Wednesday, May 11, 2005

Swatch Evpatoria Report

Why not innovate?

Because in Italy we are afraid of challenging the status quo.

Today all the Italian ruling class and technological research indicates innovation as the means to overcome the difficulties of our economy. The applicant's argument is that Italian companies are not competitive because they have not innovated in the past. Therefore, to enable our business to sopravvirere, you must stimulate the most innovation.

Now, I'm not saying that these actions are wrong. Surely help our businesses to be more competitive, and CONSET to better survive changes in the global economy. However, from my point of view, have little to do with innovation in general, little will help our economy and absorb little energy and economic policies that are still there to this country.

The error of reasoning is that existing businesses have a value to be preserved as such. But a company should be preserved only if it is able to produce wealth, and after, it is right that it disappears, and that resources invested in it are invested in a new company. It 's the famous "creative destruction", often cited by economists, indicating that if some businesses close, others are born able to absorb workers laid off by companies closed.

Why this does not happen in Italy?

Why in Italy there is the fear of challenging the economic status quo. Some industries and some firms are seen as being to preserve "every costo”, anche quando è diventato evidente che sono imprese antieconomiche, in grado solo di distruggere ricchezza e non di crearla. Esempi recenti, quali Fiat e Alitalia, sono emblematici in questo senso.

L'Italia è un paese dove esistono rendite di posizione fortissime, che vengono preservate contro tutte e contro tutti. E' tipica l'immagine del “nuovo arrivato”, che viene visto con sospetto da tutto l'establishment economico, come un soggetto che non conosce le regole e non sa come ci si muove.

Ma sono proprio questi i soggetti maggiormente interessati a promuovere innovazioni: coloro che devono rischiare (e per definizione le innovazioni sono rischiose) per riuscire a vincere la guerra contro the positions of firms already present in a given market.

If this country really want to use innovation as a lever to promote their competitiveness must first be willing to break down all the positions of profit that are created in our economic system. Only then can truly enable the emergence of new economic entities, capable of producing the wealth that the country needs.