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You are here: Home > Rethinking Organizations > Of #internationalization and #business #social #structure : #Italy and #digital #transformation

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Published on 2019-01-11 | Updated on 2019-04-03 19:15:53 | words: 2363

Ask anybody, read any statistics about Italy- and you will read that its companies are mainly small and tiny companies.

This rhymes with the culture, but it isn't necessarily a negative feature- moreover considering XXI century business trends (but I wrote about this in the past, e.g. you can read here for free).

Over the last couple of decades, technological changes and attempts to optimize costs saw even small and medium companies that are usually considered based upon long-term apprenticeship (e.g. jewelry, high-end fashion) "delocalize"- be it in Northern Africa or in South-East Asia.

Small is beautiful?

Up to a point- as companies with 5-10-15 employees it is doubtful that have even one single employee just focused on introducing anything more than incremental innovation.

The XXI century is complex, supply chains in our century are not anymore a "butter to howitzers" case, and even smaller companies that join global supply chains end up into something structured, complex, and subject to a bewildering array of standards, regulations, and business procedures.

Along with companies, Italy still retains a large number of small villages scattered around mountains and hills, most with a dwindling population since at least the 1950s-1960s (the rebuilding of Italy after WWII, that attracted to new or revamped industrial sites in the plains ranging from Turin to Milan, Piacenza, Bologna and beyond a large chunk of the population from the mountains in the North-West, other from the North-East, and more from the South).

Curious that some of those villages are actually being resurrected by immigrants, that even do resurrect old tradecraft.

Funding from the EU and State is focused on keeping alive those remote communities, as part of our common EU cultural heritage.

Eventually, this "push" added two different ingredients: incentives to create economic zones, and incentives e.g. to enable digital transformation by adding broadband.

Still, market openness remains as in the Middle Ages: by physical proximity and local word-of-mouth through those visiting the location.

And we still have issues about transportation, overall logistics, and lack of comparable evolution within the distribution, as it still adds too much overhead (e.g. while still living there a few years back, I paid in Brussels in a local supermarket some Italian products less than I paid them in Rome in a local supermarket).

A curious side-effect of the incentives is that, in Italy, it is more accessible to obtain access to broadband in the mountains than just around major towns.

Broadband in Italy is scattered- even in Turin is not necessarily to be taken for granted to have access to FTTH (fiber to the home), or in the future 5G (to have broadband speeds).

Most of the Italian companies are small- and usually located outside major towns, and while major towns will eventually get 100% coverage (read my previous posts on the subject, with data derived from public sources), for the time being it is easier to obtain a broadband access in those villages in the mountains where development enclaves have been created, than 20kms from a major town, were in some cases we still have really old infrastructure, so old that even a plain ADSL is subject to occasional interruptions.

Therefore, moving onto the XXI century and digital transformation still miss a basic enabling factor.

Over the last few months, I attended some awareness-raising sessions organized by the Turin Chamber of Commerce, including some co-organized with Google.

Google business pages are interesting- but assume that you know what you are searching, and that an active effort has been done from the company to prepare (with some help) the content of a page thinking about the potential audience.

Frankly, in most cases many small Italian companies and shops have a low digital awareness (not stretching beyond using their own mobile phone to chat on Facebook, Whatsapp, or post on Instagram).

Moreover, using the search facilities provided by Google assumes that demand and offer can be easily matched: fine if you sell pies, but if you sell skills, your potential demand should be able to express the needs in a way that Google can match with specific skills, not just products.

Most of those working in the crafts and living outside major towns that I met have a "product line", but, frankly, except those selling food and furniture or jewelry accessories, that are inclined to create a limited range of products, some of the disappearing yet still useful trades and skills, e.g. those needed for restoration or fine art decoration while renovating historical or new buildings, aren't so easy to match.

A small example that I repeat once in a while to explain how our local, Italian "knowledge stock" might be attractive for a larger market- while those holding and investing on that knowledge often never leave their own village.

While I was living in London at the beginning of the XXI century, an Italian neighbour worked in restaurants to learn English and eventually find a job, but then I saw a wonderful box made up of wood, assembled from various elements, and looked as out-of-place with everything else, so I asked him about it- and he said that he had done it using techniques that he had learned as a trainee, techniques from the XVIII century.

I urged him to prepare a portfolio, and to go and walk around antique shops in a specific area of London.

He became for a short while apprentice in a repair shop associated with an antique dealer, who gradually gave him more complex restoration tasks to do independently- and he obtained a job using his craft, in London, where there would be a market for his skills.

Now, I do not know if he stayed in London- but, in that case, it would have been a knowledge loss for Italy, a "brain drain": you do not need to have a Ph.D. to represent an asset for your country.

Moreover, if he had had a way to keep doing his craft while staying in Italy, working for customers who could have (and share) a value for his skills, while living in his own community, he could have eventually coached others, keeping alive a tradition and knowledge stock going back centuries.

And, maybe, just maybe, eventually earning enough from customers abroad- enough to return something in restoration in his own community just for the sake of keeping enjoying it.

As I wrote repeatedly over the last decade: Italy has too many cultural and historical artefacts, to be able to sustain its maintenance costs- but we need to retain both the "objects" and the "spirit", while accepting that, if we ask for external support of our commons, then we have to share also ownership- it is not anymore just Italian heritage, at the very least becomes part of the EU heritage.

Last year I attended various initiatives on digitalization- mainly to see what was the degree of awareness between small companies, as I already worked on those activities for decades (yes, we had digitalization of processes and activities even before the Internet was opened in the 1990s).

As I shared with others, I was disappointed to see that many of those attending were actually consultants scouting for customers- or to acquire skills to then resell, not to apply to themselves to their own activities.

What is the point of attending an introduction on e.g. SEO or digital marketing if then, in your own presentation, state that you are an expert on SEO?

In my case, the point was to see the level of local awareness, the local skills available on the supply side, and see how to adapt my past experience and current state to develop an online training platform: going around co-working and start-up incubators once in a while, I know that in Italy that are already many experts in all the bits and pieces of digitalization, what is needed is to bridge the gap between what they say, and why their potential audience understand (and need).

Personally, stopped few months ago posting online articles in Italian and converted some book projects in Italian into English-language.

Limited awareness implies a need for a major effort in evangelization, an expensive initiative (as I was involved in other "technology evangelization efforts" since the 1980s), something that could be supported only if you could, as I did over a decade ago, sustain those costs by having access to larger customers.

Unfortunately, in medium/large companies there are too many layers between supply and demand, each one taking a large chunk of the margin.

So, I returned to English, as there is a larger potential market- for the time being, just an author on change as I did since 2013.

First in articles and, after closing the company in late December 2018, officially resuming my online presence just as an author, but, as I like to share knowledge by example, added also a YouTube channel.

I believe that there is a huge wealth of knowledge available in Italy, mostly thanks to the small size of its companies that often still adopt a pre-industrial organizational structure.

The point is therefore to have a way not just to showcase this knowledge, but also to reach potential customers, when that knowledge is not expressed by easily classified physical products or one-word services.

Decades ago, as I wrote within the Theatralis section, I merged by concept to create a "niche" community for performing artists with the idea from somebody else to create a website offering services and a community to art galleries.

I was on the business model and business&marketing planning plus information architecture side, supporting both the one who took on the role of CTO and the CEO.

My first suggestion? Performing artists, as well as art galleries, usually (we were in the late 1990s) had limited or no technical staff, skills, awareness (at the time, even in large Italian companies when I talked about email to managers, either they did not have it, or was a "clerical task" transferred to their secretary).

So, as they needed the onboarding of the few already "in the game", to attract the large majority that wasn't, it would have been a mistake to showcase themselves as a web agency having also a community, as they would have alienated those few (better,their technology advisors, who would have perceived the new entry as "competition").

Creating instead a community offering an easy and free way to have an online presence, including to share art events on their agenda, created a community that had some visibility.

I was on a deferred equity, deferred income basis- something that, frankly, never worked in Italy (I have a collection of contracts).

But, anyway, the company stayed on for few years, I received a couple of rounds of requests for further support in business and organizational development (that I declined- all via email and then discussed in person), and eventually was sold and became part of another business.

Since I became again resident in Italy in 2012, I collected stories and observations about the various attempts to relaunch communities and to create areas of development.

Therefore, as a first step, probably it makes sense an initiative whose launch meetup attended yesterday in Turin.

An affiliation programme that promises to create "niche" communities by sector (e.g. yesterday saw presentation on crafts and heritage, but there are more than two dozens planned communities).

why I do not disclose the name? because the promises and keywords are there (e.g. using AI, blockchain, affiliation programmes), but first I would like to see it in action.

I do not plan to join the affiliation programme, as I did instead for Amazon and others- "affiliation" implies joining and endorsing to a certain degree, and while doing it early might of course deliver greater benefits, would also turn you into an "evangelist", and make difficult then to be an advocate of something or somebody else.

I was actually attracted by the concept of helping crafts reach global visibility, so maybe I will eventually share more information about their results, but if interested, contact me and will put you in touch.

Anyway, the concept contains the potential benefits that I discussed above: if you use technology to "project" abroad local tiny companies and craft-based businesses while leaving them in their own community, you can actually do what long ago did Chaux-le-fonds for watch-making, but on a wide-variety of activities.

As I wrote I think in 2008 or 2009, while living in Brussels, instead of comparing a country with 60 million inhabitants with behemoths of 1billion or more, we should consider that, if just 20% or 30% of the population were to deliver high-end goods and services (from food, to clothing, to high-quality tourist services), our market would not be the remaining 80% or 70% of the Italian population, but that 20%-30% of the 7+billion inhabitants of the World that might reach a middle-class level of consumption in the next couple of decades.

Because that is another point about digital transformation: if many physical and intellectual works are taken over by machines, producing goods could absorb less resources and be optimized, but the human population will have an excess of spare time to be used for other purposes.

Including not just buying physical objects or food or clothing, but also expanding their minds with physical and virtual journeys around the World.