mario Tozzi Dmitri Trenin Ilaria Turba Luis Alberto Urrea Andrea Vaccari Nick Veasey Viktor Vekselberg Jules Verne Umberto Veronesi Marta Vincenzi Alessandra Viola Mathis Wackernagel Gabrielle Walker Elin Williams Changhua Wu Kandeh K. Yumkella Anna Zafesova Antonio Zanardi Landi Edoardo Zanchini Carl Zimmer

Testata registrata presso il tribunale di Torino Autorizzazione n. 76 del 16 luglio 2007 Iscrizione al Roc n. 16116

INDUSTRIAL PRIDE Industry is security because it is manufacturing, creation, unity of spirit and matter, the body and soul of society; a security that is undermined today by the global economic crisis. So for Italy – the second largest manufacturing country in Europe – doing things right is not enough: it must know how to do them better than others. In order to do so, industrial pride must first be restored, valuing work in every role, making space for creativity and initiatives, connecting small businesses through networks and putting the larger ones in a position to meet the new needs and new global technological trends. The key to success is continuous innovation. This issue of Oxygen tells many success stories, at the dawning of what is already being called the “new industrial revolution,” which is going on throughout the whole world and is revitalizing the quality manufacturing of the historically most industrialized countries. «The world is on the brink of a new era. This shift in fortunes of the developed and developing world in manufacturing will begin to go into reverse and manufacturing in the rich countries will stage a come-back»

Oxygen is an idea by Enel, to promote the dissemination of scientific thought and dialogue.