ITALY'S* OPPORTUNITIES INTERIM : MASTER PRECIS

 

Opportunities for Italy : Your special report on Italy gave an accurate picture of the problems the country faces, particularly the ''missed opportunity'' for reform on joining the euro and that the debt problem is fundamentally a GDP growth problem.

Many of the ambitious reforms you advocated are part of the national recovery and resilience plan [PNRR] that was initiated by the administration of Mario Draghi.

But the overall picture you painted may be a touch pessimistic. Taking a step back, Italy has been a net loser in the wave of globalisation that was triggered in the early 1990s.

As globalisation goes into reverse, Italy could benefit. The country has produced few truly multinational corporations.

Whereas Germany and France supported their global industrial champions, Italy's protectionist instincts were propping up lost causes, such as Alitalia, an airline, and Monte dei Paschi, a bank.

An analysis of the degree of internationalisation of the ''blue chip'' companies listed on the Milan Stock Exchange does not compare favorably with the French and German equivalents.

The limited number of global champions and low foreign investment into Italy are a significant driver of relatively poor levels of research and development, salaries and economic growth.

However, the macro picture is turning to Italy's advantage and may provide a tail wind in the next decade. 

The likelihood of creating global champions is low. But the country can compete credibly in attracting foreign investment from the wave of reshoring we are seeing in the euro zone.

Inflationary pressures compare favorably with other euro-zone economies given that Italy is far from full employment, particularly among young graduates. 

And the PNRR is catalysing a step-change in the level and diversity of venture capital and startup activity linked to centres of research excellence.

Thus far, foreign investors seem to be responding.

The World Students Society thanks author Davide Taliente, former adviser to the Draghi administration. London/Rome.