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You are here: Home > Citizen Audit > Seizing the industrial policy opportunity: competence centers and recovery plan in Italy - thinking systemically

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Published on 2020-09-12 18:00:00 | words: 4602

This article is about digital transformation, but I decided that its "series allocation" would be better within the "Citizen Audit"- for reasons that will be clearer later.

Usually when I write about the "Recovery Plan" I state always "Next Generation / Recovery Plan"- as in Italy most focus on the latter and forget that it is within the framework of the former.

In this article, it is appropriate to talk about the "Recovery Plan"- as the reality is that in Italy we are "seeding" many activities, initiatives, etc- but without a discussed, shared, transparent overall plan.

Yes, this article is part of a pre-emptive audit: call it a "risk assessment" (well, specifically, an "encore" on the same risks).

As it befits this series, I share all the information first, and then add a (preliminary) analysis/ideas sharing.

The initiative

Probably you read that the new national competence center for artificial intelligence was assigned to Turin.

This was the statement (in Italian, from a PR reporting about the Government announce):
"L'Istituto Italiano per l'Intelligenza Artificiale (I3A) - si legge nella nota del Consiglio dei Ministri del 3 settembre - coordinerà le attività di ricerca in questo campo e costituirà uno dei tasselli principali della strategia definita dal Ministero per lo sviluppo economico (MISE). Si tratta di una struttura di ricerca e trasferimento tecnologico capace di attrarre talenti dal mercato internazionale e, contemporaneamente, diventare un punto di riferimento per lo sviluppo dell'intelligenza artificiale in Italia, in connessione con i principali trend tecnologici (tra cui 5G, Industria 4.0, Cybersecurity). I settori principalmente coinvolti saranno quelli della manifattura e robotica, IoT, sanità, mobilità, agrifoood ed energia, Pubblica amministrazione, cultura e digital humanities, aerospazio."

Key concepts within the "mission statement":
- to coordinate research activities within Artificial Intelligence (henceforth AI)
- research and technology transfer structure
- able to attract talents from abroad
- able to become a focal point for development of artificial intelligence
- connecting AI with main technological trends (e.g. 5G, manufacturing 4.0, Cybersecurity)
- main industries: manufacturing, robotics, health, mobility, agrifood, energy, civil service, culture and digital humanities, aerospace.

The reported current allocation is 80mln EUR with an expected staff of 600.

Locals talked (and wrote) about a potential economic impact on the territory for 200mln, while others talked about 1,000 staff/new jobs.

Local feed-back and context

Well, I consider this post an evolution, two years later, of "#deploying #sustainable #innovation - considerations on few events in #Turin and #Italy", published on 2018-12-12.

Specifically, the closing paragraphs: 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".

Recently, in Turin there were other initiatives (a manufacturing competence center, an aerospace pole, a health citadel) all focused on acting as both focal points and attractors for foreign direct investment (henceforth FDI) on the territory.

And I am willingly not listing them all- what they all share, is a similar paltry allocation of funds and ambition to become an internationally acknowledge center of excellence by attracting on the territory foreign talent- as if there were no competition and Turin were an open, multinational city.

The first local reactions were more about "slicing the pie" than understanding the "what" and "how", e.g. by various suggestions (some interested, of course) about which vacant building should be renovated to host the new competence center.

Actually, there were various proposals- even to split across the town, to partition by purpose, etc- as if 80mln and 600 people weren't already not that much to begin with, even more if you consider low local salaries and the ambition to attract foreign talent within an industry.

The usual cognitive dissonance that routinely brings the locals to try to set up romantic or personal reasons to retain/attract talent as an alternative to playing by market rules (not just salaries and careers, also research budgets to manage), while hoping to attract resources that are then management locally as if it were a small village where the village elders acted as local treasury managers.

This time, after my previous posts on Facebook and Linkedin, at last somebody wrote in a newspaper something more down-to-earth, on the line of what I published here since few years ago about Turin, and following what was already within a recent book ("Chi ha fermato Torino? Una metafora per l'Italia) about Turin, its decline, and lessons learned that could be applied to the whole country.

As it happens in these cases, it is now next to impossible to share all the voices that mix proposals "Cicero pro domo sua" wrapped into a pretended "common interest", to the contrarian per se (being contrarian is a business, in Italy, to proposals that are suggesting options.

It is the usual "tribal communication", coupled with the current undecided times about what could happen, including the impacts of the NextGeneration/RecoveryPlan.

Hence, a lot of posturing and hedging "just in case".

A common practice also on mainstream media, in Italy: when somebody that used to be powerful start losing power, attacks turn into a mob, just to backpedal instantaneously if the tide reverses; hence, most prefer to continuously "hedge".

Hence, the Italian habit to always check for hidden motives (to gain for your own tribe or yourself, or to undermine opponents) also in bipartisan analysis.

Anyway, I will not repeat what I shared within a short book over two years ago, in 2018 "Just another book on innovation (in Italy)".

You can anyway read more about some ideas and observations on industrial policy in Italy.

Digression: personal experience

This section is a bit of storytelling to share some lessons learned.

When I started reading about all these new and planned competence centers (2018-2020), I remembered something that happened when, after preparing to return to Italy from UK, after "testing the waters" in Rome Turin Milan, decided that it was better to accept to relocate to Brussels.

My attempt to return to Italy had started with an interest in leveraging on my past experiences and continuous learning, by first publishing an e-zine on cultural and organizational change (2003-2005), and implementing a direct marketing campaign I had designed to target specific industries and organizational levels.

Useful: 800+ subscribers (general target: senior management) and 500+ companies (not just in Italy).

At the same time, I tested the waters on three fronts, as I had planned to eventually resettle in Italy: start-ups, potential companies to merge my UK activity with, and accepting also part-time projects in the public sector while also studying local and national authorities to see, if compared with my experience abroad, what was missing.

As I wrote above, for reason that I shared in the past, I decided that it was better to again consider another foreign destination- Brussels, in this case.

I had to wait a bit before I could become free to work full time for any employer, so I had time to, again, test the waters.

It didn't take long to see two elements that, business-wise, were relevant.

First, that the start-up scene was more structured and better financed in Belgium than in Italy.

Second, that anyway on the business side the Flemish side had a cohesion and impact that was way beyond the official "balance of communities" that supposedly had Brussels- no Dutch, no business (at least in my domains).

There and then, decided that I could not expect to work at the level of initiatives I had worked before, as I was an unknown quantity with a curriculum that might seem fake due to its content unmatched by formal degrees, and would be anyway unable to help others develop business, due to my lack of local connections.

Yes, I had learned more about business than many learn in universities or "one-company careers" via political activities for a European advocacy in the early 1980s, then in administrative and logistics/staffing activities in the Army during my compulsory service in 1985-1986, and in various sales and support activities in the first half of the 1980s, before starting to officially work in 1986.

Also because, thanks to my unusual background and willingness to learn and take on challenges, ended up in the late 1980s working across multiple industries directly with managers and senior managers.

Also if I was in my early 20s, and even at 25 looked much younger.

Personally, as in Belgium was entitled to register to vote for local elections, did so, and voted... for the only political party that didn't partition across language and religious lines.

So, beside waiting to close my last activities (stretched until 2008 due to some issues with the company I was supposed initially to merger my company with, but eventually helped only to reposition and restructure suppliers and contracts, etc), I started attending the local start-up scene.

Then, attended also workshops organized by European institutions about e-whatever: e-health, e-democracy, etc.

But also attended other workshops focused on knowledge and technology transfers, e.g. the one about the African Laser Centre.

My aim? To restart as project manager, as I did not know the market, and then, if feasible, rise up again through the food chain.

Funny that in one of the first interview I received instead I was told that I could be a candidate for few board memberships.

Once, blending all the above, applied for a role within something in Belgium that can be described as a mix between the German Fraunhofer and what is the official aim of the new Italian I3A, the new national Artificial Intelligence competence center in Turin.

It was one of the most curious job interviews I have ever had.

The recruiter in Mechelen (nearby Brussels) told me at the end of the interview that, according to her, my purpose in reality was to enter, "shop for customers", and create my alternative competence/technology transfer center.

A curious paranoid perspective that smacked of cognitive dissonance: imagine an Italian, with no degree and no fluent Dutch, but experience across Europe, who emerges from the dark and takes over the market from a structure whose membership and support includes national champions...

...the Attilla the Hun approach to business development- but with zilch budget and no Huns horde in tow.

When I had to return to Italy in 2012, as I wrote in past articles, I was able to see on a daily basis the same kind of behavioral patterns- in my own country and in my own birthplace (where anyway almost never worked full time, in over 30 years).

Quite curious to see then how a different social environment generated different side-effects: back there, anyway the number of "tribes" was more limited.

Here, too many also on any smaller initiative, despite the apparent "us vs. them" mentality that talks of local cohesion, resulting in too many with potential, and too little developing in the open market (those who develop usually have an injection of funding or initial business activities allocation from existing structures).

As a consultant, working around Europe I never saw so many "internal" activities allocated to "temporary" external resources as I saw since the 1980s in Turin- sometimes, the "temporary" extended for a decade or more, also for structural staff.

The meaning of words

Now, read again the summary of the Italian "mission" for the new AI competence center, and read the (partial) list of the competence centers.

As I wrote in past articles, recently often I think about what I said in the late 1990s to a Swiss German partner: already back then rates and salaries in Turin were lower than anywhere else I worked in Europe, and the real willingness to work/relocate abroad non-existing.

So, back then, suggested that would have been better to have a "software factory" in Turin, than using staff from other countries.

Turin still retains knowledge assets generated by the past industrial activities that since the 1980s started shrinking down, not just empty concrete boxes that you can see now, witnessing its past as a company town for automotive but also location of aerospace, electronics, telco, banking national champions.

These conditions, along with the presence of universities that also invested in educational infrastructure thanks to the support of local banking foundations, attracted some big players within the AI business side.

By using the acronym I3A it becomes feasible to keep discussing about the new competence center as if it were a mere local choice, deciding how it should operate.

The full name gives a different, systemic perspective: "L'Istituto Italiano per l'Intelligenza Artificiale (I3A)" (my emphasis).

So, a national structure to support the "extraction of value" (a trendy concept in Italy) from AI across the whole country.

Not in a single town, not in a single or handful of industries.

A couple of systemic ideas

After sharing where we are, where we assume to be, and what is the framework of reference, time to share some proposals derived from data and observations.

This is a map of walking distances within Turin, shared on Linkedin few days ago by Mayor Appendino.

If you think in terms of e.g. AI, mobility, smart city, such a map gives you some ideas about potential products and services, as well as re-distribution of activities and resources.

Then, instead of looking just at how business is going in Turin or its region, Piedmont, let's see this chart presented a couple of days ago by a local newspaper, comparing manufacturing in three key regions in Northern Italy:

Again, the issue is across multiple industries, and multiple areas: the point isn't recover in Turin or Piedmont, but recover in at least those three regions, that used to be "engines" (now Emilia-Romagna is in relatively better shape, but cannot generate enough "pull" for all the country, if the main industrial regions keep stagnating).

As with the "Next Generation / Recovery Plan", the point is to think not about tinkering, but restructuring.

Now, selecting Turin for the I3A, as I wrote above, implies also thinking about what could be the value added- at the national level, not just locally.

So, I would consider a question: do we really need to create another ivory tower that once in a while releases reports and organizes workshops?

Or, as outlined within the "mission", the purpose is "coordinerà le attività di ricerca in questo campo e costituirà uno dei tasselli principali della strategia definita dal Ministero per lo sviluppo economico (MISE). Si tratta di una struttura di ricerca e trasferimento tecnologico"- i.e. to coordinate research and transfer technology?

One of the first point should be considering how to keep the new structure independent from pressure from industry forces, over-represented in Turin (notably multinational "new economy" companies), as should be expected from all the "knowledge arms" of the Ministero per lo Sviluppo Economico (economic development ministry).

In Italy, we still lack the implementation of two concepts: "civil service" and "common good"- it is yet another couple of elements worth investing on, e.g. by expanding the "in-house" capabilities of the former, and creating incentives (yes, why not, also through more "gamification") for the latter.

Just to avoid misunderstanding: "positive" gamification, not "negative"- on the latter, Italy has nothing to learn from China, but dis-incentives, in the end, stifle innovation and expand a local habit derived, in Italy, from centuries of rule by invaders.

Or: "second guessing" replacing "action", so that also any minimal action spreads resources across many options, just in case the power balance changes, and your favorite "action pattern" is not the one preferred by the new rulers...

Artificial intelligence now is not anymore as it was in the 1980s, when I was toying with PROLOG (well, a little bit more than that, as I recycled concept for a couple of decades in other business activities) and reading material on research on its potential applications in business as well as the military.

It isn't anymore about structuring human experts decision-making patterns into "expert systems".

It is more about contextual intelligence and integration in human activities- continuous adaptation.

Therefore, as it was for quality in the 1990s, cannot be added as a separate element, or as an add-on, an afterthought.

As I was reminding a friend a couple of days ago, after the reshuffling within the European Commission due to a commissioner creativity in compliance with COVID-19 rules, we have both in Brussels and Frankfurt, on economic dossiers, a "systemic" view.

Or: in Brussels, both Dombrovskis and Gentiloni are former Prime Ministers; in Frankfurt, Lagarde had "systemic" experiences via both her past political and IMF roles.

The current COVID-19 crisis has already shown systemic impacts also in countries where the real digital transformation had already started long ago (i.e. not just adding technology, but redesigning businesses- including what "work" means).

In Italy, we are still way behind on that curve- and both recent Government Decrees and many proposals for a "sustainable future" smack of a "Maginot line mentality".

Think systemically, just by trying to see from a distance.

While AI as research might well be yet another ivory tower (but I doubt it- hence, my comparison with quality), AI technology transfer requires thinking about applicability, and blending industry-specific with industry-agnostic.

So, my modest proposal is: I know that many would like to have the I3A in a building that is impossible to sell, or in their neighborhood hoping to attract local expenditure.

Personally, I think that the Government highlighted few industries: "I settori principalmente coinvolti saranno quelli della manifattura e robotica, IoT, sanità, mobilità, agrifoood ed energia, Pubblica amministrazione, cultura e digital humanities, aerospazio".

What blends them and AI? Design and design thinking- new forms of products and services, and new lifecycle and supply chain management approaches.

The Turin Polytechnic has various buildings scattered around the town, ditto the university, and, frankly, by having attended conferences and workshops around many of them, and talked with those studying in them, since 2012 I still see too much of a "silo mentality".

Recently the Turin Polytechnic and the Turin University tried to activate a master to try to build a different kind of mindset (actually, "bridge" technology and humanities).

In a town that is considering itself high-tech and manufacturing and creative and focused on the future... did not even get past the single digit needed to activate it, and one of the targets (the endemic small companies) simply did not bother to consider.

Reminded me an old cartoon, stating "se scoprono che mi piace pensare passo un guaio"- i.e. smaller companies do not really like people who think, and often I heard companies looking for funding about innovation, but, at the same time, praising their concept that knowledge is transferred "from father to son".

Which was fine in pre-industrial activities (including pre-industrial agricolture), but...

So, there is much work to do.

Therefore, I would say that probably it is better to rethink using areas that have been in search of a purpose for a while- as a way to enable cross-communication between disciplines that need to think systemically but with a human more than a physical approach (albeit both AI and Design eventually turn into physical reality, most of the time).

And, being from Turin, I think that the investment done in purchasing areas formerly belonging to companies within the FIAT group galaxy should be used to leverage to the unique mix delivered by the physical presence of both manufacturing, management, distribution, educational structures side-by-side.

Disclosure: when I was working on the other side of Corso Settembrini in 2015-2017, I liked to go and have lunch at the Politecnico on the other side of the road.

For two reasons: faster than any other option, so I could then walk.

And a chance to see how things evolved on the academic side, notably in a domain that is borderline between academia and business: I think that, more than "internship", would make sense, in some cases, to have a bilateral integration of activities- but I know of cases already doing so in Emilia-Romagna, as it was said in a convention on Industry 4.0 a couple of years ago, and therefore no need to discuss it here.

The I3A isn't about building in Turin a new small fiefdom that will act at most as a Trojan horse to let few foreign and local companies manipulate national choices on AI (including maybe legislative choices).

Having the I3A in Turin at a time when there are significant national and local changes happen (or even transnational: think about the new ownership of Magneti Marelli and the new organizational structure of Stellantis, or the new initiatives of Fondazione CRT and Compagnia Sanpaolo on innovation) implies having the opportunity for an inclusive, systemic approach toward technology transfer and leveraging on research.

On that side, I was also part of an online community in Brussels that started to keep a connection between those who were beneficiaries of EU funding, but unfortunately, after having attracted the interest also from outside Europe, evolved into something more "silos-oriented": exactly the opposite of what is needed now.

Considering I3A only in terms of building up an ivory tower under the control of one of the various local tribes would be yet another missed opportunity- even more so if it were split across few tribes so that nobody feels left behind and has its own small castle on an island to defend.

My family name means "the lighthouse"- which typically is located on an isolated spot as a "sentinel", but, frankly, I always felt that, in business, my role was bridging, not just build my own castle.

And I think that we need more specialists who can also "bridge", not more fiefdoms.

Also because, in the end, if I were on the business side... I already heard plenty of complaints from businesses stating that our typical small business now has to deal, if in manufacturing or anything leaving behind products and refuse, and having a supply chain, with a long list of "experts" that are associated to different domains of compliance.

Fine if you can allocate a person on each bit, and then have somebody "bridging" them- but if your structure is small, and you end up having to use external "experts" who understand exactly nothing of your business...

...please do not add any more "experts" able only to preach to the choir.

As a recent "Rapporto Rota" reminded- Turin even more than Italy missed few "business development trains", and recently the expected recovery was shifted to 2030- but before COVID-19 struc: now, it is anybody's guess "when".

The amount allocated to the I3A isn't that much- but should be considered a "seed".

And instead of providing a seed and then sitting while waiting for the real budget to arrive as if it were a "manifest destiny" (a local habit), this time the seed and "mission" have been set elsewhere: it is time to leverage on that.

As I said above, I found in Turin in 2012 the same mindset I had found few years before in Mechelen: quite curious, considering that I was born in Turin and have been living and working across Italy, switching town almost on a daily basis, at least until the early 1990s (but already back then I was considered "foreigner").

Therefore, my contribution, while staying here and preparing for yet another relocation, is to share my foreigner/native/immigrant perception of where local reality seems to be heading to.

I am not interested in getting into a local tribe- and, in Italy, it seems that unless you are "tribal", you do not exist: over a decade ago, a funny complaint I heard about somebody was that, despite being from another part of Northern Italy, didn't take that long to understand how Turin was working, and build tribal links.

Funny, as, at the same time, heard complaints about those who arrived from abroad, stayed a little, and then went away.

But in all that complaining, nobody bothered to consider that, if somebody from outside had to "embed" in tribes, and those who did not embed had to go, then the issue wasn't any of those individuals, it was... systemic.

Enjoy your week-end.