- Published: Sunday, 09 December 2018 21:34
As I wrote often, business has a political dimension.
Nonetheless, the reverse is also true.
Now, this side of my blogging is focused on the "political" side and its (past, present, future) side-effects, while Rethinking Business caters for the business side, and the latest post was published on Friday December 7th, focus: automotive, smart cities, and urbanization.
This will be a short post: points for discussion, more than sharing ideas or solutions (those will be shared at a later stage).
I would like here to focus on the political side of that previous "business" post, starting from two paragraphs of that article:
"A closed ecosystem that actually lives as a smartcity, and whose inhabitants are used to be de facto everyday testers of new ideas, approaches, products, services." and "For the time being, it would be enough to get a little bit out of the technology box, and think about technology within the cultural and social environment.
But, in Italy, it would require both the local authorities and all economic and social parties to be first and foremost made "aware" of the potential of technology, as the first reaction from the locals is that, with the disposal of "formally negotiated" agreements, they would have a loss of control."
Where to start?
Probably, from an annual report on Turin, the "Rapporto Rota", that was presented few months ago, this year focused on the services side.
For my foreign readers: Turin has been soul searching for a couple of decades about its post-industrial future.
While many, mainly outside Turin, see the town as having a "closely held" control group, and some are talking about a resurgence of "class warfare", I beg to differ a little (and, as I wrote in my previous post about "Torino Stratosferica", it seems that I am not the only one thinking likewise).
Soul-searching for few decades implied forgetting that there were different starting points for different groups, on what the future should be.
What had kept all singing the same tune before? Easy- resources.
Listing alphabetically, just a few key ones: academic, automotive, banking, commerce (mainly retail and FMCGs), culture, event management, logistics, research, tourism.
Some would say that I am forgetting small manufacturing companies: but I am focusing not on the industries, in this post, but on the timeframe of thinking.
And, frankly, the thinking latitude of most smaller local manufacturing companies seem closer to commerce than either automotive or banking, or even academic or research timeframe.
Or: belonging to somebody else's supply chain, instead of creating their own (see a list here) projected to their own natural or potential (i.e. global) market.
If you ignore Lavazza (coffee), how many companies with a billion-plus global turnover are based in Turin?
Even for Ferrero, another FMCGs company based in nearby Alba, recently in a presentation about Luxembourg was casually told what you can read online, i.e. that "Casa Ferrero", "an office building of 29 500 m² that will house the world headquarters of the company" will not be in Italy at all- a business choice for a global brand that did not consider attractive moving to Turin.
Each of the industries listed above has a different timeframe of reference and different concept of future.
Take academia: supported by local banking foundations, it has been expanded- but there is not enough local sustainable demand of their graduates, i.e. demand that would generate a ROI for both academia (and its funding sources, State included) and those earning a degree.
So, we keep exporting talent- including those getting from abroad to study in our local "centres of excellence", and then, despite liking a lot the town and quality of life, decide that, e.g. if you study to become an engineer, you want to be an engineer with a development plan that isn't just built on short-term gigs, and, therefore, maybe other EU countries offer better opportunities.
Meaning: beside the resulting brain-drain, the timeframe of reference for local companies demanding local academia to train "business-ready" graduates implies that they are actually asking academia (and its financial partners) to absorb the recurring on-the-job training costs that elsewhere are absorbed by companies to ensure business continuity.
And, in the process, lowering the long-term sustainability of local institutions and research centres- that have to be able to attract, retain, deliver global talent in order to be part of a global "knowledge supply chain", if the local business ecosystem isn't able to be the right partner on that game, too local and too focused on the short-term.
Now, why this is something belonging to the "political" side and not the "business side"?
Because recently there has been an increased (at least vocal) assertiveness from local industrialists' organizations, in part linked to the high-speed train link between Turin and Lyon (TAV), but really extending on multiple dimensions.
The reason why it is happening now is that, after some 20 years, there has been a restructuring of the local power structure, and therefore something that has been really there also when I first relocated abroad (1997) has suddenly become something you can do hard talk on without being ruffling the feathers of political and institutional partners of the last 20 years (do not look at centre, left, right political differentiation- it is not relevant here).
The curious point is that the "casus belli", the TAV, is now following the same path that decades ago was followed when political stances were taken by DC and PCI- two tribes that somebody (not just myself) described as "two churches".
As I posted yesterday on Facebook:
"NOTAM for my foreign friends on #TAV- and yes, the local games in #Turin are even more convoluted than the usual standard Italian games - or any #Olympic #Games
but, luckily, are mainly shuffling around a Potemkin Village
so, just look at the bottom line, ignore the hype and theatrics hidden behind an apparent aloofness: there is plenty of real potential behind all those smoke screens
in Turin say that melodrama is typical of Naples, but, frankly, any external observer that doesn't get carried away by following gossip can see that there is a local variant too (as, de facto, I have been since 1986, even often physically)
albeit it does pretend to be an example of "British Upper-lip stiffened" detachment (while being only detached from reality, what is called nowadays "cognitive dissonance")
as an editor used to say to a correspondent who kept calling and saying "corre voce che..." (I heard through the grapevine- but in Italian is funnier, as it is literally "rumors are running around that...")...
..."chiamami quando le voci si fermano" (call me back when beside smoke you can see a fire, but literally: "call me back when the rumors cease to run around")
now, if all that energy were to be focused on constructive matters using the potential (including that attracted from abroad and churned out by revamped local academia), we would not be here discussing how the Olympic Games 2006 potential benefits were turned just into cafés, restaurants, and empty boxes...
...as the last 15-20 years (the 2006 Games were a work-in-progress already in 2003, when I first prepared to return here) seemed focused just on real estate, as anyway building infrastructure generated enough (short-term) revenue to make the locals happy, also if at the cost of (long-term) debt
but an "investment" does not deliver value unless there is a valuable use- at least potential use
so, today Turin will see a "NO TAV" protest after an earlier "SI' TAV" protest- but, while I am in favour of the TAV, I joined neither bunch of protesters
as it is just theatrics- and politics&business aren't theatrics: it is a matter of bottom line AND (big AND) future-building
so, let the pro- and against-TAV protest
then, let's see around tables what will be the proposals for the future
in Italy, the cartoon from Bruno Bozzetto still holds true...
...negotiations begin AFTER a deal is done ;) "
We had recently a "for" show-of-support public event in piazza Castello, Turin, supported by local industrialists and business people taking on a political role, followed yesterday by an "against" event in the same location, sponsored by opponents to the project and the political movement/party whose Mayor is currently in office in Turin, M5S.
In the end, both have reached more of less the same "impact", and even local newspapers are at last backing off toward a neutral stance.
More than "class warfare", the issue is becoming different models of representation, and different aims/timeframes also within each of the two counterparts, but both share a concept: unmediated representation of interests, as also the "against" side was there before most of M5S joined its side.
Tomorrow I will attend another presentation about innovation and digital transformation: "Le Imprese Innovative dell’area torinese tra trasformazione digitale e sfide globali. I risultati dell’indagine 2018, 930-12 @TorinoIncontra"
It is about innovation and digital transformation- how local innovation-based companies are positioning themselves within the global supply chain.
Again, a timeframe different from that of some of the industries listed above, as "digital transformation" is not just about technology, it is also about building social and cultural ecosystems, integrating digital transformation as one of the elements within any development policy, not as an "add-on".
Innovation and digital transformation require a level of awareness that in Italy many small companies still lack.
The "technical" dimension still overwhelms management/owners in many smaller and family-owned companies that are focused on the "now" and, as I wrote above, being part of somebody else's supply chain, their traditional role.
The "social&cultural" dimension is even more exoterical, for many Italian SME companies.
So, in Turin we have an expansion of the disintermediation of political representation, but it seems that the "silent majority" is actually not represented by either side, as its life is on a different timeframe.
In the past, this would not have been a real issue- a large chunk of the economy was into the hands of businesses whose owners were either the State or various local authorities, and there were resources to "co-opt" most of the others.
Actually, some discussions about business "do" and "don't" in trade disputes in the past few decades in Italy made me think sometimes to a book I read few years ago about how trade disputes between USSR companies were managed and settled.
But now we live in what in Italy is called a "private-public" domain, meaning something different from what I saw often abroad.
Here, the real meaning is having sometimes a party contributing the project capabilities, and the other the financial resources (at least theoretically), as the State and the local authorities have limited or no resources to get a "buy in".
The risk is that in Turin two vocal minorities will try to negotiate an agreement on a development plan that will be simply ignored by those who should put up resources to help it turn into reality.
The side-effect of an economy that lost political points of reference at the same time when leading companies that were the traditional counterparts looked with more detachment at the local economy.
Frankly, in the past in Italy consensus was "purchased" (not necessarily through monetary means), not built or grown organically (i.e. as a natural side-effect of ordinary everyday social/business life).
A real or perceived "loss of control" usually generates a reaction from those not used to it, but the risk is that tools that worked in the previous framework to regain or reassert control will be counterproductive, as there are way too many actors that aren't "aligned" to a single timeframe.
As an example: say that party A is considering a positive element to be able to have a quick turnover with highly educated but lowly paid staff that is available on demand for lack of better local opportunities- no investment in training or "talent retention" policies are really needed; say that party B is trying to foster the development of long-term investment in continuous education using the mantra "it generates sustainable development and ensures an expansion of our competitive advantage as a location".
Do you really think that they are on the same page?
Until there was a shared "glue" represented by political parties and other entities supported by access to State and local public or private benefits to be dispensed, there was a third-party "clearing room of interests".
But when party A and party B have to build their own case in a zero-sum game vs. a third party, probably game theory is a more appropriate framework than anything associated with the old "relational" approach.
Italy is currently into a phase where three main political parties/political entities are in a state of flux, as we are really preparing not just for the next regional/local elections, probably between February and May 2019, or the European Elections should be on May 29th, but the next political elections.
It would require either defining a "neutral" stance that generates losses for all the parties, aiming for a "common good", or something that would be a novelty, in Italian politics (with or without intermediation): a party accepting a loss so that others can gain, and prepare to win the next round.
Therefore, also if it is needed now, it is difficult to identify a potential for a real give-and-take negotiation between all the interested parties before the next six months- just minor adjustments are more probable.
PS on 2018-12-10 (following day): few read the post so far, but probably nobody took note of a small discrepancy...
The 2019 European Parliament Elections have to be held between May 23rd and May 26th, hence cannot be held in Italy on May 29th- also because in Italy nowadays it is customary to hold elections on Sundays, i.e. May 26th. A small test inspired by an article that I shared on Facebook few days ago...