- Published: Wednesday, 12 December 2018 22:19
Today I attended an interesting seminar on working with USA- for companies, organized by the Turin Chamber of Commerce, and including a presentation of the UCLA GAP
On the latter, it was interesting to hear that an Italian start-up incubated in Turin found an Italian investor... due to the UCLA programme.
If you want details, my real-time notes and selected slides are available on Instagram, on my @hyperuranos account:
Part 1 Part 2
I would like to add also a link to an article summarizing some of the key points of the trade tariffs changes introduced by the shift from NAFTA to USMCA (the whole agreement is online, but I have no need right now to read it- so, I will let you enjoy it https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between).
As I am in Turin, Italy, a location that used to be the European Detroit, probably I can focus on the changes for the automotive industry, including the requirement of having at least 40% produced by workers earning at least 16 USD/h, along with other conditions on content produced (75% vs. previously 62.5%), both conditions to be met, or else a tariff, that this morning was told that for cars and parts would be 2.5%, for trucks, pick-ups, SUVs an hefty 25%, would apply.
Now, if you look at recent industry data (January 2018 in USA), the automotive industry margins were at 10.25% (EBITDA)- it is a little bit apple and pears, but this would roughly state that the tariff for e.g. a SUV could be more than twice the margin.
So, you cannot just "adjust" with pricing, you have (and that's the intent) restructure your whole supply chain.
And there are various approaches (ask your consultants).
The reason why I am starting from the end is because this week I attended also another presentation, a report on the competitiveness of the economic environment of Piedmont (where Turin is located), and the panelists (and some members of the public asking questions) converged on some points that I already heard before, and discussed even when I was still living in Brussels, as early as 2007 (and continuing until I re-registered in Italy in 2012).
The curious point was that this latter conference was attended mainly by institutional partners, i.e. those providing support and services for companies members of various associations, but frankly I do not know who, beside myself, was actually representing a company.
Even more curious was that all those presenting shared a fair perception of the Italian and Turin reality: companies that for 95% are between micro- and small, high value added technological export mainly from the few large companies, a continuous investment in incubators accelerators etc. that seemingly does not deliver as much as delivered in other countries that have much less "support"- and that instead let it be done by the market itself.
One of the obvious issues is that tiny companies lack the structural abilities to join tenders, and even some of the data showed how tiny companies and the few large ones were the main "winners" in the (limited) extraction of value that Italian companies can obtain from EU funding (where we are structurally under-represented in terms of actual use of the funds allocated to Italy).
Actually, my joke with colleagues was that, while I was attending years ago seminars and workshops on e-whatever (government, health, etc- anything related to digital transformation) organized by the European Commission in Brussels, I met really few Italian companies, and way too many were actually tiny companies that, frankly, seemed structured to access funds (e.g. to fulfill the requirements in some cases to have at least X countries), as they were unknown to both myself and colleagues in their industry who were based in Italy.
Therefore, the research was actually a confirmation, as it was the previous one, presented two days before, focused just on innovative companies- again, see on Instagram @hyperuranos
Part 1 Part 2
So, yesterday afternoon at least two in the room (myself and another person who concurred with the same question I was uttering) were surprised how many of those presenting wondered why, despite all the initiatives to offer free training and support, ranging from tutoring to digital transformation to internationalization to IPR protection... just a handful of companies attended (if you consider that over 200,000 companies are registered with the Turin Chamber of Commerce, and over 38,000 are corporations, a small number indeed).
My remark: it is a matter of perception, of awareness.
When I was "selling" training, first on decision support systems in the late 1980s, then methodologies in the early 1990s, the first point was "raising awareness" from potential customers- this could be done by showing the value to the other parts of our own organization, as we did with our Andersen colleagues (so that they then considered potential projects to offer to their existing or potential customers); or by organizing "open days" after doing a direct marketing campaign to potential target companies and specific roles within each company, as I did also then in the early 2000s to launch the first version of my e-zine on change
Just having a catalogue and sending letters or emails isn't enough, as tiny companies receive way too many communications from too many sources, and, unless they see the value, are not going to attend- also because, in those companies, usually there is limited "listening from the top"; you need first to evangelize, then to train, not the other way around, as training is an answer to a demand, not a compulsory requirement (and even those delivery compulsory compliance training in Italy complain that companies do not attend).
The point is linked to the small size of companies, and I discussed in more detail both in previous articles on dirittodivoto.com and within the book on innovation in Italy that I released in July 2018 (you can read it for free online).
As shared also by a panelist, tiny companies do not want training, ask for connections with potential customers.
Therefore, also hiring digital natives, as suggested, or giving vouchers to have them "on trial" for a while isn't enough.
Ask students: how many really end up being used as "digital natives" for "digital transformation" (or at least "digital awareness", "digital preparedness assessment", etc)?
As happened over a decade ago, when there was a sizeable incentive to create an e-commerce website, and I met small shops that had built up a website only because somebody had told them that was free and would allow to cover also other activities (e.g. marketing), only to then stop being used.
A similar fate was for the Gamification workshop that I attended few days earlier, mainly to see who attended, and learn something more about what is "current" (not just in Italy) on the subject (see some info online)
Few attend, even fewer probably apply.
One of the issues discussed over the last few weeks, notably during the discussion on December 11th (SISPRINT), is the number of initiatives, and "focus areas", if compared e.g. with what did Spain (and, personally, I remember the approach used by Ireland, focusing on one or really few every decade or so).
I know that I keep repeating it in almost every article, but it is a kind of "Carthago delenda est": repeat it until it is done.
Turin has been searching for a post-company-town future for decades.
Few years back, in 2015, I attended in Turin at an association called Torino Europa few discussions using one or more books as "shared knowledge" to fuel the discussion.
One of these books actually presented how, having doubts, in the end Turin did select culture, academia, automotive, etc.
Over the years, the number of "focus areas" increased- spreading too thin scarce resources.
In no small measure, thanks to the resources provided by the two large Banking Foundations created in the 1990s by a law transferring ownership of banks, Foundations that for a while filled the void left by the (generalist) funding provided by the Central Government.
Having multiple "development lines" in a relationship economy created not focus, but "clustering".
While living full-time in Turin since late August 2015, whenever possible I attended various events for startups, on innovation, on the development of the Metropolitan Area of Turin, and on various social, political, cultural themes (but not those organized by just one party- I am bipartisan, my "choosing sides" is limited mainly to when I vote at the elections).
Yesterday there was an audience slightly larger than the panel, but it was quite interesting.
Also if I saw again the same "fracture" I observed elsewhere.
I will give an example.
Just focusing on startups in Turin, I attended events organized by at least four "tribes", and I have been in contact with few more.
So, a relatively small Metropolitan Area (approximately 2mln inhabitants), and instead of joining forces, they split.
Yesterday it was almost all "neutral"- until, after a direct attack on the incubators, etc. (that try to launch food, high-tech, mobility, health/welfare, culture, etc), as the data about export showed that exports from Piedmont have a high value added within the food industry, and a new "health city" is under development, one of the panelists suggested to drop everything, and focus mainly on food and welfare, including high-tech welfare, as for everything else we are too late to join the competition game (luckily for them, South Africa for 4G and Israel for high-tech did not follow similar advice).
Probably to fund the running costs of the new "health city" through "health tourism"- after using taxpayers and Foundations' money to build it supposedly for the locals.
Frankly, within the food domain the value added is linked to high-quality, but not to living standards for those involved, and ditto for most of the welfare domain, where a rough assessment of the cost of e.g. each long-term bed/place within the new structures shows that it is doubtful that would be sustainable, as it is done now, by taxpayers, considering the lowering of salaries and increase of lower-paid service jobs (see on this point directly the "Rapporto Rota" - also if I shared few ideas on that in previous articles).
So, it seemed more a defense of one of the tribes, than a rational discourse, as others could make equally "rational" (i.e. selective use of information) presentations about the automotive, startups, culture, etc.
I prefer to focus on numbers and politics.
The latter first: politics is supposed to be the choice of a model to achieve, and even Fukuyama (read the book "The End of History", not just the comments about the book) eventually had to accept that yes, democracy hasn't yet removed the concept from the table, as there are also other elements to consider (technology science etc.).
The former then: but in order to design a future that can be achieved, you have to start from what you have.
It is not just a matter of "bean counting"- it is a matter of choices.
Now, way too often discussions about "focus" in Italy are self-referential: yes, our food and wine command a better price and have a higher perceived quality, but we are still too fractured to benefit, just look at how many Italian companies within food&beverage ended up being acquired by foreigners in order to grow.
On high-tech welfare: nice to talk about it in conferences, but, frankly, most of the structures and jobs currently being created are low-tech.
Even international reports on the future of jobs show that, in healthcare, the case is actually to turn high-tech most of the administrative and knowledge-intensive activities, while shifting more resources toward caregiving activities.
Or: food and health, if selected as "targets", would reinforce the "hourglass" dichotomy that has been well represented within the "Rota Report" on services, something that has been expanding during the transition from manufacturing to services, as the number of value-added jobs has contracted, not expanded.
Another curious point that I heard often in Italy over the last few years is about higher education: yes, it is true that we have less graduates than other countries.
But trying now to convince teenagers who see offered a 600-900eur/month entry salary in a "gig economy" for graduates, while their colleagues in other EU countries are offered four or five times as much, to get a degree just as a matter of personal development is at least hypocritical.
As access to various professions and roles in Italy requires a specific degree: so, not really a matter of "culture".
It seems more, again, a defense of those who multiplied the number of degrees by shortening them and then expanding demand for further specialization: defense of their own jobs in delivering degrees.
There was a timely article on today's website of "Il Sole 24 Ore", showing how many years of work would be needed in each Italian town to recover the cost of a degree: for a three years degree, around ten in Milan and Rome, with an Italian average of 15, while in Viterbo (not too far from Rome), you should work 77 years.
Back to the main theme, innovation and repositioning.
Let's be frank: for all the lofty speeches, the reality is that both those delivering courses and those attending them do it mainly as an investment, not personal development.
Italy is a collection of individuals organized in tribes by family, links, etc- not yet a society.
We are still to the XIX century "fatta l'Italia, bisogna fare gli italiani", i.e. we have a country, but we aren't yet a nation.
So, while waiting for individuals to become aware of the beauty of lifelong-learning, probably society as well should promote that in practice, not just to support way too many academic posts shielded from reality.
And, anyway, that awareness would require showing a potential for a better future, not a "first past the post scavenger" attitude, as way too many told me over a decade ago, as they considered Italy a lost cause, and therefore (on the left as well as on the right of the political spectrum) defended the concept of a society structured around the "hourglass".
Italy cannot keep absorbing debt unless its citizens are willing to take again a fair share of it, instead of depending on foreign investors.
Therefore, this requires recovering an ability to compete, which, in turn, requires not just offering an "innovation training menu", but also making it attractive.
Long ago I wrote about the old concept of "a thousand flowers"- and probably the only way to "detour" the owners of smaller companies from competing basically just on price or incremental innovation on existing (e.g. no R&D) technology, is to give them real cases of tiny companies that were able to innovate and obtain economic benefits from that innovation.
I heard often than tiny companies cannot invest in robotics- but that is an old mindset: robotics can be even just a project to automatize and turn into scalable a simple process where currently a small company is competitive just on price.
Or: less or same staff doing more, thanks to really simple off-the-shelf or "Lego(tm)-style" industrial robots focused on doing really basic, old, simple tasks- but in higher volumes, and created bottom-up, not by a "think tank designing the World".
The latter was the old approach to industrial policy that worked after WWII when Europe was re-industrializing, when you could think about manufacturing plants that would last for decades with minimal change in technology.
But now, when the adoption time for a new technology or product/service by customers, not just by manufacturers, is measured in months (ignoring apps and other "virtual services" that were adopted in a fraction of that)?
You have to talk the language and "feel" the motivation of your potential target customer (i.e. businesses, within the scope of this article), if you want to be able to have them spend time with you instead of doing what they already know is able to deliver results now.
Otherwise, shifting to food&welfare isn't a choice- it is a surrender hoping to defer the moment when that too will not be competitive enough.
Just imagine 20 years from now: if automation were to reach low-tech human-side caregiving, if you have few highly focused "technicians" and "orchestrators", and a crowd of caregivers, what would you do with them?
And what would you do with all those that, at that time, will be within the "training pipeline" (e.g. already in vocational schools, universities, attending courses, etc)?
When the OECD "sponsored" e-government at the end of the 1990s, in 2014 this evolved into "new public governance approaches are needed to support a shift from governments anticipating citizens’ and business’s needs (citizen-centric approaches) to citizens and businesses determining their own needs and addressing them in partnership with governments (citizen-driven approaches)."
Therefore, unless you involve the typical local businesses (95% micro-to-small) into the "future-definition" process, you are just building up escape routes for the few, not a sustainable economic development model for the future.
Because, in the end, the new "innovation cycle" will have to be not just continuous, but also based on "antennas" that will influence the next generation of products, services, manufacturing processes.
So, we need to redesign not just "think tanks", but much, much more- restructuring the "supply chain of knowledge".