Three centuries in a month and moving forward: #Italy, #EU, and #COVID19 - 1. The quest for an industrial policy

1. The quest for an industrial policy

(Reference: Per una politica industriale che veda oltre le prossime elezioni #industry40 #GDPR #cybersecurity / For an industrial policy that survives election cycles #industry40 #GDPR #cybersecurity)

In my view, industrial policy is a matter of continuous improvement, not of something cast in stone- as an industrial policy is (or should be) about both competitiveness and sustainability.

Or: what's the point of building, in the XXI century, an industrial policy that short-term improves competitiveness, but at the cost of destroying future potential and adding "environmental ballast" whose disposal cost exceeds any value added generated by the industrial policy?

My view on continuous improvement is a personal one: "Whenever a mission is coming to an end I do have a routine- I check which lessons learned during that mission are worth remembering.

And, obviously, I do check any adjustment needed to my skills"

Unfortunately, in Italy we are used to laws such as those that supported the transition toward Industry/Business 4.0, i.e. a first release, followed by annual adjustments and "stop-gap" measures- both expanding and contracting coverage.

That isn't an industrial policy, as no business can plan investments that require a long-term view with year-on-year returns to the drawing board.

Thinking long term is already something elusive for companies that, due to the their small size, lack the organizational structures (and, often, capabilities) to identify, design, implement, monitor long-term plans.

I think that building up an industrial policy for Italy would first require building up knowledge capabilities within Italian companies so that they can actually contribute to the definition of such a policy, contribution that cannot be reduced to a mere listing of desiderata.

As I discussed in a 2018 article, there is a "knowledge gap" in most business development measures.

E.g. in the early 2000s, while I supported start-ups, with some partners focused on EU funding saw how many "operational rules" had an original sin, as they assumed a multi-disciplinary team both on the side of those creating the rules, and those willing to apply for a specific line.

I am not referring to just "technical" knowledge specific to a business domain: the understanding should be more systemic, covering from the "bureaucratic" to the "financial" to the "technical" and, of course the "controlling/monitoring".

Often the reason why Italian companies do not obtain all the potential benefits of this type of incentives is because they lack an organizational culture that is multi-disciplinary.

Think just about the current industry 4.0 and business 4.0 initiatives, ranging from digital transformation within a company, to creating new "business ecosystems", or enhancing the infrastructure needed to support all that (e.g. from broadband Internet, to new ways to tax, monitor services, and bill customers).

We are partitioned in thousands of tribes, actually parochial tribes, and whenever a measure demands a multi-disciplinary approach...

...tribal competition matters (i.e. the consideration of how much a specific tribe having a specific skills would get), and trumps over the need to access specific skills to be able to build an acceptable proposal in a timely manner.

On the flip side, even recently I saw businesses focused just on... creating a business that could receive funding, not looking for funding for a business.

In Italy, usually even moderate structural growth in businesses delivers an excessive burocratization of processes and the creation of "vertical silos" well before than size demanded it in other countries.

It is a paradox: small-/medium-size companies should potentially be able to adapt to 4.0 faster than larger entities, but smaller companies lack competencies deep enough to grasp the impacts, while in larger entities those with the knowledge "circle the wagons" in their own knowledge domain, as shifting toward 4.0 would imply both losing role and being under constant monitoring.

As did in the 1990s for a customer: train across, inform, and then (as was asked by the CEO of my customer) get involved in change initiatives alongside those you trained, as an advisor, to help them build internal capabilities and a portfolio of cases that can then enter the organizational memory (and folklore).

Anyway, as I wrote in that article, you need also to have a roadmap focused on convergence, not create what consultants like ("happy islands where everybody is converted"), as otherwise you risk... "preaching to the choir"- and that isn't change- at all.

I saw that many consultant-led change initiatives lost steam as soon as the external catalyst was removed, and those who had been hunkering down were able to keep the new lingo, but deliver old habits.

As you noticed, this required leadership (taking a chance from the customer side), and this is another theme that seems to have attracted some interest....