12.2012Science for everyone18

The newface of globalproduction

—INDUSTRIAL

PRIDE—

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Oxygen is an idea by Enel, to promote the dissemination of scientific thought and dialogue.

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editorialboardEnrico Alleva (president)Giulio BallioRoberto CingolaniPaolo Andrea ColomboFulvio ContiDerrick De KerckhoveNiles EldredgePaola GirdinioHelga NowotnyTelmo PievaniFrancesco ProfumoCarlo RizzutoRobert StavinsUmberto Veronesi

editorin chiefGianluca Comin

editorialdirectorVittorio Bo

publishingcoordinationPino BuongiornoLuca Di Nardo Giorgio GianottoPaolo Iammatteo Dina Zanieri

managingeditorStefano Milano

editingCecilia Toso

editorial teamSimone ArcagniArmando BuonaiutoDavide Coero BorgaDaniela MecenateNicola NosengoFrancesca PellasPaolo PiacenzaAlessandra Viola

translationsSusanna BourlotLaura CulverGail McDowell

Industrial pridesummarySm

Industry is security because it is manufacturing, creation, unity of spirit and matter,the body and soul of society; a security thatis undermined today by the global economic crisis. So for Italy – the second largest manufacturing country in Europe – doingthings right is not enough: it must know howto do them better than others. In order to do so, industrial pride must first be restored, valuing work in every role, making space for creativity and initiatives, connecting small businesses through networks and putting the larger onesin a position to meet the new needs and new global technological trends. The key to successis continuous innovation.This issue of Oxygen tells many success stories, at the dawning of what is already being called the “new industrial revolution,” which is going on throughout the whole world andis revitalizing the quality manufacturingof the historically most industrialized countries.

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editorialTHE NEWINDUSTRY

by Giulio Sapelli

scenariosMANUFACTURING:THE ENGINE OF GROWTH

by Giorgio Squinzi

opinionsDESIGNINGTHE FUTURE

by Davide Canavesio

in-depthTOMORROW’S PRODUCTION IN SEVEN WORDS

by Dario Di Vico

“The more advanced nations have once again put the processing industry at the center of their de-velopment strategies. If Italy wants to continue to be an authoritative subject of economic life on a global scale, it can only be through the strength of its industrial system, which is the only area to consider investing in today in order to restart a process of development of the en-tire national system.”

“The sirens singing of a coun-try that must evolve only toward services have become increasingly insistent in these years of crisis. And the prophecies of doom for a manufacturing sector that is no longer competitive and by now on the wane have become more and more frequent. I do not agree with either interpretation. And I say that as a manufacturing entrepreneur.”

In order to outline a present and future scenario of industry, we must first understand the ele-ments that affect it. To understand the industry, let us start with a few words: restructuring, exports, sup-ply chain, business networks, dis-tricts, retail, and trade unions.

«Industry issecurity becauseit is manufacturing, creation, unityof spirit and matter, the body and soulof society»

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Industrialpride

—The new face

of global production

editorialINDUSTRIAL PRIDE

by Fulvio Conti

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scenariosGLOBAL COMPETITIONOF INDUSTRY

by Carlo Marroni

scenariosTHE FIFTH INDUSTRIAL REVOLUTION

by Peter Marsh

contextsA MORE MODERN,EUROPEAN,AND COMPETITIVE ITALY

by Corrado Passera

interview withalberto quadrio curzio THE VITALITY OF ITALIAN PRODUCTION

by Paolo Piacenza

columnTWEETS& QUOTES

passepartoutTHE ADDED VALUEOF INDUSTRY

data visualizationBUSINESS:HOW ATTRACTIVE IS ITALY?

in-depthSHOULD WE PRODUCEFEWER “THINGS”?

by Donato Speroni

contextsBUSINESSES THAT THINK IN NETWORKS

by Aldo Bonomi

The major industrialized coun-tries are moving in search of solu-tions to the crisis; some are slowing down, and others are exploring new territories. Here is an overview of the sectors in which they are con-centrated and the global intercon-nections that affect them.

An analysis of the impending revolution in the manufacturing sector, an overview of the lessons drawn from past industrial revolu-tions and those of the present of economic crisis. And some social and economic benefits that a new revolution could achieve.

“The change in our country has just begun. We have charted a clear path with measures that were able to be taken with the limited re-sources and the limited time avail-able, and today we already have an Italy that is more modern, more European, and more competitive. Now we need to move forward.”

There is still plenty of vitality in Italian industry. Despite the reces-sion and increased competition from the East. Italy is still ranked fifth among the G20 economies for surplus trade of non-food industrial products, after China, Germany, Ja-pan, and South Korea.

Industries will always be produc-ing. What economists are debating is whether we should really be pro-ducing less and, in this case, how to survive, or if instead the world –  as some think  – is able to grow exponentially, like the memory of certain chips.

A resource for creating rela-tions of exchange and support among the companies that have to deal with this current time of economic crisis and changes: the network contract as a guiding tool for aggregation and inter-firm collaboration.

«The completion and upgrading of infrastructure networks, not just for the transport of goods and people, but also for energy and telematics, is essential to start the growth»

«China’s prospects in the worldare centralto the fateof almost all areas of the world, from the United States to Europe, from the Far East to South America»

«The worldis on the brinkof a new era.This shiftin fortunes of the developed and developing world in manufacturing will begin to go into reverse and manufacturingin the rich countries will stagea come-back»

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scenariosA NEW ECONOMICRENAISSANCE THATCOMES FROM SMES

by Andrea Di Benedettoand Luca Iaia

contextsIKEA:SPACE FOR ITALY

interview withnerio alessandriA SOUND BUSINESSIN A HEALTHY BODY

by Pino Buongiorno

About 18% of Italian exports comes from the artisan world. 50% of the SMEs. A rebalancing is happening in favor of the smaller companies that have been able to protect very vertical slices of the market, a reorganization of the geographic markets for the benefit of the emerging economies, espe-cially Asian ones, that have always lived in admiration of Italy and the quality of our craftsmanship.

Today, you can find at least one Ikea store in 40 countries around the world, and in each of them you can find at least one Italian kitchen. Because today, Italy, after China and Poland, is the third largest supplier of the Swedish giant.

How to combine entrepre-neurial and design skills with a healthy lifestyle and diet, and be able to create a successful com-pany. This is the story of Tech-nogym, a leading company in the field of wellness: not a sport but a way of life. And of business.

«My conceptof the entrepreneur has an artistic approach. Let me explain. The craftsman uses his head and hands when making a product. The entrepreneur goes further and adds the heart to the head and hands»

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«The challengewe are facedwith is to bring the small business and craftsmanship to a finished modernity, and it is a challenge for the nation. The growth potential of the sector is likely to be perhaps the only chance we have to restart our economy. A new Renaissance»

«The network cannot be the only solution to the crisis, but should be an instrument of industrial policy made availableto the system for best dealing with an unfavorable period and timeof changes»

contextsOUR KNOW-HOW WILL SAVE US: 10 SUCCESS STORIES

by Daniela Mecenate

The hands of Italian craftsmen and their brilliant and imaginative minds work international mira-cles. And “Made in Italy” products can boast numerous examples of virtuous artisan companies that, with hats, sunglasses, bicycles, and printers, are delivering the mes-sage all over the world.

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scenariosNEW VALUES FOR A NEW INDUSTRIAL REVOLUTION

by Gianluca Comin

in-depthMANUFACTURING 2.0

by Alessandra Viola

in-depthDO-IT-YOURSELF:3D PRINTING

by Nicola Nosengo

contextsTHE MAKERREVOLUTION

by Simone Arcagni

opinionsSTART-UP MENTALITY

by Riccardo Luna

interview with edoardo nesiFEAR OF THE FUTURE? IT IS SOMETHING WE CAN NO LONGER AFFORD

by Armando Buonaiuto

data visualizationWORKERS OF THE WORLD, SPECIALIZE!

oxygen versus co2 TWICE UPON A TIME,THERE WASA CHIMNEY SWEEP

science at the toy store THE HARD WORK THAT DOESN’T SCARE KIDS

In order to overcome the crisis, the decline in the role of industry must be reversed. And to do that, work needs to done on the cultural level as well as on the structural level. In Italy in particular, it is nec-essary to rebuild industrial pride by focusing on values such as the indi-vidual and the environment.

The professions of workers and manufacturers have defi-nitely entered the 2.0 era. The new “hard work” concerns digital manufacturing, ICT, and related technologies that support in-novation, but also robotics and renewables. Oxygen conducted an investigation in these areas, as recounted to us by those who work in them.

“A breath of fresh air for industry could come from 3D printers. Technology and design serving the imagination of the makers to create plastic objects. The age of personal fabrication has not really begun yet, but it may never have been so close.”

“Creative digital and technol-ogy experts, the garage innova-tors who, with their innovations and new business models, are creating what many do not hesi-tate to define the third industrial revolution.”

“When faced with change, the multi-national giants stum-ble and fall.” So in order to keep up with the pace of change, the model to follow is that of the start-ups: because they are the basic unit of the cloud economy, are very adaptable to change, and incredibly effective in doing a single thing.

A writer who has led a textile com-pany for years, and does not experi-ence the factory as an alienating real-ity, talks about the future and trust. And optimistically describes a coun-try rich with youth and potential.

«We are all a work in progress ... Great people, like great companies, are constantly evolving. They are never finished and never fully developed»

«We need to have new ideas and new companies that can use globalization instead of suffering under it. It will take a pact between the generations and it will take years, but it will work. Because if our trust in young people doesn’t work, then it would mean that we really are finished, and that we deserved it»

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oxygen | 18 — 12.2012

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WE’RE CELEBRATING 50 YEARS OF ENERGYAND mILLIONS OF mOmENTS ShARED BETWEEN uS.

SINCE 1962, OUR ENERGY HAS ALWAYS BEEN ALONGSIDE YOUR OWN.

50.enel.com

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WE’RE CELEBRATING 50 YEARS OF ENERGYAND mILLIONS OF mOmENTS ShARED BETWEEN uS.

SINCE 1962, OUR ENERGY HAS ALWAYS BEEN ALONGSIDE YOUR OWN.

50.enel.com

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ContributorsNerioAlessandri— After an education in industrial design, in 1983 (at just 22 years of age) he founded Technogym in Cesena. Today, it is a world leader in products and services for wellness and rehabilitation. He is President of the Wellness Foundation, and since 2004, has been a member of the Board of Directors of Confindustria and Vice President of the Leon-ardo Committee.

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FulvioConti—Managing Director and General Manager of Enel since May 2005, he is a Director of Barclays plc and AON Corporation. He is Vice President of Eurelectric and Endesa and a member of the advisory board of the National Academy of Santa Cecilia. From 1999 to June 2005, he served as CFO of Enel.

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AndreaDi Benedetto—The CEO of 3logic MK (a company that deals with digital images), since 2009 he has been President of the Young Entrepreneurs of CNA (a confederation which numbers 350,000 craftsmen and 25,000 small and medium-sized enterprises) and from 2011 of LinkedOpenData Italia. He is a founding member of Wikitalia and Vice Presi-dent of the Technology Centre of Navacchio.

6DarioDi Vico—A trade unionist for UILM of Turin at the turn of the Seventies and Eighties, he has become a well-known Italian journalist writing for the newspapers “Gazzetta del Popolo,” “Il Mondo,” and “Italia Oggi.” He been with “Corriere della Sera” since1989, writing about economics and politics; he was its deputy director from 2004 to 2009.

7RiccardoLuna—He was deputy director of “Corriere dello Sport” and the first director of the Italian edition of “Wired.” He has written for “Il Post” and “la Repubblica,” for which he served as editor in chief. He was one of the promoters of the Nobel Peace Prize to the Inter-net and is President of Wikitalia. As of 2012, he is a member of the Board of Directors of Oxfam Italia.

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AldoBonomi—Aldo Bonomi, from Brescia, was born in 1951 and is President and CEO of the Bonomi Group. He is President of RetIm-presa (www.retimpresa.it), the agency of Con-findustria for corporate networks, Executive Vice President of Bank Cre.Lo.Ve and a member of the Board of Bipop-Carire since 2002.

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LucaIaia—An expert in integrated design, logic sharing, business combination, corporate social respon-sibility, and sustainabil-ity, he is a national point of reference and the national coordinator of the National Con-federation of Young Entrepreneurs at Crafts and Small and Medium Enterprises (CNA).

8DavideCanavesio—He is the CEO of Saet Group and a leading figure among young Italian entrepreneurs. He was President of the Young Entrepreneurs of Turin from 2010 to 2011 and one of the origina-tors of the first G8 Young Business Summit in Stresa and the G20 Young Entrepreneurs Summit in Toronto.

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GianlucaComin —Director of External Relations at Enel, he is in charge of communi-cations and institutional affairs, nationally and internationally. He is a member of the Board of Civita, of the national board of Confindustria and Unindustria, and in charge of courses in communications at Lu-iss University. He is the author of 2030 Tempesta perfetta. Come soprav-vivere alla grande crisi. (2030 The Perfect Storm. How to survive the Great Crisis).

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EdoardoNesi—An Italian author and screenwriter, he also led the family textile business until 2004. He is the author of Escapes from standstill, Ride with the angels, Rebecca, Children of the Stars, The Story of My People and Our Lives without Yesterday. He wrote and directed the movie Escapes from stand-still and translated the 1,433 pages of Infinite Jest by David F. Wallace.

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13CorradoPassera—Minister for Economic Development, Infrastruc-ture and Transport, he held various positions for CIR, was General Man-ager of Arnoldo Monda-dori Editore and CEO of the Italian Postal Service. From 2002 to 2011, he was Managing Director and CEO of Banca Intesa and, after the merger, of Intesa Sanpaolo.

14AlbertoQuadrio Curzio—Professor Emeritus of Economics at the Catholic University of Milan, he is the founder and President of the Scientific Council of CRANEC and a member of the Scientific Council of the Edison and Eni En-rico Mattei foundations. He is the director of the magazine “Economics. Journal of Analytical and Institutional economics” and the author of over 400 publications.

15GiulioSapelli—An Italian historian of economics, he has been a researcher and consult-ant at institutions around the world and has worked in major industrial companies. Since 2002, he has been a member of the World Oil Council and since 2003, part of the International Board of the OECD for the nonprofit sector. He teaches the his-tory of economics at the University of Milan.

GiorgioSquinzi—Co-founder of Mapei (auxiliary materials for construction and indus-try), he was President of Federchimica, a Director of the Bank of Italy and is President of CEFIC, the European Chemical Industry Association, with 29,000 member companies. As of 2012, he is President of Confin-dustria.

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10CarloMarroni—He began his career in 1988 as a journalist in finance. He was the first editor of the agency “Il Sole 24 Ore Radiocor” and then its director. He currently writes for “Il Sole 24 Ore” as an expert on international politics and economics, and information on the Vatican.

PeterMarsh—He has degrees in chem-istry and journalism, and deals with econom-ics, technology, and the chemical industry. He has written for the “New Scientist” and today is the manufacturing editor of the “Financial Times.” His latest book is The New Industrial Revolution: Consumers, Globaliza-tion and the End of Mass Production.

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illustrations:Elena La Rovere

16Donato Speroni—An Italian journalist of economics, he has worked for “Corriere della Sera,” “World,” and “New Newspaper.” He currently teaches economics and statistics at the Institute for Education in Journalism in Urbino. He writes for “East” and is co-author of 2030 The Perfect Storm 2030. How to survive the Great Crisis.

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n recent years, simply scanning the forums and news on the Internet or glancing at the headlines is enough

for a general picture painted in dark colors to appear. The economic crisis, troubled global governance, overpopulation, lack of energy and raw materials – water and food – are some of the topics that have been endlessly bounced around in public opinion debates in these years. Yet behind all this, a different story can be read between the lines. Limiting ourselves to looking at the actual data, we find that, de-spite everything, the world continues to pro-duce wealth: much more than we ever did. With the exception of 2009, the World GDP has continued to grow, more or less slowly; a loco-motive driven by emerging countries – China, India, and Latin America – which have replaced the United States at the helm of the world economy (World Economic Outlook, International Mon-etary Fund). This trend was confirmed by the forecasts of the consumption of primary energy, with an increase of about 40% between 2009 and 2035 (World Economic Outlook). Contributing to this growth will mainly be non-OECD countries, where the use of energy, due to economic development and the improve-ment of living conditions of the population, will lead to a 90% increase in consumption in 2035. Above all, in China, where in the same year they will use 70% more energy than the United States, thus climbing to second place in the world rankings. The unprecedented and rapid economic development of emerging countries, particularly China and India, has led to an increase in average pay which is 10 times higher than that of the United Kingdom during the first industrial revolution. This growth will enable more than three billion people to join

the middle class by 2030 (McKinsey Global In-stitute). It will be precisely these three billion emerging citizens who will give a boost to the global demand for primary consumer goods, durable goods, and, consequently, raw mate-rials. A revolution that has led to a dramatic increase in connections between people and objects: since 2008, there are more technologi-cal devices connected to the networks around the world than there are people, who by 2020 will number 50 billion (Cisco, The internet of things). Ten years later, in 2030, the cars in circulation worldwide will have doubled com-pared to the current number, just as the level of nutrition per capita and the size of cities, es-pecially for countries in the developing world,

will grow exponentially. It is precisely the big cities that will be the stage to host this change, a phenomenon that is already taking place. Since 2008, the population living in cities has exceeded the number of people living in the countryside: an unprec-edented event, which has re-

sulted in a profound and radical social change and that leads to a continuous urbanization. This extraordinary growth will render the cities more and more sophisticated, in need of an-swers to complex challenges, from traffic man-agement and air pollution to energy efficiency and access to electricity. The cities themselves become laboratories of innovation. And tech-nological innovation is the key to supporting this delicate and complex architecture, allow-ing us to combine sustainability, efficiency, and quality of life through the interaction of three types of networks: those concerning en-ergy, information, and the citizens. A real “con-vergence between bits and atoms,” as defined by the scientist from MIT, Carlo Ratti (If the City doesn’t act stupid, “La Stampa,” May 25,

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INDUSTRIALPRIDE

editorial

Ed

by Fulvio Conti

I

Innovation is the proper means to build

a near future and the means to address the

current situation

2012). Hence, innovation is the proper means to build a near future and the means to address the current situation, acting as a driver for a “new industrial revolution.” This revolution is amplified in the energy sector, especially the electricity system. In fact, a constant over the years is the driving role electricity has played for the social, economic, and industrial devel-opment of communities. Electricity is actually the most practical, effective, and efficient way to meet the needs of a world that is increas-ingly hungry for energy and that, thanks to new technologies, can be produced and distributed in a more comprehensive and economical way to consumers, according to new and innovative business models. In the electrical industry, Eu-rope and Italy have a global leadership over the entire production chain. Enel has developed power plants over the last ten years with record efficiency, renewable energy plants that are more competi-tive, and innovative projects such as the first hydrogen power plant, the most ad-vanced clean coal plant in the world, projects for the capture and sequestration of CO2, the first concentrating solar power (CSP) plant in Italy, electric mobility, electronic meters, and smart grids. This commitment will continue in the years to come, because innovation is an integral part of our vision of the future. Inno-vation is not just about big projects, but also the levers and tools to support the economic recovery of our country. Any technological in-novation always starts from a hardware sup-port, whether it be a micro-chip, a robot, or a 3D printer. Therefore, the manufacturing in-dustry has a great opportunity for rebirth if it will be able to reinvent itself starting from its own experience and the solid foundation that can already be counted on, especially in Italy.

Perhaps our country has been classified too hastily as “low growth,” but there are vibrant areas, with firms that are growing and export-ing. In particular, the manufacturing sector, where the numbers are encouraging: in Italy, in the first half of 2012, one exporter out of two increased sales of their products abroad, com-pared to the same period in 2011. This is a tan-gible sign that the most dynamic companies can be the most competitive ones. A dynamism that can be extended with the creation of a net-work to spread and circulate brilliant “business ideas,” both Italian and foreign, reactivating the entrepreneurial spirit that has always char-acterized our country by pooling youth, enter-prise, and innovation. A connective tissue that

will lay the foundations for the creation and development of new businesses and promote investments in industrial re-search and development. For instance, Enel is doing this through its EnelLab Project, which provides promising start-ups with funding, tools, and environments suitable for

dealing with the global competition. Or provid-ing them with practical assistance through initi-atives that are activated by the universities with the Enel Foundation Study Center. We must not let our wealth of expertise and technical knowl-edge wither, but rather, we need to enhance it. History teaches us that every industrial revolu-tion was driven by new technology, introduced by experienced entrepreneurs in their field who were not afraid to launch into new adventures. That Italy and Europe have a great history, the maturity, and the ability to boost the future and once again become the driving force of the economy is a universally recognized fact. So let us look forward to the future, beyond the crisis, well aware of our capabilities and our size, and especially, of being able to innovate.

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There are vibrantareas, with firms that

are growingand exporting

ou hear talk about industry all around the world. It is like Rossini’s “slander is a breeze,” but this time it is not about

slander, but a return to the truth. The truth of in-dustry and industrial work. The reason for this is both simple and dramatic: the financial crisis that is happening all over the world is much more frightening than the crisis occurring in the indus-trial world. The old world and the new one have gone through major and repeated low-intensity industrial crises that shook the seas of the econo-my between the two great tidal waves of 1907 and 1929, until the third crisis which started in the late Nineties and in which we are still immersed. But in-dustrial crises destroy to recre-ate. Financial ones, however, do not ever recreate anything at all. It is like the difference between DDT and napalm. And this financial crisis from excessive risk and the unlimited greed of the top financial manag-ers is truly scary, because it may never end un-less the machine of financial intermediaries is split in two, dividing the commercial banks from those that do not invest. When you are afraid, you search for safety. And industry is safety because it is manufacturing, creation, unity of spirit and matter, and the body and soul of society. Espe-cially now that the new industry no longer devel-

ops only for commodity supply chains and tech-nology, but also and especially for the scientific, technological, and production clusters where there is a steady decline in the size of the plants and companies while the systemic interrelation-ship between them is increasing, creating new constellations in the sky of industries. The most overwhelming thing about this new industry is the reclassification of the models of authority and power relations. These are increasingly less important because they alone cannot guarantee

an efficient management of the execution of design and pro-duction. Let me explain. Prop-erty is no longer sufficient by itself, as it once was, to ensure industrial implementation. We cannot purchase the essential elements of production. This is because the essential ele-ments of production have be-

come idiosyncratic personal skills that guarantee the flow without redundancy of technology that must have a distinctive competitiveness now. If before, I could gain factors and organize them in a hierarchy through economic transactions, today this is no longer sufficient. You must be able to attract the talents that are the keystone of the new industry that is advancing, thanks to an authority or technological, experiential, and even moral authoritativeness. What character-

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THE NEWINDUSTRY

editorial

Ed

by Giulio Sapelli

Y

Industry is safety becauseit is manufacturing,

creation, unity of spiritand matter, and the body

and soul of society

izes talent is the passion united with skills and abilities. But the real news is that today we want to find and discover this passion in work man-agement as well as in what was once called “ex-ecutive work” and which no longer exists today, because all the workers of the new industry are skilled operators who direct and decide at their work place, just like the manager decides and di-rects in the broader sphere of strategic planning. As the world turns, you feel the gentle breeze of the rebirth of industrial pride that unites employ-ers and workers, professionals and managers, without any of these ancient but ever new social figures losing their crea-tive force. Of course, despite the many cultural barriers against industrialism that ex-ist in Italy, this new industrial renaissance is deeply rooted in our country. We must not for-get that, despite the destruction of our heritage, represented by the large corporation and which occurred mainly in the 1990s, we are still the sec-ond industrial power in Europe after Germany and we cover a much more important role in the world than one would think. Furthermore, we must not forget that this new configuration of industrial pride passes through the myriad threads of a rather composite weave: the large companies (ENI, Enel, Finmeccanica, Postal Ser-

vice, Railways, Aviation), the so-called medium-sized enterprises of the “fourth capitalism,” and the countless small businesses and artisans who are lagging far less behind than is commonly as-sumed. In fact, small businesses and artisans are the depositories of a prodigious wealth of craft skills that are developed in the most diverse or-ganizational populations: horizontal commod-ity chains, where big and little intersect; vertical functional chains, where multiple technologies coexist; archipelagos of skills that are wonder-

ful islands of working capabil-ity and entrepreneurial ability coming together. Everywhere, once again, people are breath-ing the pride of craft, of know-ing how to do things with hands and brain together. We need to make one more effort, though. As families, as parents, and as teachers, we should be

proud even if our children prefer to go to a profes-sional or technical institute rather than get a col-lege degree. This is because I am sure that a good workman-operator, just like a good professional manager, can love reading Plato, Pascoli, Zanzo-tto, and Goethe even if they do not have a degree; or if they do, it is a degree in engineering, seismol-ogy, geology, or biology. This is because the new industry will not be able to be built without over-throwing old hierarchies and unifying cultures.

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Once again people are breathing the pride of

craft, of knowing how to do things with hands and

brain together

Sc

scenarios

MANUFACTURING: THE ENGINE OF

GROWTH by Giorgio Squinzi

Technological innovation is the engine of growth and productivity, and the underlying ba-sis of the economic development of nations. And an innovative system is the heart of the manu-facturing industry. The manufacturing sector contributes to the production of new scientific and technological knowledge more than other sectors, because the companies that are active in the industrial sectors closest to science are the ones that fund and manage the most important research laboratories. They also carry out most of the private research and development, which is the main input of innovative activity, and are more successful than others at using outside knowledge in the company and establishing

collaborative relationships with universities. In Europe, the geographical distribution of the in-novative capacity, measured by the number of patents per capita, follows that of the industrial vocation. The manufacturing sector, therefore, continues to be the “engine room” of growth because the productivity gains of the entire eco-nomic system, directly or indirectly, originate from it; that is, through the innovations that are incorporated into the goods used in the rest of the economy. But the centrality of the process-ing industry in the development of a country is not only measured on the grounds of its capacity to produce innovation. In fact, the processing in-dustry is also the means through which a coun-

“The more advanced nations have once again put the processing industry at the center of their development

strategies. If Italy wants to continue to be an authoritative subject of economic life on a global scale, it can only be through

the strength of its industrial system, which is the only areato consider investing in today in order to restart a process

of development of the entire national system.”

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oxygen | 18 — 12.2012

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try substantially devoid of natural resources can manage to loosen the “external constraint” to growth – namely, its ability to finance the pur-chase of its imports. In the case of Italy, seeing as almost 80% of exports consists of manufactured products, without them it would not be possible to obtain raw materials, starting with energy, the purchase of which is funded by the surplus in its trade in manufactured goods with foreign countries. For all these reasons, the importance of manufacturing activity goes far beyond what the statistics reveal about its direct contribution to added value and employment of the entire

economy. The awareness of this fact is fueling a real rediscovery of the centrality of manufactur-ing in many industrialized countries. The more advanced nations have once again put the pro-cessing industry at the center of their develop-ment strategies. The United States, the United

Kingdom, and France have initiated discussions and taken steps to focus firmly on the revitaliza-tion of the manufacturing industry. Germany has been doing so for some time. But also the emerging economies are running programs ex-plicitly aimed at strengthening their manufac-turing activities. These countries, whether ad-vanced or emerging, are acting on a clear vision of the problem and have shown to be capable of pursuing long-term strategies consistent with the pinpointed objectives. Italy seems to be late. Any political decision made should always be grounded in a vision of the future of the country-system it relates to. Unfortunately, our past his-tory and the very months we are living through now are a case of how this principle is all too often ignored. From one emergency to the next, decisions and measures add up that are unable to go beyond a short-term time horizon, and once the obstacle at hand has been overcome, it is followed by other decisions and other meas-ures guided by the desire to hurry up. A more long-term view is necessary, making it possible to go back to thinking about policy as a tool to guide the future of the country, to rescue it from drifting toward having to choose between either doing one’s duty or following an agenda dictated by urgency, if not by other things. And it is nec-essary that this change of perspective not tarry in taking shape. The major industrial countries that we are dealing with, whether old or new, all have much to teach us from the point of view of the construction of a national system oriented to clear and explicit objectives. Italy’s delay could become dangerous, because already, in an inter-national comparison, our country suffers from

In a world in which “knowing how to do things right” is not enough, because we need to know how to do even better than the others, it is necessary to abandon the logic of passive adaptation to the conditions of the economic context and to actively act as a person who plans their future

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manufacturing: the engine of growth | oxygen

a lack of growth – in manufacturing, too – and lower productivity growth. If knowledge has al-ways been the crucial element of competitive-ness, it has become even more so today. In this key, increasing activity aimed at creating new knowledge and applying its use has become es-sential to strengthening the competitive factors of the country, because once high levels of per-capita income have been reached, the growth of an economy depends on its autonomous ability to innovate. To do this, it is necessary to start from the many strengths that the Italian manu-facturing industry still has, and at the same time deal with the weaknesses accumulated in areas where there seems to be a delay, which are the areas in which innovation is more closely linked to the progress of scientific knowledge. And be-cause innovation is the result of a dense network of relationships between many actors (compa-nies, universities, governmental and non-gov-ernmental research centers), the institutional conditions that facilitate the identification and adoption of technologies and new organiza-tional models need to be strengthened. If Italy wants to continue to be an authoritative subject of economic life on a global scale, it can only be through the strength of its industrial system, which is the only area to consider investing in to-day in order to restart a process of development of the entire national system. The strong man-ufacturing vocation of our territories and the enormous human capital available to our indus-try – too often misunderstood by careless and superficial observers – form the basis of a pos-sible re-industrialization of our economy, which is the only way that the country can escape from

the current situation. The industry of our coun-try has certainly suffered significant blows over the years, but despite the duration and inten-sity of a devastating recession, it has managed to show a resilience that is unimaginable to all those who do not really know our nature. At the same time, with regard to anyone who does busi-ness, it is good to first of all enforce the principle that – in a world in which “knowing how to do things right” is not enough because we need to know how to do even better than the others – it is necessary to abandon the logic of passive adap-tation to the conditions of the economic context and to actively act as a person who plans their future. The line of demarcation between the en-trepreneurs who will be able to manage the in-creasingly vertiginous changes and those who, unable to do so, will be forced to exit the market, is defined by the ability to build, around the “fast response” to the question, a kind of know-how that others do not have. The cornerstone of com-petitiveness will be the skills that the company will be able to develop and its ability to adopt organizational solutions consistent with them.

In Europe, the geographical distribution of the innovative capacity, measuredby the number of patentsper capita, follows thatof the industrial vocation

018

Let us start with an essen-tial fact: Italy today, despite everything, is the second largest manufacturing country in Europe. True, the crisis has accentuated the negative consequences of globalization and we have lost positions of competitiveness because of all the deadweight the country drags into its production system. Nev-ertheless, it is still possible to do manufacturing in Italy, provided that it is of high quality. To do so, we must focus on some key elements.We will start with com-petitiveness. In recent years, the export industry has been the only one

driving the cases of slight recovery in our country. This confirms the fact that our products are stillpopular abroad. Let us get down to specif-ics and look at just one instance: China. For years, China has been a country of outlet for our manufac-turing; and now the good news which many analysts agree with is that for the next 10 years, in the entire field of production of industrial goods and ma-chine tools, China will not be as competitive in terms of technological quality as Northern Italy and Bavaria, the areas of Europe that have manufacturing as their strong point.

Planningthe future

opinions

“The sirens singing about a country that must evolve only toward services have become increasingly insistent in these years of crisis. And the prophecies of doom for a manufacturing sector that is no longer competitive and by now on the wane have become more and more frequent. I do not agree with either one or the other interpretation. And I say that as a manufacturing entrepreneur.”

by Davide Canavesio

Op

019

This, which might seem at odds with the investments in research and develop-ment and global growth in China, is actually justified by the fact that everything that is “production of technological knowledge” of machine tools or indus-trial processes is not only based solely on innovation and strong investment in R&D, but also on decades of accumulated experi-ence, a kind of handicraft industry that cannot simply be bought with money, but that requires decades of work and experience. Experience that only large European industrial areas conserve.This is good news for our country: it means that in relation to China, as well as for other emerging markets, technological competitiveness is still an important weapon on which to focus.In fact, innovation itself can still open large mar-kets: that of energy, for example. When it comes to energy, in Italy we tend to consider only the last part of the supply chain, disregarding the industrial parts that are upstream of the process, in which we are very strong and could be even more so. To offer a concrete case, the com-pany that I head, Saet, has acquired a university spin-off in Padua and for three years now has been work-ing on a new product to make silicon ingots for PV, based on our technology. The investment in research and development of a few million euros is paying off today and we are signing our first contracts with the top five players in the world in markets far from us – and not by chance, once again in China – and, thus, we have created an industry that literally did not exist until now.How did we do it? We have certainly followed

three key points: the focus of the business (with the construction of applica-tions around the same technological focus), internationalization, and the innovation to create products that can serve the market.This case shows that what our country needs is to “unleash” the creative en-ergy of our small multi-na-tional companies. We are full of hidden champions in Italy, so we need to make sure that these businesses can grow on their own along the lines I men-tioned: the focus of the business, the possibility of increasing new applications around it, great support for internationalization, and incentives in research and development.It is true that Italy is in the last place in the world rankings for investment in research and develop-ment; however, it would be simplistic to say that companies should have to be able to move ahead by themselves. A little history may be useful: even the legendary Silicon Valley, the incubator of all the extraor-dinary technological inno-vations of recent decades, grew in the Fifties and Sixties not simply due to the goodwill of the private sectors or the intersection of businesses, but due to strong investments by the United States government for Defense, and later, by NASA. Only catalytic processes of this type are able to channel the energy required to trigger virtuous processes of innovation. The prospect of indus-trial policy is clearly another matter that we, as entrepreneurs and as a country, should think about in terms of a Euro-pean dimension. What our production system really lacks – beyond tax reforms, alleviation of the burden of bureaucracy, or a strong

focus on productivity – is a strong awareness of the need for an indus-trial policy. For nearly thirty years, this industrial policy has not been taken into account by our policy mak-ers; yet, identifying strate-gic areas and channeling our resources, starting with our DNA, could really help our country and be more useful than an abundance of scattered aid. Industrial policy does not mean the entrance of the State into the industry sector; it means providing guidelines and identifying the key strategic directions to move along in orderto give peace of mindto medium- andlong-term investors.When Germany an-nounced that by 2050 more than half of its energy will be produced from renewable sources, this clearly and irrefutably gave an indication of its industrial policy. It is not a question of incentives. Behind such a declara-tion, Germany and the international companies that will invest in Germany know that for the next forty years, this will be one of the drivers of growth in the country and hence, investments, even witha twenty-year payback,are justified. In a country like Italy, however, within three years, the incentives create bubbles which then disap-pear and leave the short-lived companies in ashes, without even halfway sowing a seed for industry in the future. Our country has a strong sense of the construction of material goods, of quality and man-ufacturing in its DNA. And it is in this sense that it has to plan its future, to fully achieve the prospects of the third industrial revolu-tion that awaits the planet, and finally, to increase its competitiveness.

Saet—

Saet for three years now has been working on a new product to make

silicon ingots for PV. Now it is signing its first contracts with the top five players in the world in markets far from us and it

has created an industry that literallydid not exist until now.(www.saetgroup.com)

01 /RE-STRUC-TURING

Tomorrow’sproductionin seven words

in-depth

In order to outline a present and future scenarioof industry, we must first understand the elements that affect it. To understand the industry,let us start with a few words: restructuring,exports, supply chain, business networks,districts, retail, and trade unions.

by Dario Di ico

We have had four years of crisis and the future of our manufacturing industry is still uncertain, to say the least. But rather than persisting with Cassan-dra-like forecasts, it would be worth-while to try to grasp the point of some changes that have already occurred. I have chosen a few key words for the reader’s convenience, a short glossary of the crisis and its consequences in what is still one of the major indus-trial countries of the Old Continent.

Id

RestructuringOnce, companies would undertake re-structuring if there were an emergency, whether financial or due to the market. Now, even small business owners have understood that there is no solution of continuity and a company that wants to stay on the ball has to undergo constant check-ups. There are various (and wel-come) techniques, but what almost al-ways emerges is that manufacturers pay great attention to skills. Even knowing that the crisis demands ruthlessly cutting costs, no one has deprived themselves of personnel by “taking advantage” of the recession; in fact, today’s difficulties have increased the reflection on human capital and its strategic importance. A highly interesting work on restructuring by Cipolletta-De Nardis came out a few months ago, but there is a lack of recog-nition concerning outsourcing process-es and their evolution. The relationship between industry and professions also needs to be evaluated. The affirmation of a Made in Italy tertiary sector that is qual-ified and able to serve the international market (and not only their own region) passes through that very relationship.

The districts have been called upon to enlarge their territory, break down local closures,and extend their networks abroad.Will they be ableto do so?

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ExportsSomeone in the trade union superfi-cially sustained that we would have (guiltily) adopted an export led model. Not quite! Actually, one cannot say for certain that the system has moved ac-cording to a canonical principle but, in the face of the stagnant domestic demand, the way of foreign markets ap-peared to be the only card to play up to the very end. Strictly speaking, we could say that we should have realized it soon-er, because if Germany exports more than we do in the food industry, with no insult intended to beer and sausages, it means that we have been resting on easy honors and have not squeezed out all our potential in exporting our indus-trial culture in the field of food. What is important is what has happened with regard to our attitude toward the exchange markets; the relative weak-ness of Western economies and the thrust of the BRICS could have left us without a leg to stand on, and instead, adaptability has been stronger than the trauma and some important results in the new markets have been achieved.

Business networksThe controversy over the dwarfism of

Supply ChainThe reorganization of companies, espe-cially what could be called “non-defen-sive” reorganization, has certainly not stopped at the perimeter of the parent company, but rather, has invested the whole supply chain. There are many cas-es where this has been a positive process both in terms of efficiency and of social cohesion. The work carried out by at least three majors is highly interesting, two of which concern luxury goods (Guc-ci and Louis Vuitton) and one that deals with large distribution (Ikea); all three have entered into the world of providing a form of partnership in different territo-ries. In some cases, such as the Swedish multi-national, greater attention is paid to the costs, and in others, to the quality. This has allowed suppliers to have more reliable horizons of commitment and to be able to count on interventions by the large company aimed at rationalizing or innovating a particular point in their production cycle. If we take a look at the Italian experience, it is interesting to observe those cases in which an imma-terial item newly motivated the supply chain and innovated it. I am referring to the Salone del Mobile (Furniture Fair) in Milan and Slow Food in Piedmont.

02 /SUPPLY CHAIN

03 /EXPORTS

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In our industrial culture, the cult of the product has too often ledto its laying forgottenon the shelf: just churning out some lovely things is not enough, you also have to get them to the right place at the right time

tomorrow’s production in seven words | oxygen

Italian companies as an insurmount-able obstacle to growth is a waste of time and does not allow us to take a sin-gle step forward. Instead, the business networks can be an important tool, a painless way to aggregations. In this model, the small business continues to feel involved in a process of develop-ment and is not being brutally told to get out of the way, as a study presented by Confindustria did a few years ago which was then cataloged under the name of “T holding.” Today, there are about two thousand companies that are already on the Internet in one form or another, but that is very few, far too few. Not all the representative associa-tions have been as committed as they should have been, and this has created delays. Some banks had promised to help the aggregation process by recog-nizing a sort of rating reward for those who collaborated to increase the size of their company, but on the periphery of all that, very little has resulted and the impression is that banks have a tendency to invest in the pro-SME cam-paigns more than to really heed the territory. Even the bank-firm relation-ship today fails to express its potential value and it is disconcerting that this

question is not the subject of care-ful and self-critical assessment by the ABI, the Italian Banking Association.

Districts The Italian district system seems to have withstood the impact of the re-cession, even if not uniformly. Some areas have paid dearly for their delays in innovation and market reposition-ing (i.e., chairs from Friuli); others have been able to deal with it blow by blow. Of course, I am referring to Sassuolo, which is trying to combine tiles and a green economy, and to the tanning

02 /SUPPLY CHAIN

04 /BUSINESSNETWORKS

Y = C + X - MThe export led

economic model, which was introduced

in the Seventies, sustains that external

demand (as measured by exports) generates

local development through multiplier effects on income and employment.

Exports as an engine of growth of an

economic system.

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05 /DISTRICTS

07 /TRADE UNIONS

06 /RETAIL

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dominated by the need to always churn out new laws. Without the consulta-tion table, Roman trade unionism has lost its core business; it is struggling to change its mindset and anxiously trying to at least indicate its presence. It is an association of the apparatuses. But there is also a territorial reality of structured bargaining that is silent, unified, and collaborative. Often, ter-ritorial trade unions do not even send agreements accorded within a com-pany to Rome for fear that some central official will pronounce their powerful “Nyet!” There are many new features within this multiplicity of agreements, starting with the weight that corporate welfare is taking on, in the wake of Lux-ottica. But very interesting solutions are also found from time to time in the fight against absenteeism or concern-ing salary merit, rewards, and produc-tivity. The territories may give rise to a more modern system of industrial re-lations, proving useful to our recovery.

PS: If we were to substitute the more or less ideological analyses of the fu-ture of our industry with a recognition of the phenomena, the land immedi-ately becomes fertile. And to those who have come to the end of this article, please consider it just an appetizer.

The business networks can be an important tool. In this model, the small business continues to feel involved in a processof development

sector in Arzignano, that has cut down production time and begun developing a fashionable product. According to the North-East Foundation, however, the districts should broaden their outlook so as to enlarge their territory, break down local closures, and extend their networks abroad. Will they be able to do so? The answer lies in their abil-ity to re-specialize, or to cultivate the more traditional or niche market seg-ments, but at the same time to intro-duce new products or concepts. In this case, perhaps there is a lack of accu-rate recognition of what is happening.

RetailThis is a matter in which we Italians are not doing as well as we should. Besides, if we had been better at understanding the bargaining strength of distribution (downstream) with respect to produc-tion (upstream), we would not have stood by while the Swedes created their multi-national furniture empire, mak-ing a mockery of the Italian masters. In our industrial culture, the cult of the product has too often led to its laying forgotten on the shelf: just churning out some lovely things is not enough, you also have to get them to the right place at the right time. Our French cousins could teach us a lot in this area. The Italian groups of large retailers to-day do not seem to be able to expand abroad as Auchan and Carrefour did, and thus, modern trading companies that can act as carriers of the Made in Italy products are lacking. Some inter-esting experiences have arisen, such as Eataly in the “food” sector, but we are still far below the needs and the present situation is not playing out in our favor.

Trade Unions If we put aside the case of Fiat, which is absolutely eccentric, it is increasingly evident that there are two systems of industrial relations in Italy. One is Ro-man and the other is territorial. The first thrives on more or less bombastic interviews, on mediation within the individual confederations, on a debate

tomorrow’s production in seven words | oxygen

In the last year, Italy has proven in many ways to be an interesting and effective laboratory among the European Union countries and in the world. At the end of 2011, we were a country that was dangerous-ly slipping into a crisis potentially dramatic enough to risk losing national sovereignty. Today, after a year of hard work, we have regained international credibility and are once again playing a leading role in the EU and at all the major global tables. The Monti government has managed to achieve the profound change in our country by acting decisively through structural reforms – such as the moderni-zation of the pension system and tax reform – and by, first and foremost, making our public finances secure. This fundamental result was possible thanks to the commitment of everyone – govern-ment, parliament, social partners – and the sense of responsibility shown by Italian citizens. Starting from the first act of our government, “Save Italy,” we have tried to jointly carry out strict policies and growth-oriented reforms. During these months, we

have gradually implemented a real agenda for sus-tainable growth that has touched upon and re-newed the main elements of the structural weak-nesses of our economic system and the main levers that can make our country more competitive and therefore better able to grow and create jobs. All the chickens had come home to roost because of many years of inaction. Italy can return to growth by solv-ing – as is being done – the accumulated problems and taking advantage of many of our strengths. Our economy is very diversified and we have not made the mistake of neglecting everything else in favor of services alone. It is not by chance that we continue to be the second European manufacturing country after Germany and one of the leading exporters in the world. Italy is the world leader in areas that can only benefit from globalization, such as mechani-cal engineering and automation, food, the fashion system, and the house system. But there are posi-tive prospects coming from various other sectors of our traditional strengths, such as tourism and the

Co

contexts

A MORE MODERN, EUROPEAN, AND

COMPETITIVE ITALYby Corrado Passera

“The change in our country has just begun. We have charted a clear path with measures that were able to be taken with the limited resources and the limited time available, and today we already have an Italy that is more modern, more

European, and more competitive. Now we need to move forward.”

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world of health. We do not lack entrepreneurial en-ergies; private debt – of both households and busi-nesses – is contained, while the total wealth of Ital-ian households and their saving capacity, albeit smaller, are elements of strength. Our banking sys-tem is more solid than elsewhere and has not led to either rescue operations or costs for taxpayers, through both financial crises. Unlike many other countries, we do not have to recover from any finan-cial or real estate bubbles. On this basis, we have begun to create a more modern and competitive country, providing it with an ecosystem of rules ori-ented toward facing the new challenges of interna-tional markets. Some of the competitive disadvan-tages that we have tackled in a significant manner include energy costs, the infrastructure gap, the lack of liquidity and credit, especially for small and medium-sized enterprises, and the bureaucracy. Energy: the liberalization of the gas market and the separation of ownership of SNAM from ENI, and the reform of the system of incentives for renewa-ble sources are already a reality and are key points of the new National Energy Strategy. Through the NES – now in consultation – we charted the path that our country will have to follow concerning energy poli-cies from now until 2020, significantly reducing our energy bills and dependence on foreign sources. Infrastructures: we have completely reformed the regulations sector, introducing radical simplifica-tion and speeding up the time required for the ap-proval and execution of works. Through the CIPE (Inter-ministerial Committee for Economic Plan-ning) we have released resources for almost 40 bil-

lion euros, opening or keeping open many con-struction sites and ensuring thousands of jobs. With the introduction of project bonds, we have provided the country with an innovative financial instrument that, among other measures, will allow us to attract private capital in the realization of stra-tegic projects. Credit and liquidity: this is one of the fronts we have been working on right from the start, providing companies with 20 billion euros of credit guarantees from the Central Guarantee Fund of the State, making it possible for companies to offset re-ceivables and payables with the public administra-tion, and introducing the VAT regime for Cash. As of January 1, 2013, every new supply payment must take place within 60 days, as a result of the EU direc-tive on payments that we implemented last Novem-ber, the first of the major European countries to do so. It is certainly an important step forward in mak-ing our country more “normal.” Bureaucracy: we have launched an important series of simplifica-tions for citizens and businesses, mainly working with trade associations. This is the route we need to take more and more, to increasingly lighten the weight of the government where it is not needed, eliminating unnecessary intermediaries and veto rights that are so commonplace today, and clarify-ing exactly who does what within a much lighter institutional framework than our current one. We have also worked hard during the year to consoli-date the two main levers of business development: internationalization and the ability to innovate. For this reason we have strongly reformed and devel-oped a system of instruments for supporting com-

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a more modern, european, and competitive italy | oxygen

panies in foreign markets. This system now oper-ates under the coordination of a control room pre-sided over by the Minister of Foreign Affairs and the Minister of Economic Development and is shared, finally, with all the players who have acted for many years without being sufficiently coordinated: the Ministry of Agriculture, the Ministry of Tourism with ENIT (National Tourism Agency), the main trade associations, the Regions, and the Chambers of Commerce. The ICE (Italian Institute for Foreign Trade) was reconstituted on a new basis and with a well-defined mission. We have also initiated the ra-tionalization of our foreign networks through greater integration between the embassies, consu-lates, ENIT offices, Chambers of Commerce, and the ICE itself. In order to attract foreign investment, the establishment of a so-called “Italy Desk” has been envisaged: that is to say, the creation of a sin-gle point of access for international investors. The same operation of system coordination is now hap-pening with the financial support for internation-alization, and the transition to the Deposits and Loans Fund of both SACE and SIMEST can be seen in this light. Two instruments of great importance concerning innovation are currently being evaluat-ed by Parliament: the Italian digital agenda and the development of start-ups to open up a new frontier of “doing business.” The digital agenda is a refer-ence to industrial policy through innovation. Reset-ting the digital divide, starting ultra-wideband ser-vices, and digital services of the public administra-tion to citizens and businesses are the cornerstones of this important reform of European breadth. As

for start-ups, we have created a regulatory environ-ment that is one of the most advanced and benefi-cial for the creation of innovative businesses: re-duced bureaucracy and very low initial costs, bene-fits for the first four years of operation, with tax in-centives attached, a more streamlined and flexible contract of employment, the possibility of involving employees in the capital of the company, raising funds online, and a bankruptcy law that allows the entrepreneur to start over more easily. Artisans can be at the center of this new model. Combining Made in Italy know-how with technology is one of the routes for the development of the manufactur-ing industry. Italy holds many cards that it can play to this regard. We intend to move forward along this road, and as soon as our resources will permit it, we believe it is important to provide our entrepre-neurial system with a tax credit to encourage invest-ments in research and innovation. Finally, another positive result to note is the agreement reached a few weeks ago by the social partners on productivi-ty. This is an important agreement which will help recover a spread that has greatly expanded in recent years. The government has made nearly 2.2 billion euros available for reducing taxes on wages linked to productivity, illustrating the importance we at-tach to company contracts that increase productiv-ity. The change in our country has just begun. We have charted a clear path with measures that could be taken with the limited resources and the limited time available, and today we already have an Italy that is more modern, more European, and more competitive. Now we need to move forward.

We have begun to createa more modern and competitive country, providing it withan ecosystem of rulesoriented toward facingthe new challengesof international markets

In

interview

In this interview with Oxygen, Alberto Quadrio Curzio – President of the Class of Moral Sciences, History, and Philosophy of the National Academy of Lincei and of the Center for Research in Economic Analysis (CRANEC) of the Catholic Uni-versity – confutes a few of the clichés about the health of the domestic indus-try, but insists that the only direction Italy can take is the one indicated by the European Union: more research, infra-structures, and energy. Basically, a more favorable context for those who produce. Quadrio Curzio recently co-wrote a book with Marco Fortis entitled In-dustry in the 150 years of the Unifica-tion of Italy. Paradigms and protago-nists, published by Il Mulino in the Edison Foundation series. This long-term analysis is very useful to reconstruct a picture with the correct proportions.

What design emerges, Professor? And what is industry in Italy today? First of all, this analysis indicates that Italian industry has contributed not only to economic and social progress, but also to political-institutional pro-gress according to the directives of im-portant figures, from Quintino Sella to Giuseppe Colombo. From the Re-naissance up to the present, the situ-ation has obviously changed greatly. In particular, in the second half of the twentieth century, Italian industrial capitalism was modified by a scarcity of large private and public groups, and the subsequent emergence of small businesses and their districts. More recently, the medium and medium-large businesses, also known as the “fourth capitalism,” have established themselves. The manufacturing in-

dustry, however, is still the most com-petitive part of the Italian economy.

Are some sectors suffering more and others less, and if so, which are they? And how do we avoid losing pieces of productive assets and the pace com-pared to other countries?Italy’s strong points are mechanics, food, furnishing, textiles and clothing, and design, according to the trade sur-plus. The term-concept “Made in Italy” that was coined for these manufactured products could be accompanied to-day by that of “Italian Made,” because many Italian companies are also strong in their production abroad, but have not lost any of their Italian characteri-zation. If Italy wants to be among the largest in the manufacturing world, its growth will have to rely even more on

THE VITALITYOF ITALIAN

PRODUCTION interview with Alberto Quadrio Curzio, by Paolo Piacenza

There is still plenty of vitality in Italian industry. Despite the recession and increased competition from the East. Italy is

still ranked fifth among the G20 economies for surplus trade of non-food industrial products, after China, Germany, Japan,

and South Korea.

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quality, so that it may find strength in the medium-sized businesses because the small businesses cannot make a go of it alone. Today, Italy is ranked fifth among the G20 economies for surplus trade of non-food industrial products, after China, Germany, Japan, and South Korea. It must not lose this position.

Some districts continue to show a bit of life. Can we consider them funda-mental for Italy also at the beginning of the 21st century?The district as a socio-economic terri-torial system may still hold, but it must also be accompanied by business net-works, which are non-territorial dis-tricts built on sectorial or cross-sectorial complementarity. This is to increase their functional size without sacrificing the business subjectivity that weighs heavily on entrepreneurs. The 2009 regulations, recently finalized by the government, are very useful for such purposes. I think the Italian difficulties in making the size of business grow can be at least attenuated – if not overcome. In particular, when there is a medium to large company at “the center” of the “business networks” required by law.

Which factors would you highlight, in comparison to Germany?Italy’s North-East-Center (NEC, as Fua called it) has an industrial vocation that is very similar to Germany’s, while it dif-fers from the latter in that it does not have many large groups. However, our country is dualistic. More precisely, the North-West (with 1.7 million employees in 2007) and the North-East (with 1.3 mil-lion employees) are the first two macro-manufacturing regions of the European Union. They have more employed people than North Rhine-Westphalia, Baden-Württemberg, or Bavaria. Impressive numbers that confute many clichés. The economic and legal context in which businesses are operated in both countries are quite different. Rather than focus on a comparative analysis, I would like to try to outline the margins for improvement. As shown in the re-cent report of the European Commis-sion (Member States Competitiveness Performance and Policies 2012 and at-tachments), among the weighting fac-tors are inefficiency in the public admin-istration of civil justice, corruption, and fraud. These are all factors that place us below the EU average. In addition to the heavy tax burden, we are paying for another burden: Italy ranks among the worst in the EU for the quality of its in-

frastructures. This problem has obvious impacts on industrial competitiveness.

A weak point is research, both public and private: there are exceptions, but the overall picture is not encouraging. Is it only a problem of resources, or also of strategy and courage? According to the available Istat data, our spending on research and development in recent years (2006-2011) was around 17 to 19 billion euros. More than half of the expenditure was incurred by the business sector. That said, it is impor-tant to place Italy in the European con-text. On the whole, Italy spends 1.26% of its GDP on research and develop-ment (2010 data). The EU-27 average is 2%, with some Scandinavian countries reaching peaks of over 3.5%. Other ma-jor European countries such as Germa-ny and France record much higher levels than Italy, 2.82% and 2.26%, respectively. The problem of scarce resources in-vested in R&D is a constant for Italy. Between 2005 and 2010, the percentage of expenditure to GDP increased from 1.09% to 1.26%. At the same time, the EU average increased from 1.83% to 2%. This progress is too small to meet the objectives of the “Europe 2020” strategy, which sets the target at 3% (1.53% being Italy’s). There needs to be a change be-cause without investments in research and development it will not be possible to follow the path of growth nor to main-tain our competitiveness compared to Japan, China, and other emerging countries. But having few resources, the change must be in the use of the investments, and then come about through strong selectivity of spending.

Let us move on to the role of the pub-lic and the weight of macro-economic factors. The action of fiscal consolida-tion of the Italian government and the choices of the ECB seem to have initi-ated a positive way to reduce financial risk: how much is it and how much does the containment of the spread weigh on Italian industry? As we know, the crisis was born and raised in the USA. And between 2008 and 2009, Euroland (EMU) believed that the crisis would have stayed there. In-stead, in 2010-11 it became full-fledged. It was only in this year that many in-novations that had been painstakingly built since 2008 gained strength in the EMU. There were many weaknesses in the institutional framework of both Europe and Italy. All this also reflect-ed on the macro-economic variables.

If Italy wants to be among the largest in the manufacturing world, its growth will have to rely

even more on quality, so that it may find strength

in the medium-sized businesses because the small businesses cannot

make a go of it alone

5th COUNTRY OF THE G20

Trade surplus for non-food products

30 MILLIONManufacturing

workers in Northern Italy

EU PRIMACY The North-East and North-West of Italy

are the first two macro-regions of EU

manufacturing

033

the vitality of italian production | oxygen

an active strategy that needs to be based on two pillars: infrastructures and in-dustry. First of all, the completion and upgrading of infrastructure networks, not only for the transport of goods and people but also for energy and telematics, is essential to start the growth. The pri-ority therefore – for the whole economy and for reviving the industry – is invest-ment in strategic infrastructures. The European Commission has estimated fi-nancing needs for the years and decades to come. And they are huge: for energy, 1 trillion euro by 2020; for transport, 1.5 trillion euros between 2010 and 2030, of which 500 by 2020; for telecommunica-tions and broadband, 270 billion by 2020. Therefore, the Commission’s initiatives are appreciable, such as the “Connecting Europe Facility” and the “Europe 2020 Project Bond Initiative,” in which the Eu-ropean Investment Bank has a key role. Infrastructure investments should also be accompanied by those involving Eu-ropean industry. According to the Eu-ropean Commission’s communication A stronger European industry for growth and economic recovery, industry should be at the heart of the European growth plan. The goal is to bring the weight of

European industry from the current 15.6% to 20% of the GDP by 2020 through these directives: investment and in-novation, market expansion (domes-tic and international), access to credit and finance, human capital and skills.

Another important element is the an-nounced national energy plan.What should Italian industry ask of the government? Italy needs a national energy strategy placed within the European and inter-national context in which its major en-ergy companies operate. In compliance with the rules on liberalization, there is a problem of energy security that can never be overlooked. This is why the fact that Enel and Eni have remained outside the control of the government is impor-tant, as is the fact that the directors of these companies have been confirmed by governments of differing majorities. It is a sign that their international cred-ibility is significant. In any case, the Ital-ian energy problem to keep in mind is the geo-economic profiles for the de-velopment of trans-European networks and supply, through the wider Mediter-ranean and extending to the Middle East.

Now a faint light at the end of the tun-nel can be glimpsed, but there is still much to do to bring the crisis to an end. It is not enough that the interest rates and spreads of Italy (and others) have fallen. Certainly, having a spread of around 350 basis points from a peak of about 550 is also a result of the Mon-ti government, which has once again given credibility to Italy in Europe. It is also thanks to Mario Draghi that impor-tant signals were given to the markets. The injection of liquidity by the ECB of 1,000 trillion euros with LTRO (Long Term Refinancing Operations) inter-ventions and then the prefigured OMTs (Outright Monetary Transactions) have restored stability to the banking and financial system of the EMU. There is still the problem of credit to businesses.

Austerity is not enough: the companies are saying it and even the European Com-mission has long expressed the need to focus on the revival of long-term invest-ments in transport infrastructures, logis-tics, intermodality, energy, broadband, and next-generation mobile networks. Would all this help Italian industry? I think it is essential to immediately have

oxygen | 18 — 12.2012

034

“A third revolution is underway. Production is becoming digital”

@TheEconomist

“Where will the job opportunities come from? From small businesses, industry,and clean energy” Bill Clinton

“Now that CAD systems are so easy to use, the new frontier is Design for Manufacturing. It is what turns a maker into a producer”@chr1sa (Chris Anderson)

“If economic activity shifts from manufacturing to the creation of knowledge and services, innovation becomes a survival strategy” @JeremyScrivens

“It doesn’t matter if the Dow is at5,000 or 50,000. If you are an

entrepreneur, it is always a good timeto start a company”

@GuyKawasaki

“Here’s my plan for the next four years: make education and training a national priority; building on our manufacturing boom; boosting American-made energy. That’s the right path” Barack Obama

Tweet& Quotes

opinions

edited by oxygen

Op

TWITTER TRENDING

TOPICS—

All time:Manufacturing: 2.037.967

Industry: 14.332.383 Innovation: 6.465.618

035

“Encouraging discussions in the world of industry is a good way of opening the doors to innovation”@AmadeusITGroup

“Emerging businesses and start-ups are driving industrial innovation” Som Mittal (President of NASSCOM)

“Now that industry is experiencing a renaissance, manufacturing companiesare thriving in America” @NBCNews

“The future is not General Motors,General Electric, General Mills, but companies called Local Motors, Local Electric, and Local Mills”@doctorow (Cory Doctorow)

“Big industry being influencedby the culture of start-ups”@fullo

“In 20 years, in the timespan of one generation, we can double the GDP. This is

our challenge as entrepreneurs” Jacopo Morelli (Vice President of

Confindustria and President of Young Entrepreneurs)

“Italy is the second largest manufacturing nation in Europe after Germany, but if we didn’t have such high production costsand taxes, we would be the first” Vincenzo Boccia (Vice President of Confindustria and Presidentof Small Industry)

“Italian manufacturing helps the micro-business safeguard a chain of excellence

that is Made in Italy” @GiornaleLusso

“Less bureaucracy, more incentivesfor opening new businesses. You cannot get out of the current difficulties without starting to really investin the young generations” Alessandro Benetton

Global competitionof industry

scenarios

The major industrialized countries are movingin search of solutions to the crisis; some are slowing down, others are exploring new territories.An overview of the sectors in which theyare concentrated and the global interconnections that affect them.

by Carlo Marroni

There was some news in recent months that practi-cally went unnoticed. The largest bookstore chain in the world, the American Barnes&Noble, which tallies 689 stores, avoided recording a decline in sales in its financial statements thanks to the boom of the Fifty Shades trilogy. Nearly 30 million copies, the most books sold in recent history, even more than Harry Potter, then considered incompa-rable. A coincidence? Maybe. But it certainly also signals an economic phenomenon that is being studied not just by those who deal in books (and who rejoice, seeing as there are still readers who go to buy at bookstores). Globalization has flattened the world, as Tom Friedman described it so well years ago, and has allowed us to level the gaps and accelerate the spreading of trends. For better or for worse: first growth, then the crisis. Which since 2007 – the year of maximum overall expansion in the post-war period for the entire planet – has been spreading progressively into the deepest folds of the real economy. But globalization now makes the value of excellence even clearer, as something which will trigger the recovery of the general econ-omy and its transverse segments (districts, na-tions, macro-areas, continents). Similar to what happened to America’s largest bookstore, it will have learnt a lesson from The Shades experience for its business in the future. And it is precisely from the United States (where the main aspect of the crisis developed with the mortgage crisis, which was initially underestimated on Wall Street and in Washington, but also in Europe because of the specificity of “easy” American mortgages) that signs of a recovery seem to be coming, both con-cerning the GDP and the real estate market. But everyone is warning that this is a fragile and mild

Sc

recovery, seeing as it has to dispose of the indiges-tion from debt that weighed upon American fami-lies in the decade of 1995-2006, the real motor of a system based over 70% on domestic consumption. For now, the push is coming from government spending, while the profits of Corporate America have disappointed shareholders. Analysts agree: the U.S. locomotive will resume running only if there is a gradual decline in unemployment, which in some sectors – such as construction – will have to come to pass through redevelopment, seeing as re-absorption does not seem likely. The most con-crete perspective for the U.S. economy is to bring production units which were outsourced years ago, especially to China, back to the homeland as soon as possible. Now, production in the former Middle Kingdom is no longer so convenient. On the con-trary. And alongside the activity of manufacturing and services, in America there is a very strong in-crease in revenue from the industry of extracting hydrocarbons, particularly shale-gas, which is making the United States almost self-sufficient in the supply of natural gas. And then there is China. The prospects of the world’s second economic power are central to the fate of almost all areas of the world, from the United States to Europe, from the Far East to South America, some of which be-long to the exclusive club of the BRICS, the group of new economies (Brazil, Russia, India, and China, to which South Africa has been added) – and to which Turkey can be associated in different capaci-ties – which have driven growth in the past decade. Now, everyone is inexorably slowing down, and everyone is trying to find an original and effective way to prevent the tumultuous growth from turn-ing into a bubble. Since the beginning of the year,

037

—United States:

shale gas—

653 billion cubic meters of gas

produced in 2011

—Russia:hi-tech

industry—

300,000 people work in the

high-tech industry in Russia

—China:clean

technology—

Between 2010 and 2011: +29%

investments

—Brazil:

automobiles—

3.31 million cars produced in the

last year

oxygen | 18 — 12.2012

038

China has been growing at a rate of less than 8%, a dizzying percentage for the West but which in those parts means being almost stagnant if you think that in the fateful year of 2007 (IMF data), it recorded +14%. All this has resulted in a vertigi-nous rise in labor costs, to the point that, for new investments, Chinese companies now outsource to Vietnam and Burma. The new five-year plan, which will accompany the party congress at the end of the year when the new leadership – led by Xi Jinping – for the next decade will be revealed, will focus increasingly on products with high added value (and fewer cheap ones) and, at the same time, on a strategy that is oriented less toward exporting and more toward satisfying the domestic demand. In particular, also given the chronic shortage of raw materials for energy to meet the demand, it will be strongly focused on the production of electric vehi-cles and all technologies related to the green econ-omy. Alongside China, there is India, which also has experienced double-digit growth rates, high-lighting particular excellence in terms of informa-tion technology. But the great productivity boost has not been able to bridge the infrastructure defi-cit that afflicts the subcontinent, which slows the transit of goods and the flow of foreign investment. And in fact, the creation of high-speed railway lines will be one of the guidelines of New Delhi’s eco-nomic policies. Which are also discouraged by the exceeding difficulty in doing business (the power of interdiction by local authorities is still very high), an excess of statism, and the backwardness of the retail trading system that prevents the emergence of large retail chains essential for channeling the production of other areas of the immense country. Overcoming the crisis thus passes by way of struc-tural reforms, but these must overcome the politi-cal hostility. Even Brazil, an ever-increasing power in energy and agricultural production, is marking time: after dizzying growth – in 2010 reaching 7.5% – its economy is now traveling at a modest +1.5%. The main cause is the slowdown in China, its main export market especially for raw materials. In addi-tion, like the other BRICS, Brazil, too, must take into account an increase in the cost of living and of work that clashes with an inflexible production structure, given the government’s strong presence in the economy. Furthermore, the real is over-rat-ed. The combination of these factors is fueling the temptation of the federal government to increase tariffs to outsiders, a matter that is considered un-likely, however, given the two key events that await the country: the organization of the World Cup soc-cer championships in 2014 and the Olympics in 2016, for which an expected boost to the GDP is taken for granted. In any case, the automotive in-dustry is one of the leading sectors that Brazil is counting on in order to trigger a new virtuous cycle of growth. As far as Russia is concerned, even Mos-cow is working to diversify its economy, which is too dependent on exports of oil and gas. The post-crisis challenge is to create a solid industrial struc-ture of high added value, especially in high technol-ogy, as evidenced by the project for the creation of

The most concrete perspective for the U.S. economy is to bring production units which were outsourced years ago, especially to China, back to the homeland

—Japan:green

economy—

483 billion dollars in planned

investments for the next 20 years

039

Skolkovo, the Russian Silicon Valley. Japan, the former second world economy, is undergoing a profound transformation in its traditional struc-ture. The large conglomerates (brought there in the Eighties and early Nineties) that operated in al-most all areas have long been in crisis: large-scale diversification no longer pays off, and the ongoing challenge is the refocusing on specific areas of core business. In addition, the accident at the Fukushi-ma power plant and the subsequent decision to abandon nuclear power (at least partially) is al-ready pushing Japanese companies to shift pro-duction into the same areas where the Chinese are headed. At the same time, the government’s inten-tion to focus on technologies and renewable ener-gy applications is clear. In Europe, where the exit from the crisis has aspects and dynamics that are quite specific due to the euro currency, Germany also dictates the agenda in maintaining the su-premacy of the manufacturing industry, which nevertheless is marking time, especially in exports to China, where it had reigned supreme in luxury goods for years. In Germany, the excess savings have not been reinvested in the country, and thus the industrial system (which therefore cannot rely on substantial capital loans on a domestic basis) must defend its competitiveness by raising the lev-el of domestic production in terms of quality, re-search, and innovation. And in parallel, it is consid-ered essential that the process of upgrading the workforce through investment in education be successful (the federal budget shows an 11% in-crease in 2012 in this regard), to increase the su-premacy of high-end manufacturing. France has a head start in domestic research and innovation, also with a model of targeted outsourcing on the markets that will best protect it. But beyond the Alps, the situation is difficult: confidence is falling, orders are taking a downturn, and there is a high degree of uncertainty, exacerbated by the super-tax on the “super-rich.” Furthermore, the model of large retail chains, the traditional marketing chan-nel (also abroad) to a large segment of Made in France, is in crisis, especially in the agriculture-food sector. Finally, there is the case Africa: the IMF estimates that, over the next 30 years, six of the ten countries with the highest rate of growth will be in Africa, where by 2060 – an estimate by the World Bank – a middle class of one billion people will have been formed. So, as well as Nigeria and Angola – “oil” countries – and South Africa, which by now has become the continental locomotive, we have to keep in mind Ethiopia, Mozambique, and the entire Maghreb area. Areas that will inte-grate more and more with each other, with privi-leged relationships, as well as with China and with the MIST countries (a newly-minted neologism): Mexico, Indonesia, South Korea, and Turkey, the latter as the new frontier, especially in telecommu-nications and financial services. All countries that – along with others like Pakistan, Bangladesh, Vi-etnam, and the Philippines – have a young (and in some cases, very poor) population that is readyto enter the game of the new globalization.

global competition of industry | oxygen

The prospects of the world’s second economic power are central to the fate of almost all areas of the world, from the United States to Europe, from the Far Eastto South America

—Germany: industrial education

—+11% investments in the upgrading of the labor force

in 2012

oxygen | 16 — 03.2012

040

14.6%

1.8%

6.5%

19.2%

28.5%

2.5%

8.6%

1.9%

2.1%

21.5%

36.9%

27.3%

28.6%

18.7%

24.6%

1.5%

2.8%2.6%

4.6%

0.3%

3.4%

2.6%

19.8%

3.3%0.1%

6.1%

Food

Mechanical Textile

Chemical

1.5%

1.2%0.2%

2%

10.6%

6.4%

1.6%0.1%

16.1%

6.3%

0.4%2.3%

3.9% 1.9%

1.9%1.9%

1.6%10.2%

7.3%

11.5%

4.3%

0.2%2.9%

37.1%

1.7%

2.6%

6.1%

12.4%

1.8%

2.4%

0.4%

2.4%

17.5%

2.5%

1.7%0.3%

1.8%

5.5%

9.1%

3.2%

Electricity

ManufacturingConstruction

Mining

CANADA

0.4%

1.9%1.7%

3.8%

12.3%

UNITED STATES

0.2%

JAPAN

UNITED KINGDOM RUSSIA

GERMANY

ITALY

FRANCE

%industry

passepartoutPa

The addedvalueof industry

edited by Oxygeninfo-graphics Undesign

Industry is no longer the main economic driving force of world economies. But, even with a lower percentage than that of the tertiary sector, it weighs crucially on the global gross domestic product (in many countries, it is responsible for about one third of their GDP). Despite the new industrial sectors in which nations aim to revive their economies, the driving forces in the G8 countries are still their manufacturing, construction, mining, and electrical sectors. And sometimes, they play a strategic role, even if they account for only a small percentage when calculated on total GDP.

041

14.6%

1.8%

6.5%

19.2%

28.5%

2.5%

8.6%

1.9%

2.1%

21.5%

36.9%

27.3%

28.6%

18.7%

24.6%

1.5%

2.8%2.6%

4.6%

0.3%

3.4%

2.6%

19.8%

3.3%0.1%

6.1%

Food

Mechanical Textile

Chemical

1.5%

1.2%0.2%

2%

10.6%

6.4%

1.6%0.1%

16.1%

6.3%

0.4%2.3%

3.9% 1.9%

1.9%1.9%

1.6%10.2%

7.3%

11.5%

4.3%

0.2%2.9%

37.1%

1.7%

2.6%

6.1%

12.4%

1.8%

2.4%

0.4%

2.4%

17.5%

2.5%

1.7%0.3%

1.8%

5.5%

9.1%

3.2%

Electricity

ManufacturingConstruction

Mining

CANADA

0.4%

1.9%1.7%

3.8%

12.3%

UNITED STATES

0.2%

JAPAN

UNITED KINGDOM RUSSIA

GERMANY

ITALY

FRANCE

%industry

DataPercentage contribution to total GDP Sources: OECD Stan database Eurostat 2012 – CIA The World FactbookWorld Development Indicators Database

The fifth industrialrevolution

An analysis of the impending revolutionin the manufacturing sector, an overviewof the lessons drawn from past industrial revolutions and those of the present of economic crisis. And some social and economic benefits thata new revolution could achieve.

by Peter Marsh

scenariosSc

The past decade has been a gloomy time when it comes to discussion of prospects for rich countries in manu-facturing. The story has been one of a continual loss of competitiveness and capabilities by the world’s most devel-oped nations in factory production. The result has been a steady shift of output to the low-wage nations, with China most firmly in the ascendancy.Now, however, the world is on the brink of a new era. This shift in for-tunes of the developed and develop-ing world in manufacturing will begin to go into reverse. Manufacturing in the rich countries will stage a come-back. Behind this trend is a mix of fac-tors, linked to technology, economics, consumer behavior and the operation of global supply chains and the inter-net. I have called this change “the new industrial revolution”1. The label is an effective way to separate the new era from the other big shifts in man-ufacturing that have taken place in the past. The “new” revolution is the fifth such change in history, as I ex-plain later. At the heart of this switch is a simple proposition. Over the next

10 years, the proportion of global manufacturing done in the rich coun-tries will decline at nothing like the rate experienced in the past decade, and may even see a modest increase. There will be crucial consequences for the world’s traditional industrial lead-ers – the countries of western Europe together with the U.S., Canada and Japan. The new period will coincide with a time of growing confidence for engineering and production busi-nesses based in these regions. Job op-portunities in these companies’ high-cost locations will be more abundant than elsewhere for a decade, particu-larly for those people with a high level of technical skills. The new industrial revolution comes at a difficult time. For several years, the economies of the world’s rich nations have been in a highly fragile state. This has re-sulted from the 2007/08 financial crisis, coupled to its aftermath in the shape of high government and con-sumer indebtedness and a steep fall in business confidence, most nota-bly in the eurozone. So politicians, business leaders and others will have

every reason to welcome the period of change as marking out a time when economic optimism starts to rise, after a prolonged period when it has been in extremely short supply. The advances in emerging economies in the 2000-2011 period in manufactur-ing were led by China. They have also involved – albeit to a lower degree – others among the poorer nations, including India, Brazil and eastern Europe and Russia. Key factors have included the lower costs of produc-tion in these regions, mainly linked to wages. That has encouraged more companies to shift manufacturing there, even if the final consumer is in the western world. At the same time, the growing demand for increasingly sophisticated factory-made products in the developing nations has prompt-ed more industrial investment in such locations. Resulting from this change has been a big move upwards in the amount of world manufacturing done in the world’s poorest, least devel-oped countries. The figure rose from just 24% of total global production in 1990 – and 27% in 2000 – to 46%

043

BRITISH PRIDE The history of Great Britain, the subject of the opening ceremony of the 2012 Olympic Games in London at the Olympic Stadium, was bound to include a celebration of the Industrial Revolution. In its remembrance, one of the five Olympic rings was spectacularly forged among the smokestacks.

oxygen | 18 — 12.2012

044

oxygen | 18 — 12.2012

case. China, India and the other na-tions in what we now label as the poor world were much more populated than other regions such as western Europe and North America. Manufac-turing then existed only in a rudimen-tary form. The productivity improve-ments clustered around modern manufacturing – leading to the pos-sibility of higher output per worker due to technological enhancements – had yet to be invented. So when it came to manufacturing capability, output roughly went alongside worker numbers. The more people a country had, the greater would be its output. But changes were on their way. The first industrial revolution – what most people call THE Industrial Revolution – made big productivity advances pos-sible in factories making a range of goods from textiles to machine tools. As a result, countries with small popu-lations, and with a correspondingly small number of people in factories, for the first time could punch above their weight in industrial output.

The first industrial revolutionThe first industrial revolution took place starting around 1780. It had a powerful and growing impact on the world for about 50 years. Its biggest and most immediate effects were in Britain. The shifts resulting from the first revolution were linked to chang-es in the mechanization of textiles

in 2011. It follows from this that the amount of the world’s manufactur-ing done by the rich, “western world” has seen a big decline that has been particularly fast over the past decade. The figure has come down from 76% in 1990, and 73% in 2000, to just 54 % last year2. China has been responsible for a large part of the shift. In 2000, China accounted for 7% of world manufacturing output. By 2005, this had risen to 9.8%. Over the six years to 2011, China’s share doubled to 19.8%. That put China above the US in terms of share of factory production. It was a historic change: 2011 was the first year for more than a century in which the US was anything other than the world’s top country in terms of fac-tory output. China’s rise has been much more impressive than that of any other country in the emerging markets bloc. Over the 2000-2011 pe-riod, Brazil’s share of world manufac-turing production went up from 1.7% to 2.9%; India’s increased from 1.2% to 2.3%; while the equivalent change for Russia was from 0.8% to 2.3%. The mirror images of these changes have concerned the developed world. The US’s share of world manufacturing output went from 27.1% in 2000 to 18% in 2011; over the same period the equivalent number for Japan slipped from 18.3% to 10.2%; for Germany, the drop was from 6.9% to 6.4%; and for It-aly it went from 3.6% to 3%. These fig-ures require some historical context. China being the biggest manufactur-ing nation in the world would have been – just 20 years ago – very hard to imagine. But in 1800 – for anyone who was fully aware of global economic trends – China as the largest manu-facturing power was an incontrovert-ible fact. Indeed, for several hundred years until around 1840, China was top of the world league table in indus-trial production. (Of course, no one counted up “industrial production” back then. Also the modern word “factory” had barely been invented. When I use “industrial production” in reference to past eras, I refer to output of material-based goods us-ing human labour and ideas.) In 1800, China’s share of world factory out-put was 33%, just ahead of India. In that year, what we now call emerging economies were responsible for 71% of world production, with the nations now categorized as the western world accounting for the remaining 29%. It is simple to work out why this was the

production, the emerging disciplines of metallurgy and the advent of steam power. The changes fed through to other areas of industry. They meshed in with other key movements – for in-stance, in the advent of new forms of company organization; higher rates of literacy resulting from better educa-tion; and improvements in agriculture and food supply. The first industrial revolution – with its impact acceler-ating during the 19th century – was why Britain took over as the biggest country in terms of factory production just before 1850. Britain’s position as number 1 in manufacturing only lasted for about 50 years. By around 1895, the US had usurped Britain as the leading country by this measure. It held this position until 2011. Brit-ain’s tenure as the biggest country in manufacturing output – at its peak in the late 19th century the country was responsible for 15-20% of world industrial production – was also due to the second and third revolutions in the sequence. Both of these were also centered on Britain (although other countries, notably Germany, France and the US also played strong roles).

The second industrial revolutionThe second revolution was the trans-port and communications revolution. It began around 1850. It took shape around improvements in ship con-struction; the emergence of railways

045

the fifth industrial revolution | oxygen

(driven originally by steam power); and the invention of the telegraphy.

The third industrial revolutionThe third revolution was a broad set of changes based around new scientific thinking. Key disciplines were maths, chemistry and physics. The shift had its impact from 1890 onwards. Result-ing from this was the availability (for the first time) of electricity on a “made to order” basis. This new form of pow-er was capable of driving a range of dis-parate industrial processes. Linked to this were changes in production tech-nologies leading to (among others) cheap and plentiful steel and a broad spectrum of new chemicals, among them drugs, dyestuffs and industrial commodity such as sulphuric acid.

The fourth industrial revolutionThe fourth industrial revolution had its impact well into the 20th century. Taking shape around 1950, and with its effects gathering momentum for 30-40 years after this, the fourth revo-lution was about computers and elec-tronics. It made the personal com-puter, high-speed data routers and the Internet all possible. The impact of the first four revolutions was largely confined to the rich countries, as they are currently defined. It was why these countries – which were the first to gain from the fruits of modern industrial development starting from around

1800 – had not only leapt ahead in the early years of this era but had stayed ahead. The period in which these countries remained in the lead lasted until around 1990. It was only after this that the changes ushered in by all the four periods of industrial shift built up sufficient momentum for their impact to be felt by countries outside the main developed bloc. This is how the leading emerging nations led by China started to become important industrial play-ers for the first time in about 150 years.

The fifth industrial revolutionWhat lies behind the new – the fifth – industrial revolution? And how will this affect the world? There are sev-en factors behind the new period of change. The first of these concerns changes in technology. A wide range of new technologies – concerning electronics control, materials science, nano-technology, and new forms of mechanized production (involving ideas such as “additive” manufactur-ing, built around new generations of 3D printing machines ) – will have an impact. In most of these areas, the rich countries of the US, Japan and western Europe have made the biggest advances. They will also turn out to be the biggest beneficiaries of the chang-es. A second factor concerns greater requirements for product customiza-tion. This refers to the increasing “tai-loring” of products, from consumer gadgets to industrial machines, to suit the requirement of the user. The shift is likely to necessitate manufacturing closer to where the goods will be used, so that the necessary design changes can be incorporated most effectively. In cases where the products’ custom-ers are in the developed nations, it will therefore often be more sensible to base production in these places, rather than in an emerging country some distance away, even if produc-tion costs are lower there. Changes in technology are in step with the in-creased requirement for customized goods – including more sophisticated methods of automation. These make it easier and cheaper to make a small series of goods honed to meet the requirements of customers. A third aspect concerns the growth of global supply chains and information net-works (the latter building on the in-ternet). These changes will give a new competitive advantage to manufactur-ing companies based in high cost na-tions. Even when they choose to base

What lies behind the new – the fifth – industrial revolution? And how will this affect the world? There are seven factors behind the new periodof change

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the physical production of goods in low-wage nations such as China, the high-cost country will often be in a better position to act as the home for research and development activities. Here, businesses will be able to em-ploy relatively large (and well paid) labour forces, not in the physical as-pects of production but in the “soft” side of manufacturing concerned with the intellectual effort of making new goods possible. The fourth factor concerns the rise of China. The rela-tively sudden re-appearance of this country as a manufacturing power has given a huge impetus to the global activity of goods production. It is pos-sible to regard China’s rise as a threat. Indeed, this is how the country has been viewed in many quarters, not least by manufacturers based in high-cost nations that have seen new fac-tories based in China emerge as pow-erful competitors. However, the way China fits into global supply chains can also be viewed as providing a po-tential help to a company based in the developed bloc. The production ca-pabilities of a China-based industrial site can be leveraged to good effect by being used as a supplier. China is also an important new market for compa-nies that make new sorts of industrial and consumer goods and are based in

the West. Moreover, the direct com-petitive threat of China-based produc-tion operations will be reduced (but not go away altogether) as a result of the higher wages and other costs start-ing to make their presence felt in China Fifth is the emergence of new indus-tries based on extremely narrow areas of production (and related service ac-tivities). These are the so-called “niche” or “sliver” sectors that barely existed in the past. But today – due to changes in technology and industrial organization, plus the new possibilities that exist for selling globally using the Internet and better transport links – such narrow sectors are becoming more viable as an area in which small industrial busi-nesses can often compete on a global basis. In most cases, niche companies are found in Western nations, rather than in the emerging economies. Examples of these new niche busi-nesses include: the manufacture of high-speed air-bearing spindles for drilling machines; production of new forms of specialized lighting using semiconductor-based light-emitting diodes; the production and servicing of ultra-thin and sometimes flexible steel pipes for industries from energy exploration to medical equipment; and high-precision pumps for use in the food industry, aircraft production

Now that factory production is more widespread, the results of the new industrial revolution will have an impact virtually everywhere

047

and fluid sampling, for instance, for the health industry or environmen-tal management. The sixth key factor concerns the growing importance of small clusters of companies and re-search organizations – often versed in complementary or identical technical disciplines – that are concentrated in the same small geographical region. Such clusters are mainly to be found in advanced industrial economies. They are by no means new. But their impact will become greater in the new indus-trial revolution. That is, as the the forces of globalization make it possible to am-plify the impact of technological and marketing verve in a specific location to many more parts of the world than would have been possible in earlier eras. In the new era, small concentra-tions of industrial expertise – perhaps in a corner of Italy, Germany or the US – will use global supply chains and sup-port networks to have an effect in a scat-tered way in many far-flung parts of the world. The final point is linked to the way environmental factors are playing a part in influencing how companies op-erate. In the past, manufacturing com-panies were almost always associated with despoiling the environment. This happened either through pollution dur-ing production processes, or in the way the goods were used after they left the

factory. Now, environmental factors are being used by companies much more positively, as a potential competitive advantage. Companies in sectors from electric motors to car production are in-vesting in new manufacturing methods or novel types of products to make their businesses much more “environmen-tally friendly”. New industries – such as production of photovoltaic cells and wind turbines – have emerged. Their purpose is not only to make money for their investors but to reduce the envi-ronmental dangers affecting the world. The new industrial revolution is likely to become the first big shift in manufac-turing in which the threats to the global environment stabilize – or recede some-what – rather than increase. By making use of some if not all of these seven fac-tors, a range of industrial companies and based in high-cost nations will find they may emerge over the next 10-20 years in a stronger condition. Business-es in a good position to exploit these ideas include big and small groups – taking in well-known names as well as companies barely known outside their own industrial sectors. They include: Luxottica, a Milan-based group that is the world’s biggest maker of spec-tacle frames and which produces its items in a highly diverse and high-tech set of processes centered on produc-

tion bases in Italy, China and the US; Trumpf, a German business that is the world’s biggest maker of laser-cutting machines for metals, and whose com-petitive advantages lie in combining technological advances with ability to connect up with thousands of custom-ers globally; ABB, a Swiss-Swedish en-gineering giant that makes new forms of automation plus electricity distribu-tion hardware; Whitford, a US maker of fluoropolymer coatings for an immense array of applications from oil platforms to the food industry; Strix, a UK-based company which is the world’s biggest maker of kettle thermostats and has extensive manufacturing operations in China; and Oiles, a Japanese maker of lubrication-free bearings. The origi-nal Industrial Revolution boosted the prospects of manufacturers – which happened to be mainly concentrated in the rich nations. Now that factory pro-duction is more widespread, the results of the new industrial revolution will have an impact virtually everywhere. However, the initial effects will be felt most keenly in the rich world. Dur-ing the 1800s, the first Industrial Revolution was a key factor driving manufacturing growth in the West-ern world. As the 21st century pro-gresses, the new industrial revolu-tion is likely to do something similar.

NOTES(1) “The New Industrial Revolution: Consumers, Globalization and the End of Mass Production”, published in June 2012 by Yale University Press.(2) In this article poor nations – which can also be called by other terms such as “developing”, “newly industrialized”, “emerging” and so on – are defined as all the countries outside the “rich” or “developed” parts of the world, otherwise labelled as “the West”. The definitions are based on world conditions of the late 20th century. In earlier periods, when the differential in terms of wealth between Europe and the US and other parts of

the world was far less than today, different definitions would have applied. In the present day, “the West” is categorized as the 15 EU nations prior to enlargement of the EU bloc in 2004 (Germany, Italy, France, the UK, Sweden, Denmark, Finland, Luxembourg, Belgium, Netherlands, Spain, Greece, Portugal, Austria, Ireland); Switzerland and Norway; the US and Japan; and Australia, New Zealand, Canada. My data for manufacturing output is based on calculations by IHS Global Insight, a US economic consultancy. Further details on the derivation of the figures are given in my book.

the fifth industrial revolution | oxygen

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Italy? Not too attractive nor very free. The Doing Business Index (doingbusiness.org) of the World Bank Group – that calculates the attractiveness of 185 countries in the world for entrepreneurial activity – in fact, ranked Italy at 73rd place worldwide, but next to last among the high-income OECD countries. The Index of Economic Freedom (heritage.org/index) developed by the Heritage Foundation, instead, determines the degree of economic freedom of 179 countries and puts Italy in 92nd place (36th of the 43 European countries). The 10 indicators that make up each index recount a country with an inefficient judicial system, a cumbersome and slow bureaucracy, and burdened with many taxes; but also a country where investors are generally protected and where there is good business, and monetary and investment freedom. A country just above and just below the world average.

data visualizationDv

84thplaceSTARTINGA BUSINESS

Italy is 84th out of 185 countries for the ease of starting a business. New Zealand takes first place.

160thplaceEFFICIENCY

Italy is 160th for efficiency in resolving commercial disputes. Luxembourg takes first place.

edited by Oxygen Oxygen

Business:how attractiveis Italy?

DoingBusiness

—Index

of Economic Freedom

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103thplaceBUILDINGPERMITS

There are 102 countries that require fewer building permitsthan Italy.First of all, Hong Kong.

92ndplaceECONOMICFREEDOM

Italy is in 92nd place for economic freedom, with 58.8 points.The world average is 59.5 and the country with the most freedom is Hong Kong.

12thplaceFREEDOMOF COMMERCE

Italy ranks 12th for freedom of commerce. The top three in the ranking are Hong Kong, Macau, and Singapore.

169thplace TAXATION

Italy has 169 times more taxes than Bahrain, which leads the ranking of the countries where businesses are less burdened by the Internal Revenue Service.

How will the factory of the future be? The great changes that have oc-curred in the recent past have already revolution-ized production work. Many repetitive tasks have been replaced by robots, while the com-puter has allowed for greater flexibility, moving from mass production to those that are custom-ized based on customer requirements. Working has become less heavy than the old assembly line, but it requires new skills and attention. The factory has changed but it has not disap-peared, however, be-

cause the virtual cannot replace the real “things” we still need and some-one to produce them. In-deed, economic progress opens new perspectives because it increases the demand of countries that have remained on the sidelines until now. But considering the en-vironmental constraints, what are the areas of growth in manufacturing productions that we can rely on? Will technologi-cal innovation be able to remove the constraints that threaten progress? The diagnoses intersect and contradict each other. In a highly de-

Shouldwe producefewer “things”?

in-depth

Industries will always be producing. What economists are debating is whether we should really be producing less and, in this case, how to survive,or if instead the world – as some think – is able to grow exponentially, like the memory of certain chips.

by Donato Speroni

Id

Abundance—

Starts from the concept of exponen-tial growth, applied to technological

progress. The best known case is Moore’s law, which provides for

the doubling, at the same price, of the memory capacity of chips

required for computers

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bated study released last August (Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds), the economist Robert J. Gordon argues that the three industrial revolu-tions we have experi-enced so far (steam and railways from 1750 to 1830; electricity, oil, and communications from 1870 to 1900; computers and mobile phones after 1960) have given impetus to shorter and shorter periods of growth, and that the result of many “adverse winds,” from population growth to the spread-ing of inequality, is that the per capita income for 99% of Americans will not grow more than 0.5% annually for the next decades. This matter concerning the United States also applies to the other industrialized countries and the diagnosis is not too far from that of the “doomsayers,” such as Richard Heinberg (The End of Growth), who are convinced that overpop-ulation, climate change, and the depletion of raw materials will lead the Earth to the “end of growth.” A diagnosis, according to them, that can especially be identi-fied with a drop in the manufacturing output. But there are those who think in a radically different way, such as the authors of Abun-dance – The Future Is Better Than You Think (soon to be published in Italy by Codice Edizioni). Peter Diamandis is an entrepreneur who has founded a dozen high-tech companies; Steven Kotler is a well-known science writer. Abun-dance starts from the concept of exponential growth, applied to

technological progress. The best known case is Moore’s law, which pro-vides for the doubling, at the same price, of the memory capacity of chips required for computers, but the same rule applies to many other cases. The effect of this progress is that technologies that are difficult to imag-ine even today will be made available to all of mankind in the next few years. Not surprisingly, Diamandis, together with Raymond Kurzweil, is one of the co-founders of Singularity University, a NASA research center in California that is studying the combined effects of biotechnology, computer systems, net-works and sensors, artifi-cial intelligence, robotics, medicine, and nanotech-nology. Great attention is also being devoted to digital manufacturing, i.e., the possibility to pro-duce three-dimensional objects with the same ease with which we are now producing photocop-ies. Will this be the factory of the future? In a sense, because many simple pro-ductions can be achieved through these machines, without the need for an actual “factory.” But it is hard to imagine that the factory as a place of production and assembly of more complex objects could disappear. It is possible that the authors of Abundance are overly optimistic. Industrial revolutions do not arise from technological in-novation alone, but also from the availability of raw materials and capital, as well as the political and organizational capacityto accommodate the new. In short, the instruments of growth are at our disposal, but using them the best we can willnot be easy.

Businesses thatthink in networks

contexts

A resource for creating relations of exchange and support among the companies that have to deal with this current time of economic crisis and changes:the network contract as a guiding tool for aggregation and inter-firm collaboration.

by Aldo Bonomi

During the Marcegaglia Presidency of Confindustria, I was entrusted with the creation of an ad hoc project: to boost the aggregation of businesses to im-prove competitiveness and innovation of the Italian entrepreneurial panora-ma. So on October 28, 2009, this gave rise to the Confindustria agency, Ret-Impresa, aimed at creating favorable conditions for dissemination and ag-gregation through the then-new tool of the network contract. Only three years after this form of contract was intro-duced into the national legal system, at least 458 networks have come into be-ing, with the participation of 2,469 companies from all over the country. Companies have long been engaged in forms of collaboration and integration, and the aggregations that formed spon-taneously have become the heritage of Italian companies. However, entrepre-neurs today underscore their willing-ness and interest to work for the crea-tion of specific, shared, and well defined programs, but they aim to do so while maintaining independence and autonomy in the management of their business. Therefore, the network con-tract is one more chance for businesses with respect to the traditional aggrega-tion mechanisms such as mergers, con-sortia, ATI, and joint ventures. This is a cultural leap toward aggregation that is not only numerical and quantitative

Co

but a reasoning that concerns a com-mon program to help businesses grow together, enlarging the radius of action in order to achieve their very demand-ing objectives individually. The devel-opment of ICT has made it possible to overcome those mechanisms of purely territorial cooperation that have proven to be inadequate to meet the increasing relational, informational, and econom-ic exchanges of businesses. Although starting from the specificity and local traditions, it is necessary to expand the size of the district by building more ex-tensive and extraterritorial collabora-tions that can improve the competitive-ness of the domestic and foreign markets. While by definition the dis-trict refers to a local and limited phe-nomenon in which companies special-ize in a particular sector, the network concept covers the ideal of broader col-laboration, not only based on geo-graphical proximity but also on real and effective opportunities to increase com-petitiveness through the exchange of technologies, information, and knowl-edge. This is why the network, bringing together companies from different sec-tors that may find advantages in the mutual exchange of knowledge and skills, responds to the request to over-come localism and appears to be the natural evolution of the collaborative model of the modern production sys-

tem. The network contract is the tool that has successfully responded to the request of businesses for a reference guide that makes their collaboration even more effective, a scheme to follow, albeit in a flexible way, that ensures their entrepreneurial autonomy. The network contract provides streamlined governance, free of bureaucratic super-structures that complicate operations, but without relinquishing the essential pragmatic elements. The highly inno-vative scope of this tool enables net-works to acquire a well-defined and eas-

ily recognizable structure, bound only to the object of the contract and as stip-ulated in the joint program. The net-work contract, modeled on and “tailor-made” to the characteristics of its contractors, is effective and adaptable to the needs of companies of all types

The network, bringing together companies from different sectors that may find advantages in the mutual exchange of knowledge and skills, responds to the request to overcome localism

053

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and sizes in every economic sector. These peculiarities make the collabora-tion tractable on the inside but ex-tremely solid outwardly. The new mod-el encourages both organizational and productive innovation processes: it is a philosophy that embraces a broader view of economic relations, attempts to overcome the “small is beautiful” be-lief, and holds that networking is useful and convenient for meeting the chal-lenges of the market and improving a business’ economic performance. In fact, very often businesses that are too small or under-resourced cannot man-age to enter or successfully remain in the international markets. It is precisely in this difficult period of stagnation in domestic consumption that interna-tionalization has emerged as one of the goals most often invoked by an overview of the network programs: 78 of those who signed have declared their objec-tive to be the development of interna-tionalization projects to intercept new business opportunities across borders. Among the most interesting initiatives reported in this issue are the cases of Five for foundry, the first network of in-ternational scope including French, Polish, and Czech companies, and the case of the Italian Technology Center network contract, whose objective is to

penetrate the Indian market. In a con-text of growing scarcity of resources, the network acquires a strength and di-mension capable of showing its inter-locutors growth and reliability. In this sense, public banks and institutions can evaluate the advisability of allocat-ing financing also through the assess-ment of the validity of the entrepreneur-ial projects presented in the network. The so-called network rating can be de-cisive and even exceed that of the indi-vidual company. The network cannot be the only solution to the crisis, the panacea for our businesses, but it should definitely be an instrument of industrial policy made available to the system for best dealing with an unfa-vorable period and time of changes in the relations between the territory and the economy. It is a tool that Confindus-tria and our company has believed in and supported right from the start. Likewise, the government has enacted a significant measure to support net-working companies: the suspension of taxes for the portion of income for the year that the individual companies allo-cate to the realization of the invest-ments planned by the network pro-gram. The amount of the tax benefit provided by the State was 48 million eu-ros for the three-year period of 2010-

2012; we consider this benefit indispen-sable and are working to ensure that the amount is increased to 100 million eu-ros for the next three-year period. The contributions of the institutions is im-portant: there are more and more ten-ders promoted by the Regions, Provinc-es, Cities, or local Chambers of Commerce to grant financial aid in fa-vor of business networks and the MIUR has also set up a competition for the development and expansion of the Na-tional Technology Clusters. Important measures were included in the De-crease Decree for the networks of the tourism sector. One of the conditions to qualify for the tax relief is the precau-tionary asseveration of the network pro-gram carried out by authorized and rec-ognized bodies. For this reason, in June 2011, RetImpresa created the company RetInsieme srl, the asseveration body that, in two rounds, has certified 68 net-work contracts. In addition, the net-works have favorably come to the atten-tion of the EU institutions: just recently there has been an important acknowl-edgement by the European Commis-sion, which included an entire chapter on clusters and networks in its Europe-an Competitiveness Report 2012, recog-nizing their positive role in reaching critical mass, exchanging information,

Entrepreneurs today underscore their

willingness and interest to work for the creation of specific, shared, and well defined programs, but aim to do so while

maintaining independence and autonomy in the

management oftheir business

055

businesses that think in networks | oxygen

and expanding the industrial capacity of businesses. In recent months, the European Investment Bank (EIB) has also activated support for the networks, establishing a 100 million euros ceiling. Consequently, we have had frequent contacts with the Office of the Commis-sioner Antonio Tajani to allow the net-works to access the structural funds and various funding of the next EU plan for 2014-2020. In recent years, we have embraced all the aspects of Business Networking: promoting studies and re-search in the academic world, collabo-rating with business associations, and creating important synergies with the banking system to have better access to credit for networking businesses. All this in order to try to reach the goal, es-tablished at the beginning of this Pres-idency with Giorgio Squinzi, of 2,000 network contracts by 2016. Together with Unioncamere, the Italian union of chambers of commerce, and the Bruno Visentini Foundation, we have been promoting “The network labora-tory” for the development of studies and analyses on network contracts, and in March, together with the Tri-Veneto Inter-Regional Committee of the Notarial Councils, we presented the “Guidelines for the network con-tract,” a tool for professionals and en-

trepreneurs to find useful, practical instructions for the preparation of the network contract. For companies, credit is still the real obstacle to the ac-tivity of growth-oriented business: that is why we are working to instill the con-cept of “rewarding” the networking businesses and therefore ensuring bet-ter conditions and specific financial products. For now, we have stipulated agreements with Unicredit Bank and the BNL and just a few days ago, initi-

ated a collaboration with the Carige Bank. There have been many achieve-ments to date and they represent a ma-jor step forward, but our action must continue in order to make the network contract even more structural and au-thoritative. We have dedicated atten-

tion and commitment in order for business networks to be included in the forms of aggregation admitted to the participation in competitive bids. We believe it is possible and our meet-ing with the Authority for the Supervi-sion of Public Contracts was an occa-sion that provided new information that will hopefully find applications in the simplification measures currently under discussion. The latest initiatives underway regard job training and work: the “School-Business Network” project, that aims to monitor the syner-gies existing at the national level and those that are under construction, was presented on November 23rd in Vero-na as part of the fair “Job&Orienta.” The initiative WIN (Work In Network), a tool of active policy for work, is a project that has been established for the manage-ment of human resources within the net-work, for facilitating the use of labor and with positive effects on employment and, hence, on growth. There is no doubt that the networks are now a reality and a viable alternative involving the econom-ic panorama, nationally and beyond; by joining forces and starting to work with larger and more stable companies, small businesses, too, may be able to grow and deal with the crisis as a constructive change and, thus, emerge strengthened.

The network cannot be the only solution to the crisis, but should be an instrument of industrial policy made available to the system for best dealing with an unfavorable period and time of changes

RETIMPRESAFounded in October 2009, this agency of Confindustria for the aggregation of businesses includes territorial associations, regional industrial confederations, and national associations and federations of industry for a total of about 70 members, supported and sensitized to the network contract.(www.retimpresa.it)

“The effective use of knowledge required not only the ability and incentives to create or have access to a new technology, but also the exper-tise to use them and to perform the instruc-tions contained in the ‘blueprint.’ Much of the knowledge applied by craftsmen and engi-neers was ‘silent,’ in that it was not formally de-scribed in the ‘recipe’ used for the production, but was the result of shrewdness and know-how based on experience or imitation.” (Joel Mokyr)

“The error that the economic system is paying is that of being based on a short-term vision and the model of organizational flexibility, instabil-ity, and speed in adapting to change. This was so also in the management of human capital. Not much was invested on knowledge and in recent years workers have been able to acquire only an incomplete experience. The craftsman model of the past teaches us one important thing: the sense of time. It took years to become a master in the olden days. The workshop to-day is a small business, which is why it should be supported as a model and should be placed in a position to invest in people. Today growth helps more than flexibility.” (Richard Sennett)

Sc

scenarios

A NEW ECONOMICRENAISSANCE THATCOMES FROM SMES

by Andrea Di Benedetto and Luca Iaia

About 18% of Italian exports comes from the artisan world. 50% of the SMEs. A rebalancing is happening in favor of the

smaller companies that have been able to protect very vertical slices of the market, a reorganization of the geographic

markets for the benefit of the emerging economies, especially Asian ones, that have always lived in admiration of Italy and

the quality of our craftsmanship.

057

Writings from two very different eras. Both of them, however, point out the existence of an invisible capital that is missing from the com-pany balance sheet, which is composed of the know-how and experience of the people who work there. This capital is even more significant in percentage terms when the company is indus-trialized and has deeply formalized processes. Joel Mokyr identified the widespread availabil-ity of highly specialized skills as a key factor that could sustain the innovation of the English in-dustrial revolution; in our day, Richard Sennett identifies the model of the small business as the only one able to invest in knowledge in the long term, ensuring a cultivation of skills and a rapid

infusion of new forms of communication. Our country’s levels of spending on research and development in the private sector are undoubt-edly lower than the European average and less than half of the average of France and Germany. The blame for these numbers normally goes to the fragmented system of the small company with little diffusion that is unable to invest in re-search and development. However, we are con-vinced that this is a problem of measurement: it is clear that if the rate of R&D is evaluated by the number of patents or the “tax” capitalization of investments in research, most innovation produced by small businesses is transparent, because it is fragmented and incorporated into

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the production function. Small companies are constantly forming their employees (sometimes only one) in the art of work and attention to de-tail, conveying history, traditions, and cultural know-how. The production processes are opti-mized for the successive steps, efficiency is im-proved regularly, the products are modified to al-ways follow the needs of the market. Knowledge and innovation, sure enough. So what does this sector need to boost growth? A document of the Ministry of Economic Development (DG SMEs and cooperative bodies – Div VIII) describes the artisan world as “a sector of the Italian economy of unfinished modernity, in the sense that it has not shown a clear evolutionary path toward an entrepreneurial dimension, which today is a win-ner in the market. As a matter of fact, the modern enterprise has the ability to control the domestic and foreign competition, to operate on a global scale, to exploit the potential of ICT, and to have highly innovative production techniques.” Thus: entrepreneurship, digitization, technology trans-fer. A culture of entrepreneurship is lacking; there is a strong need to connect schools to the business world. There are many experiences, also successful ones, for transforming research into start-ups, and to initiate young talents into

the work world. But in our training, there is still no transversal education in business: this is missing in the DNA of a nation with a manufac-turing vocation which based its foundation on manual skills and quality of production, and on the awareness of the scien-tific nature of doing busi-ness. It is therefore neces-sary to be able to innovate educational processes and interact with educational institutions at all levels: the change we need will be possible only through a greater involvement of the younger generation and a massive injection of “digi-tal” and managerial skills. About 18% of Italian ex-ports comes from the arti-san world. 50% of the SMEs. And the trends that show a democratization of the in-ternationalization are reassuring from both the commercial and production standpoint, thanks to the lowering of costs and the reduction in the number of intermediaries needed, mainly be-

The challenge we are faced with is to bring the small business and craftsmanship to a finished modernity,and it is a challenge forthe nation. The growth potential of the sector is likely to be perhaps the only chance we have to restart our economy.A new Renaissance

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cause of the Internet. A rebalancing is happen-ing in favor of the smaller companies that have been able to protect very vertical slices of the market, a reorganization of the geographic mar-kets for the benefit of the emerging economies, especially Asian ones, that have always lived in admiration of Italy and the quality of our crafts-manship. Finally, there is a phenomenon of in-creasing interest from the international demand for Made in Italy products/services – even lesser known brands but which are rich in craftsman-ship, history, and culture. And last but not least, the small business has a big gap in the aware-ness of its potential and appeal for new talent: it has always played a central role in our economy, but not in our collective imagination. In fact, it is not enough to produce a huge percentage of the GDP and represent the majority of the busi-ness scene: cinema, literature, and the media have always stressed an industrial Italy of the Sixties, the time of the economic boom driven by state-owned industries. There was a lack of communication skills and attention on the part of all the media, which disregarded a vital part of the country. The attention to beauty, history, and culture has always been there: however, the ways and means to recount them have changed.

The combination of so many winning stories can create an epic for a production world that is coming into being: this could be the key to an economic revival that is based on culture, terri-tory, and businesses considered as “knowledge processors,” i.e., capable of translating knowl-edge into economy. The global challenge from the point of view of productivity will be played on the ability to manage complexity: efficient mod-els of interaction among the distributed produc-tion systems, a rethinking of the supply chains to make them shorter and more effective, to redraw districts not in terms of geography, and to com-bine profit with the development of the area, the traditions, and Italian history. Cultural industry, Made in Italy, and companies will have to inter-act on increasingly international platforms that are attentive to the quality of the products and services offered. All accompanied by modern technologies and services resulting from a mas-sive digitization of businesses and the public ad-ministration. The challenge we are faced with is to bring the small business and craftsmanship to a finished modernity, and it is a challenge for the nation. The growth potential of the sec-tor is likely to be perhaps the only chance we have to restart our economy. A new Renaissance.

A culture of entrepreneurshipis lacking; there is a strongneed to connect schools to the business world. There are many experiences, also successful ones,for transforming research intostart-ups, and to initiate young talents into the work world.But in our training,there is still no transversaleducation in business

a new economic renaissance that comes from smes | oxygen

Our “know-how”will save us:10 success stories

contexts

The hands of Italian craftsmen and their brilliant and imaginative minds work international miracles. And Made in Italy products can boast numerous examples of virtuous artisan companies that, with hats, sunglasses, bicycles, and printers, are delivering the message all over the world.

by Daniela Mecenate

The future? It is in our hands. Literally. In fact, crisis or no crisis, our “know-how” will save us: this is the motto of thousands of manufacturing compa-nies that make up the Italian entrepre-neurial fabric, where craftsmen and “manufacturers” of all kinds keep the ship on an even keel. Carpenters, tai-lors, bakers, jewelers, and milliners. Chair-makers, potters, carpenters, and brewers. Who found companies, small or large and family-run or an internatio-nal business. But always with an indi-spensable foundation: the tradition and the ability to keep the arts and knowled-ge alive forever. And with one element more, namely innovation: the “know-how” combined with technology, tradi-tion which is attached to contemporary opportunities, able hands together with a digital mind. “This is our fuel,” ex-plains Stefano Micelli, a professor at the University Ca’ Foscari of Venice and au-thor of the book Futuro Artigiano (Futu-re Craftsman), “both for the small busi-ness and for the large company. These

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days, even the large ones cannot do without customization, or ‘tailor-made’ production, and they are rediscovering the importance of the craft with respect to the assembly line. Today, the small artisan company is no longer in conflict with the large companies and the in-dustrial sector, instead it is their inspi-ration and a valuable addition. We can compete on international markets and run against those who make serial pro-ducts, such as Germany, only by focu-sing on our crafts and playing the card of innovation.” And not surprisingly, even in these times of crisis, the expor-ting of Italian manufacturing is thriving more than any other sector: over 52% of companies have increased (albeit slightly) their international presence and exports grew the most among firms that have been less exposed abroad un-til now. So the global market, rendered more selective by the economic down-turn, is looking for our manufacturing: from that of the international giants to the products of tiny artisan companies.

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In the beginning, it was an artisan workshop in Taranto that had only three employees. More than 50 ye-ars later, it now has more than 6,000 employees and is listed on Wall Stre-et. And Natuzzi, the world leader in the production of leather sofas, is a beacon for companies in the south of Italy: from Puglia with love. Pa-squale Natuzzi, who at the age of 19 began making armchairs and sofas for the local market, has come a long way and is now present in 143 countries with 11 plants worldwide, but he has always been linked to Pu-glia and to its plant near Bari, where he moved in ‘72. But above all, he has never stopped believing in the power of hands, the “know-how” of the hundreds of artisans who work in his laboratories. The internatio-nal markets have welcomed him ever since that time, in 1980, when he was able to sell leather sofas to the Macy’s department store chain at a price which was one third the average cost in the United States. Arousing the envy of competitors and the admiration of American marketing gurus. So today, while manufacturing is at home especially in Veneto or Tuscany, this man from the “heel” of the peninsula looks at markets around the world with the pride of the old craftsman who knew how to dare and had to innovate. Wi-thout ever losing hope, even when his laboratory caught fire in 1973 and he had to start over. “I moved to Santeramo in Colle, where we still are,” he says, “and I rolled up my sleeves and started from scratch.”

Who doesn’t know of Nutella, Fer-rero Rocher, Kinder chocolate bars and Tic Tac breath mints? They are produced by a global giant, the Ferrero company of Alba. The ba-sic ingredients were a small pastry shop opened by Pietro Ferrero and his wife in 1942 and a great desire to invent, experiment, and create goodies without ever giving up. Such as during the war, when the proper ingredients for a chocolate-maker’s delicacies were no longer available and Pietro had the idea of resorting to a poor material that was readily found on the trees in the area, wi-thout knowing that it would bring him good luck: hazelnuts. Since then, the Ferrero laboratories have never stopped, and by dint of ex-perience, after all that mixing and grinding of hazelnuts, in 1964 he came up with the worldwide queen of the edible creams: Nutella. Which was welcomed also by the last G8 world leaders, when large portions of bread and Nutella were served on a silver platter at breakfast. Even today, the heirs of Pietro Ferrero are working unceasingly. Thanks to the work of hundreds of “master pastry makers” mixing and stirring, along came the snacks, the various EstaThé teas, and the Kinder eggs. “Of course it was a long time ago,” they say at the company in Alba, “when the founder, Pietro Ferrero, wanted to expand his market and went around to the neighboring towns with a cart to sell hazelnut chocolates made by his wife. But if we are expanding around the world today, it is thanks to his in-tuition and his desire to grow.”

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To give real shape to a drawing. To toss off a sketch, see it beco-me a real object, and watch it come out of a real three-dimen-sional printer. A vase? A colorful box, a lamp, a pair of glasses? You design it and then just click to create it, touch it, and put it on the desk. All this is possible with Kentstrapper 3D printers, a family-owned company in Florence that was founded just a year ago, right in the midst of the booming economic crisis. The name is a bit German, but the soul and imagination are en-tirely Italian. “There are several models of these printers, that we make practically one by one,” explains Lorenzo Cantini, “al-though the plastic components can be replicated. A software program converts a drawing into

a three-dimensional language that is interpreted by these prin-ters of ours which, thanks to the application of layers of plastic and other materials, are able to actualize the design. Initially, we thought we would sell these ma-chines to companies; instead, it is mostly private individuals who buy them. Also because the basic model costs very little and can be purchased by artisans to make their objects. We have noticed that many schools, espe-cially abroad, are buying our printers to give shape to models and drawings created by their students.” A way to free your imagination and make an idea become reality, and to overcome obstacles hindering a person’s imagination. The freedom to ima-gine has the Made in Italy label.

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Tailor-made. From the button-holes to the hems, from the fini-shing touches to the buttons, all the way to the name printed on the labels: everything just as the customer wants it. In the Hou-se of Zegna, the artisans are still the protagonists of this company founded in 1910, thanks to an intuition by Ermenegildo, the youngest of a watchmaker’s 10 children, who decided to chan-ge direction one day and set up a textile workroom. Even now that the Zegna brand is present in 60 markets worldwide and employs more than 7,000 people, the wool still comes from Australia (it used to be imported on large cargo ships) and the approach remains the same: customization. In fact, the company, which has now be-come a giant, started the “tailor-

made” line in 1972: in the Zegna workrooms, measurements are taken, the customer chooses from among 700 fabrics, and the pro-duct is made on the basis of their indications. This manufacturing company, the flagship of Made in Italy textiles, is located near Biella in Trivero and has been on the in-ternational markets ever since the ‘30s. Today, 80% of its turnover co-mes from abroad and the expan-sion into the Chinese market has been essential to the company’s growth, seeing as Zegna acqui-red a company in China in 2003 that produces quality clothing for the internal market. And even in a downturn phase, the Made in Italy manufacturing giant has not been touched by the crisis and is headed toward a turnover of well over one billion euros.

What is Harry Potter, the world’s most famous boy wizard, doing in Trebaseleghe, a charming town in the province of Padua? Here, the magic has been made by Fabio Franceschi, Managing Director of Grafica Veneta SpA, who has been entrusted with the printing and the production of the books about the magician par excellence. And not only those. Also printed here are the supplements of “Pravda,” the “New York Times,” and “Le Figa-ro,” and the Brazilian newspaper, “The Globe,” to name just a few. The new owner of Grafica Veneta, whose grandfather and father were printers and bookbinders, has cho-sen the way of customization and speed; he is able to print any kind of product in 24 hours at his plant in Trebaseleghe and deliver it anywhe-re in the world, while others take up

to three weeks to do so. Is it magic? “We are not just printers,” explains Fabio Franceschi, “and we have tri-ed to reconcile artisanal experience with the needs of an increasingly demanding market: we are equip-ped with innovative machines and, if necessary, even print at night to deliver on time.” And all this with an eco-friendly approach: 50,000 squa-re meters of solar panels on the fac-tory’s roof run the machinery and provide the energy needed to produ-ce books and supplements, almost all biodegradable. “We are the only company in the world with zero impact,” says the wizard of Treba-seleghe, who is now preparing ano-ther miracle: the debut at the Milan Stock Exchange by March 2013. “The project of the listing is ready,” he confirms, “and the capitalization is expected to be 500 million euros.”

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“We are contemporary cabinetmak-ers.” With this strange definition, the Ermes Ponti company summa-rizes its business: designing and producing high-quality furniture. Something of an architectural firm, a little of a carpentry shop, a bit of a tailor’s shop, and a touch of a construction site. A small company that, on the wings of family tradi-tion (“Grandfather Walter Ponti had been a carpenter ever since ‘37”), has flown from the Lower Val-ley of the Po River to the other side of the globe. Its furniture is found on the most exclusive yachts in the world, in the boutiques of Tokyo and Dubai, in Montblanc show-rooms, in Bloomingdales depart-ment stores in New York, and in the Quirinale Palace in Rome. And even in the richest apartments in Paris, Moscow, and Shanghai, and the princely villas of Porto Cervo. All this thanks to the adoption of what they themselves call the “Ponti method:” “We listen to the customer’s idea, then we design and create it in the same place, i.e., in our laboratory. Thus, we adopt a method of coor-dinated production and nothing escapes us, from the design to the construction. Our large laboratory is shared by weavers, cabinetmak-ers, joiners, and carpenters, so we are truly the couture of furnishings.”

Going back in time, let us take a look at the Duchy of Modena in 1741. This is where the oldest ce-ramics company in Sassuolo was founded: Marca Corona, where lo-cal skilled workers worked the clay and bricks for the dynasty of the Dukes of Este. Today, the ceramics district of Sassuolo is among the leading manufacturing centers in the world, and the companies have names that are renowned as quality brands. From the ceramics compa-nies of Ragno and Cotto d’Este, to the Marazzi Group and the line for the home by Versace. A market worth millions of euros and which maintains a worldwide market share that rivals the Chinese com-petitors, who produce at low costs on an assembly line. Here, instead, the traditional approach survives

alongside large-scale production and is even being rediscovered as a new asset on which to focus even more in the future. And so the “silky reflections,” “cloudy colors,” the “marbled surfaces,” and eve-rything that the imagination (and the customer) requests, can take shape in this district, where the raw material is still the same as back in the founding days of Marca Co-rona: the clay of the tributaries of the Po River and the marble of the Apennine foothills. And although the global crisis and competition from China have made their claws felt in recent years, a company spokesman explains, “This does not mean that we aren’t on the right track. Continuity is an ancient tradition; it is our strength and no one can take it away from us.”

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08To have an idea in mind and turn it into a case of international suc-cess. That is what happened to three young people from Florence who, since 2010, have been creating en-tirely handmade hats and now sell them all over the world, from Eng-land to Japan, from Germany to the United States. The company is called SuperDuper (American slang for “fantastic”) and was created for fun and passion by three youngsters who were a far cry from being milliners or tailors. No family traditions this time: the young man is a rock musi-cian, one of the girls is a dancer, and the other, an architect. But it was the fateful encounter in a market with the old forms for making hats and, above all, with a Florentine seam-stress who revealed all the secrets of the trade to the three, all enthu-siasts of design and headgear. This gave rise to a vintage-trendy line of handmade hats that have appeared in major fashion shows in Milan and Paris, crossed national borders, and conquered the pages of Vogue and Vanity Fair. Crisis or no crisis, their market is constantly growing: “We sell 80% in foreign markets,” they explain, “where, absurd as it may seem, Made in Italy is appreciated more than in Italy.” It takes them about two hours to make a hat, but each piece shows that if you have an idea in your head, and achieve it with passion and quality, it can be fruitful.

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Their motto is: Italian Pride. A pride that runs on two wheels and pedals throughout Italy with a precise aim in mind: the United States and then even further, as far as Japan and Australia. It will be a long run for the company Italia Veloce (Fast Italy) – Italian Workshop of Prestigious Cycles, founded in 2010 by four classmates from Parma. Fans of bicycling, of course, but also of design, the four took over an old workshop and gave it new life. This is how these hand-made bicycles came into being, with a ‘50s look but using contemporary technology and literally “made to measure:” starting from the stature of the client, all the rest is then devel-oped. Clients can choose – even online  – the colors and frame models, the seat and the wheels. There is just one constant: the

“arrow” shape of the handlebar, now a distinguishing feature. And like an arrow, the business, too, has soared upward, seeing as how in 2011, it already ended up with a turnover of 500,000 eu-ros. “We’re also making some-thing that is a high-end niche product, dedicated to those who love the environment, art, and design: many even choose our bikes as pieces of furniture,” says one of the four, Massimil-iano Rabaglia, the marketing director. “But we are investing to land in the United States next year with specific distributors. And that is only the first step.” Meanwhile, there is unceasing research in the field of urban mobility, which has already pro-duced a special result: the light-weight folding bike for yachts. A treat for the few, another push of the pedals into the future.

An encounter: wood with alu-minum, nature with technology. This is how the most detailed and eco-friendly glasses in the world came into being, those of the W-Eye, a family business which manufac-tures super-lightweight wooden glasses (10 grams), that are super ecological and super glamorous. The idea was the brainchild of a car-penter, or better yet, a chair-maker, who grew up around the lathe in his father’s workshop. Twisting the wood, giving it pleasant shapes and curves, making it flexible and adaptable: this was the challenge for Doriamo Mattellone: since 2001, at his company in Udine, he has been making frames one by one from 5 mm sheets of wood, combining them with thin layers of aluminum using a novel technique. The deci-sive encounter was with the designer Matteo Ragni, who gave an attractive style to the work of the chair-maker turned glasses artist from Udine. Result: for more than a decade, this entrepreneur from the Friuli region, thanks to his glasses, has been look-ing into the distance and seeing growing orders and requests which are also coming from the other side of the world by now. A Made in Italy success which confirms the vitality of Italian manufacturing firms when vision, innovation and “know-how” are combined wisely.

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Today, the small artisan company is no longer in conflict with the large companies and the industrial sector, instead it is their inspiration and a valuable addition

our “know-how” will save us: 10 success stories | oxygen

Like Steve Jobs, Nerio Alessandri, too, began his entrepreneurial career in a garage. He was only 22 years old and had a degree as an expert mechanic, great enthusiasm for sports, a passion for design, and the skills of a designer when, in 1983, he first began to invent equipment for gyms in the garage of his home in Cesena. This is how Techno-gym came into being; today, it is a world leader with 2,200 employees working in 14 subsidiaries in Europe, the USA, Asia, the Middle East, Australia, and South America. Every day, 35 million people around the world use Techno-gym products, 91% of which is exported to more than 100 countries. The com-pany has equipped 65,000 sports cent-ers and more than 100,000 homes. Chosen as the “official supplier” of five Olympic Games and used by the most prestigious sports clubs for the prepa-ration of their athletes (Juventus, Mi-lan, Inter, Real Madrid, and Chelsea, in soccer; Ferrari in Formula 1 racing; Al-inghi in sailing; and many others), Technogym has also inaugurated an original philosophy: wellness that goes beyond the American concept of fit-ness, which is all muscle and physical appearance. “It is a lifestyle oriented to improving the quality of life through regular physical activity, healthy diet, and a positive mental attitude. It allows us to be comfortable with ourselves and with others, to have more energy at

work, and above all, to live better and longer,” says Alessandri who, in 2001, became the youngest person in the his-tory of Italy to be awarded the Order of Merit for Labor and subsequently re-ceived two honorary degrees, in physi-cal education and biomedical engi-neering. “It is a profoundly Italian project that has its roots in mens sana in corpore sano [a sound mind in a healthy body], coined 2,000 years ago in ancient Rome.” Recently, in the midst of the economic crisis, the company opened Technogym Village in the presence of the President of the Republic, Giorgio Napolitano, and the former President

of the United States, Bill Clinton, who has made the fight against childhood obesity the banner of his Foundation. This is the new headquarters of Tech-nogym, which comprises the research and innovation center, manufacturing plants, and a large wellness center ded-icated to physical activity, interior de-sign, and the culture of wellness. The complex covers an area of 150,000

square meters, 60,000 of which are cov-ered, and is the first example world-wide of a wellness campus where em-ployees, customers, suppliers, and international guests can make a true experience of well-being happen. The ambitious project has been integrated into the “Romagna-Wellness Valley” initiative, sponsored by Alessandri’s Wellness Foundation, founded in 2003, which aims to make Romagna the first district of wellness in Europe, a labora-tory of experiences to enhance the op-portunities for economic development. “Man was born to move,” says Alessan-dri, whose parents were farmers turned workers, and who is married, has two children, and owns an Audi but not a private plane. “Our ancestors walked and ran 30 kilometers a day, a half mar-athon daily, hunting to collect food for the community. These days, our daily movement is far less, an average of one kilometer. A sedentary lifestyle triggers a social emergency: an epidemic of sed-entary living reaps victims and makes us sick. Not for nothing, chronic dis-eases caused by bad lifestyles such as physical inactivity, unhealthy eating, drinking alcohol, and smoking are the leading cause of death worldwide and generate more than 35 million prema-ture deaths per year. In 2006, for the first time in human history, the num-ber of overweight people exceeded the number of the undernourished. The

A sound businessin a healthy body

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How to combine entrepreneurial and design skills with a healthy lifestyle and diet, and be able to create a successful company. This is the story of Technogym, a leading company in the field of wellness: not a sport but a way of life. And of business.

interview with Nerio Alessandri, by Pino Buongiorno

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Italy can play a leading role in this field

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obesity epidemic not only affects the so-called most advanced countries, but also the poorest ones. The economic crisis is making the situation worse by increasing the consumption of junk food, especially among the young.” Alessandri is horrified by this data, which – he adds – combined with the continued aging of the population and the increasing difficulty of govern-ments to finance public health, clearly indicates only one way out. “The anti-dote to combat this epidemic of the 21st century is movement education, which can reduce the risk of contract-ing many diseases by up to 40%. Au-thoritative international medical re-search has shown that a 10% decrease of vascular disease in a country corre-sponds to an increase of one percent-age point of their GDP. That is why, al-ready back in 2003, we launched the message ‘Health is Wealth.’ Wellness, that futuristic idea launched 20 years ago by a small company from the Ital-ian provinces, is a major international trend today.” Garages bring good luck, especially if, like the co-founder of Ap-ple, you have a great desire to get into the game, even against the advice of your mother: “Ever since I was a stu-dent, I wanted to be an entrepreneur at all costs. I wasn’t interested in a perma-nent position or job security. Every day I looked around and tried to find the right idea to begin with. Little by little, I came up with the start-up (which wasn’t called that at the time) that could com-bine my passion for mechanics (techno) and sports (gym). In Italy, the sector did not exist. It did in America though, but I only found out about it a year and a half later from a friend who lived there and is now by my side. At the age of 24, I left for a long trip to the U.S. to see what was being produced over there.” Ales-sandri returned home with many new concepts, and above all, with the idea of going beyond hedonism to focus on in-dividual and collective wellness in-stead. Just two years ago, the word “wellness” was admitted into the Eng-lish dictionary. Here is the first lesson endorsed by the industrialist from Ro-magna. “I knew then, and it has been confirmed for me every day, that the winning frontier of the future is creativ-ity. I am increasingly convinced, as the masters of the Renaissance have taught us, that man will return to being at the center and this will make the real differ-ence. That is why there can be no sus-tainable economic development in the future without the good health of the

people. If you are in wellness, creativity is much higher. Companies will pro-duce more because their employees will be happier, smiling, and they will sleep at night and be more inventive the next day.” At the World Economic Forum in Davos, Alessandri was one of the promoters of the Wellness Alliance, which brings together businesses from around the world that believe in this philosophy. From there, a Manifesto was developed with guidelines on life-style, health, and prevention that Davos delivered to the UN through the World Health Organization. Cesena has be-come the cradle of the so-called Well-ness Economy which, according Ales-sandri, will replace the Green Economy. “Italy can play a leading role in this field and become the first wellness manu-facturer in the world using our DNA sys-tem, now renowned around the world: design, diet, artistic patrimony, and tourism.” Alessandri, who considers himself a social entrepreneur like the legendary Adriano Olivetti, has always believed in the product that acts as if it

35 MILLIONThe number of people who use Technogym productsTECHNOGYM VILLAGEThe first wellness campus in the world (in Cesena) coversa surface areaof 150,000 m2

2,200 EMPLOYEESWorking to distribute products in 65,000 sport centers and 100,000 homes

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were a work of art. “My concept of the entrepreneur has an artistic approach. Let me explain. The craftsman uses his head and hands when making a prod-uct. The entrepreneur goes further and adds the heart to the head and hands. That is how you achieve companies with a strong identity and a strong link to the community. When I had the idea of making Romagna become Wellness Valley, everyone thought I was crazy. Today it is the pride of Romagna. Ad-ministrators, businesses, schools, and universities all identify with this pro-ject. At the exit for Cesena, you can see ‘Wellness Valley’ written perfectly clearly.” A great world traveler, the founder of Technogym reflects on the complicated and serious Italian situa-tion, and almost gets angry. “Why are we getting used to mediocrity? Why don’t we react against adversity any-more? The answer that I came up with is that the spirit of excellence, art, and vision is missing. Luckily, there are still entrepreneurs who believe in it, but we all seem like Romantics. Fi-

nance has taken over. Speculation seems to dominate business. Instead, we must return to our roots, to our val-ues. We must return to being hungry, like we were in the postwar period.” Technogym is not giving up and in the last two years has invested more than ever before in its short history. But with a precise constraint: “I think that a com-pany can be strong and succeed in the world only if it has its roots firmly em-bedded in the territory.” Alessandri at-tributes to himself a great credit and a great defect: “The first is that I am super curious. The second is that I am never satisfied. We are a global brand, we in-vest in R&D and open new factories, for example, in Brazil, but also in Asia. In two, three, or four years, we plan to final-ly go on the stock exchange. Today, I am the owner of 60% of the company. The most important partner is an English fund.” One last question: seeing as you are forever in search of the Holy Grail, what do you still have in mind? “My lat-est idea is to transform the Technogym company into a World Heritage Site.”

My concept of the entrepreneur has an

artistic approach. Let me explain. The craftsman

uses his head and hands when making a product.

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Italy is the third largest supplier worldwide to Ikea. In particular, Ikea buys bed-rooms, shelves, bookcases, and kitchens from Italy. So yes, if we buy a “Swed-ish” kitchen, designed by Swedish designers and built with Swedish pine (and perhaps before leaving the store, we’ll just buy some Swedish herring in dill), when we get home and mount our new kitchen, it may turn out that... it’s Italian, even if we happen to live in China. And it is precisely the kitchen sector that is the most “Ital-ianate:” 34% of those sold by Ikea around the world are produced in Italy.With 338 stores in 40 countries (but many more

projects are in the pipeline), it is clear that Ikea has to supply itself with products also coming from outside the borders of Sweden; and to meet the highest quality standards, it is essential within the Ikea brand to include those of other production companies such as Whirlpool and Electrolux, whose appliances complete the Ikea kitchen. But, it was not easy to imagine that Italy is the third largest sup-plier of Ikea in the world, after China and Poland (which supply Ikea for 22% and 18%, respectively). In-stead, in Veneto, Friuli, and Lombardy alone, Ikea buys more than in Sweden or Germany and it purchases a total of 8% of its supplies

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Today, you can find at least one Ikea store in 40 countries around the world, and in each of them you can find at least one Italian kitchen. Because today, Italy, after China and Poland, is the third largest supplier of the Swedish giant.

by Cecilia Toso

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Suppliers—

To become Ikea suppliers, however, very high standards must be maintained: to pass the tests of efficiency and technology, and to keep

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from all over Italy.So who are these 24 suppli-ers, and what do they pro-duce? For sure, we know that 80% of purchases are furniture (kitchens, bed-rooms, shelves, bookcases, bathrooms) and 20% furnishings. However, there are some unknowns about who the suppliers are; not everyone likes to see their name associated with that of the multi-national corporation. But Ikea has greatly changed the lives of these Italian companies. The Piedmont-based Paini company, which produces water taps and has 300 employees, had a turnover of 70 million euros in 2011, a 7% increase over the previous year, thanks to its collaboration with the Swedes. And then there are Natuzzi (sofas), Elica (hoods), and Friul Intagli (carvings); the latter is a company in Pordenone that gets more than half of its turnover (180 million euros out of 300) from Ikea, providing furniture kits and components for kitchens, and even actively participat-ing in their design. To become Ikea suppliers, however, very high stand-ards must be maintained: to pass the tests of effi-ciency and technology, and to keep prices low (on its own products and those of suppliers), prices which, by contract, must be lowered even more over the years. Precisely for this reason, the profit margins are very high and many companies cannot enter the competi-tion. Those who can keep up, however, gain in production volume, long-term contracts, and brand value. And Italy gains in the job market, too: 11,000 workers are involved, if you add up the 2,500 supply companies also involved in the sales network.The natural question at this point is: why Italy? Lars Petersson, CEO of Ikea in

Italy, says that, to them, Italy is a great country to invest in. They have found quality production, great skills, and expertise, as well as a smaller number of complaints. But there is also flexibility, because the companies do not hesitate at a change of plans: if the project undergoes changes, the Italian producers meet the new demands. Not to mention the fact that being in constant worldwide competition in order to confirm themselves as Ikea suppliers encourages them to keep up the high quality and service. Finally, there are environmental issues: obtaining supplies from Italy instead of China is more convenient in terms of the carbon footprint. So, for example, Ikea is moving some of its suppliers from Asia to Piedmont, where it especially buys faucets, cabinets, and toys. In the relationship between Ikea and Italy, there is a difference concerning the world of sales, where our country is in fourth place behind Germany, the United States, and France, and the friction is being felt. Ikea buys from Italy for 8 but sells for only 7 and for the first time since 1989, this year there has been a 2.6% drop in turno-ver (to staunch this, it has decided to open up to e-commerce). And according to Petersson, the economic crisis is certainly not helped by the long battles that are being fought in Italy to open new stores:the time required by the politics and bureaucracy has led Ikea to cancel pro-jects after waiting for years for a reply from the local authorities, as wasthe case in Vecchiano (Pisa),for example. Hence, Italy as a resource and a country of challenge, where Ikea is thinking of investing 400 million euros over the next three years.

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“A cursed ninety-eight pound Cassan-dra,” as Edoardo Nesi calls himself in Storia della mia gente (History of my people), the book that won the Premio Strega award in 2011. An interpreter and narrator of the economic meltdown that was to stalemate the textile district of Prato and the entire nation, Nesi has returned to writing about the Italian re-ality in Le nostre vite senza ieri (Our lives without yesterday) and is still looking ahead, concerned about the genera-tion of kids who will revive our fortunes by taking on tomorrow with the weap-ons of courage, passion, and creativity. “Because fear of the future,” he says, “is something we can no longer afford.”

Our lives without yesterday is “framed” by the presence of your children. At the be-ginning, your daughter, who is beside you as she reminisces about the past after be-ing reminded by a smell. At the end, your son, who reminds you of how enjoyable the present is, leads you to say with relief: “Let’s talk about the future.” How do you teach young people not to be afraid of what awaits them?I wrote this book specifically with the hope of being able to speak to young people, that is, doing what all too often is not done. Whenever the political and economic powers that be speak out, they aren’t able to translate the outlines of the current situation into something that

can actually help our children. I find this tendency rather inexplicable, so I thought that I, too, needed to try to describe what is happening around us. It makes me very sad to think that our children are condemned to living in a present that is worse than what I experienced. And I don’t believe it is just a matter of money. Rather, it is a matter of hope, because I –  and many others like me  – had great hopes for my future, and it was legitimate that I felt them. Instead, today, if you speak of hope, you are considered to be incurably deluded. So, in order to restore value to this word, perhaps we should start with trust, by giving it to our chil-dren even before they might deserve it.

FEAR OF THE FUTURE? IT IS SOMETHING

WE CAN NOLONGER AFFORD

interview with Edoardo Nesi, by Armando Buonaiuto

A writer who has led a textile company for years, and who doesn’t experience the factory as an alienating reality, talks

about the future and trust. And optimistically describesa country rich with youth and potential.

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Is there really a lack of willingness and energy in the younger generations, as is said so often? I strongly disagree with the conven-tional wisdom that makes young peo-ple out to be disengaged, anesthetized by consumption, or any less willing to make sacrifices and take their lives into their hands than their fathers and their mothers were. I think it is a very cruel falsehood, one that does not quite tally with the facts. And here we return to a sense of hope: in the Seventies, we lived in an age when being young was an advantage, because each of us would have been able to make our lives an un-predictable adventure in the making. To preserve the idea that the son of a laborer can dream and create a differ-ent life for himself seems to me to be among the most important things that a government should do for its citizens.

In this regard, how much does an intui-tion of the new count for the aspiring en-trepreneurs of tomorrow?It is essential. The mechanism of re-placement and innovation needs to

be reactivated, which does not mean just innovating what is already there, but literally creating the new, whether it be ideas or products. And we must also begin to see networking not only as a means to exchange knowledge or to have fun, but as an extraordinary commercial weapon that can offer im-proved work tools. The traditional idea of business that our fathers had is now outdated, and we now have the ability to sell in a new way, through channels that were once unimaginable. Remain-ing ideally linked to the past means dragging weight with you that does not help. It is not the physical infra-structures that are lacking, but those things that are intangible – and digital.

Entrepreneurially speaking, does the idea of Italy as the home of the “good life” still make sense? It is perhaps the only thing that still has great validity. What Italy can boast of to-day is the glory of a nation of beauty, a place where craftsmanship is inspired by art and enters into our lives. This is an idea that has its roots in the Renais-

sance of Lorenzo de’ Medici, and which some of our best brands continue to pursue. We are still famous throughout the world as the place where one lives a better life and we must not squander this extraordinary weapon. Many of the products that Italy sells abroad arise from their connection with its true cul-ture. Even in times like these, when you manage to have a market selling clothes that cost 2,000 euros, it means an ideal is embodied in those clothes that makes them special. It means that those who choose to purchase them even when they have a thousand alternatives in every price range, are making an invest-ment in something that marks the dif-ference from the simple need to buy a garment. To understand this mecha-nism, just think of the street vendors at the Piazza dei Miracoli in Pisa selling junk souvenirs and T-shirts they never would be able to sell if, coincidentally, their stalls were not right next to the Tower of Pisa. So, is that or isn’t that in-come deriving from culture? It is often said that culture can’t be eaten. Maybe it is time to try to reverse that principle.

«We need to have new ideas and new companies that can use globalization instead of suffering under it. It will take a pact between the generations and it will take years, but it will work. Because if our trust in young people doesn’t work, then it would mean that we really are finished, and that we deserved it»

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fear of the future? it is something we can no longer afford | oxygen

tions for many people to become en-trepreneurs thanks to their desire to do things and their initiative. These stories didn’t only happen in my city but also in many Italian provinces and are emblem-atic of the extraordinary social equal-izer the economic boom represented.

In conclusion, I would like to go back to Le nostre vite senza ieri where, faced with a less than rosy situation always in the background, you explicitly state, “I am an optimist.” What drives this opti-mism? I wanted to call myself that so I would re-mind myself of the optimism of volition, to make an effort not to be absorbed by the pessimism that I see around me and which I reluctantly recognize as justi-fied. In fact, I sometimes get the impres-sion that if things are so bad, it must be because someone is deliberately mak-ing an effort for it to be so. Yet, I am con-fident in the possibility of change that will be capable of surprising us. I truly believe that something will change, and for this to happen we must think first and foremost about creating jobs for young

people, because a nation incapable of giving space to the ideas of its young people cannot go anywhere. And then, it is unthinkable that this world should be governed by people in their seven-ties. Beyond the desire to “scrap,” a verb that is very much in vogue today, I think it is absolutely necessary to take note of what is happening and find the cour-age to innovate. I trust, often without motivation, in the idea that we’ll man-age to get out of this swamp together, and that we can “talk about the future” with our children. That is what I wrote in the chapter about the AC Milan soccer match, which concludes the book. That chapter was one of the first I had written and then I inserted it in the middle, but I still wasn’t convinced. Nevertheless, I definitely wanted to put it somewhere because I felt it spoke of an important time of sharing with one’s child, and of teaching. It was my wife who told me one evening that it should be the end-ing. The entire book speaks about young people, but you also have to tell about how you are with them, to try to accept what they can teach us. Which is a lot.

If culture and work are so closely linked in Italy, why have intellectu-als and writers generally shown so little interest in the business world? I think that responsibility is also attrib-utable to a certain ideology that has long prevented us from making any distinc-tion, which I consider quite straightfor-ward, between the condition of those who are employed in a large or very large industry and those who work in a small or medium-sized business enterprise, where the conflict between owner and laborer is normally far less. Literature has often presented working in a factory as a sort of eternal damnation, and the factory itself as the place for the exploita-tion of one person over another. In Il pa-drone (The master) by Goffredo Parise, the owner is a crazy reactionary while the employee is a poor victim, overwhelmed by the madness of power. These perspec-tives have meant that, for a long time, we could not talk about business without having to tell the story of the exploited worker. Instead, during those very years Parise wrote about, the true Italian mira-cle was achieved and created the condi-

«We do not need bigger companies,but newer ones. And new entrepreneurs.

We must look among the worthy girls and boys, whom not even the cuts to our

poor put-upon schools anduniversities have managed

to discourage»

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In Italy, with a current unemployment rate around 10%, it is surprising that companies have difficulty finding 16.3% of the professionals they are looking for. This is the result of a partial incongruity between the preparation of job seekers and what the companies actually need. It is mainly the specialized professions that are lacking: what is needed are smelters, welders, plumbers, and maintainers of machinery; the textile and metallurgical sectors report above-average difficulties. Technicians are needed and the world has become aware of this: in the last two years, the number of students enrolled in vocational institutes has increased at the expense of high schools.At the same time, when the sectors that are hiring the most are tourism and services, industry is looking for its technicians and society is trying to keep up by training them.

data visualizationDv

edited by Oxygen

Workersof the world, specialize!

DATA SOURCESUnioncamere, Excelsior data; MIUR

+2%THE OVERTAKING

In 2012, for the first time the number of students at professional or technical schools exceeded those at high schools.

077

21.2%ARTISANS LACKING

The artisans are the fourth most difficult professional category to find in 2012, ranking after technicians, scientific specialists, and managers. 16.3%

THE UNAVAILABLE

Between October and December 2012, it is expected that companies will not find 6.3% of the professionals they are looking for.

1,920WELDERS AND TINSMITHS

These are among the specializations most requested by artisans, but in the fourth quarter of 2012, it is expected that the industry will only find 1,920 of them.

12.46%COLLEGE GRADUATES HIRED

In 2011, only 12.46% of all those hired had a university degree, and within the artisan sector, only 3.5%.

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A society that worksbest, where the needs of the citizens, the environment, and the communities are properly considered, is a society that also benefits fromits business

New values fora new industrialrevolution

scenarios

In order to overcome the crisis, the decline in the role of industry be must reversed. And to do that, work needs to done on the cultural level as well as on the structural level. In Italy in particular, it is necessary to rebuild industrial pride by focusing on values such as the individual and the environment.

by Gianluca Comin

Sc

tion. The validity of this diagnosis has also been recognized by the European Commission in its recent communi-cation to the European Parliament entitled A Stronger European Industry for Growth and Economic Recovery,1 which recognizes that to overcome the crisis in a lasting and sustainable manner, Europe must “reverse the de-cline of the role of its industry in the twenty-first century.” However, the view is not to revive the old industri-alization as we knew it – which guar-anteed growth to the continent for several decades – but to enter into a new industrial horizon based on new companies and new industries; those of the new machines for the produc-tion of goods (such as 3D printers); of micro-electronics and nanotech-nology; of biotech and new materi-als; and finally, of sustainable mobil-ity and smart grids. These are growth sectors on which Europe will be able to build its future prosperity through a determined and coordinated effort. And which will surely be carried out through structural reforms, such as reducing bureaucracy, investments in research, and a fiscal framework that encourages productivity and innova-tion. But the re-industrialization of our continent also involves a cultural aspect that is undoubtedly “softer”

The crisis that has thrown our econo-my into a recession that is more severe than any others our generations can remember has had at least one merit: it has corrected the simplistic deduc-tion that tended to be drawn from glo-balization, namely that, due to the dif-ferences in the cost of labor and raw materials, our industry or the produc-tion of things would move entirely to the emerging countries – China, Bra-zil, India, and the like – and Europe would have to prosper exclusively on services and finance, on immaterial production. This simplistic predic-tion is somewhat reminiscent of the one by John Maynard Keynes who, in 1930, theorized that by 2030 we would be living “in a state of abundance, satisfied and finally free to embrace the arts, recreational activities and poetry, having been freed from eco-nomic activities such as savings, the accumulation of capital and labor.” Even great economists can make er-roneous predictions. And now, after years of financial intoxication, we find ourselves dealing with an European economy that has been greatly weak-ened, and with the need to strength-en, revitalize, and renew our industri-al sectors whose know-how is crucial for defending our competitive factor in order to cope with global competi-

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After years of financial intoxication, we find

ourselves dealing with aEuropean economy that

has been greatly weakened, and the need to strengthen,

revitalize, and renew our industrial sectors

but no less important: the restoration of pride to industry itself. This is a very significant issue at the European level, but one which is particularly relevant if we look to Italy, which has always founded its growth upon its industrial fabric, from the economic boom onward. The financial excesses of the last fifteen years, followed by the harshness of the crisis, seem not only to have weakened our productiv-ity, but also the proud consciousness of Italian entrepreneurs of their role in society. It seems that the coun-try has forgotten that its well-being has been built precisely on the cour-age and ambition of a true culture of “doing.” Therefore, on the one hand, entrepreneurs are losing confidence in the future of the country (Istat’s Economic Sentiment Indicator went from 90.4 to 76.6 between October 2009 and October 2012), and on the other hand, Italians are losing their awareness of the role that business can play in building this future and no longer look upon it with the pride that is characteristic of the Germans or the French. This is confirmed by research opinion polls such as those carried out by Demos PI:2 in answer to the question “What aspect makes you proud to be Italian?” today only 8.7%

of Italians answer “our economy and our entrepreneurs.” This is a sharp drop in percentage compared to 2008, when 14.8% of those interviewed re-sponded in this way. But that is not all: in answer to the question “What are the characteristics that distinguish Italians from other people?” only 7.4% responded “our entrepreneurial capacity:” much less than the percent-age of those who responded “our at-tachment to the family” (25.3%), “the art of getting by” (20.4%), and “creativ-ity” (14%). Finally, only 11% of Italians consider businesses as a “social group that will change the country,” while 46% consider it to be the young peo-ple and 12% the schools. These num-bers reveal a clear need: if our country has to begin again, starting from in-dustry – and thus leaving behind the years in which we talked more about finance and incentives than innova-tion and investment –, a lot of work will have to be done on the level of our culture and reputation by retriev-ing the values that underlie industrial pride and improving its perception on the part of public opinion. A re-covery that has strong pillars of values on which to build and from which to commence: putting people first, the emphasis on quality, respect for the rules, and social and environmental responsibility. Putting people first is a core value that industry must still be able to make its own if it wants to drive the development of the country. A value that implies the ability to put people at the center of the develop-ment of the country and which comes to pass through the optimization of human capital, talent, and safety at work. Then there is quality, that indis-pensable cornerstone of Italian and European industry; quality that goes hand in hand with passion, creativity, and technological excellence. These are not empty words: the emphasis on quality as a production strategy, but also as an “industrial ideology,” is a radical option that involves the key roles of research, innovation, and even business ethics aimed at the con-tinuous improvement, and the rejec-tion of second best. This is a choice that has already been courageously made in many sectors of our industry, but which must be an immediately recognizable attribute of any product that is made in Italy. Another funda-mental value on which to rebuild our industrial pride is respect for the rules. All too often, in the common percep-

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NOTES1. Communication from the European Commission to the European Parliament, A Stronger European Industry for Growth and Economic Recovery, Brussels, 10.10.2012 COM(2012) 582 final.2. Sources: Demos & Pi Survey for Intesa Sanpaolo, 2011 (based on 1,044 cases); CambItalia of Demos & Pi Survey for the Republic of Ideas, 2012 (based on 1,300 cases).

EnelLabOn the occasion of its 50th anniversary, Enel promoted its Business Laboratory througha competition for Italian and Spanish start-ups with innovative projects in the energy field;the competition concluded with 215 candidates. The finalists and the winnerswill be selected in the upcoming monthsFor the first time, a private company is opening its doors to welcome a new generationof businesses and entrepreneurs, and allocating €15 million for the next three years to be made available for those start-ups that are the most innovative and aspire to change the rulesof the game of the energy world. The 15 finalists will have the opportunityto present their business and technology directly to Enel’s top management. The six start-up winners will be admitted to a preparatory program that lasts until 2014 and which provides a capital injection and a range of services to accelerate their growth. Thus, he winners will be able to develop their business while enjoying the services and full support of Enel, with the opportunity of turning their innovation into a real success in the sector of clean technologies in the energy field: from energy efficiency to renewables, from smart grids to energy storage, and from automation solutions to low-carbon technologies.

lab.enel.com

tion, the figure of the entrepreneur is linked with the definition of “evader,” and industry is perceived as being “above the rules.” Yet there are many experiences that demonstrate how industry itself can act as a center for inculcating the value of legality as a means to ensure effective competi-tion on the market: the initiatives of the Confindustria against the Mafia in Sicily, agreements on legality for large companies and government agencies, such as the one signed last May be-tween Enel and the Ministry of the In-terior. All of these are efforts to stress that good rules can be an instrument of shared growth, and not an obstacle to development. Finally, a new indus-try cannot be established unless it has a strong sense of social and environ-mental responsibility, right from the very start. Especially at a time of crisis, the role of business must go beyond the maximization of profit and be able to create value for the society in which it operates. In this sense, the di-mension of the responsibility must be integrated into the heart of the busi-ness, going beyond the concept of giv-ing back (or returning part of the prof-its through philanthropy) and moving toward the ability of the businesses to create value that is shared with the communities in which they operate. Because the society that works best, where the needs of the citizens, the environment, and the communities are properly considered, is the society that also benefits from its business.It is around these values that indus-trial pride can be re-established in the perception of the country. But it is essential that this new foundation not be reduced to a mere revival of the success stories of our past. On the con-trary, a new industrial epic should cel-ebrate the “builders of the future” of our industry, and their already coura-geously demonstrated adaptability to the great paradigm shift in the global economy, made up of new competi-tors, new ways of working, and fast and complex decisions. This new indus-trial epic has to win over the younger generation, which often cannot find within the education system the in-spiration that is needed to understand the importance of industry in the real-ity in which they live: in this sense, in-dustry will have to go into the schools, and the factories will have to open their doors to younger generations. In short, the new industrial revolution must alsobe a revolution in education.

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in-depthId

Manifacturing 2.0

The professions of workers and manufacturershave definitely entered the 2.0 era.The new “hard work” concerns digital manufacturing, ICT, and related technologies that support innovation, but also robotics and renewables.Oxygen conducted an investigation in these areas,as recounted to us by those who work in them.

by Alessandra Viola

“The word ‘crisis,’ written in Chinese, is com-posed of two characters: one represents dan-ger and the other opportunity,” John Fitzger-ald Kennedy liked to repeat, and he certainly knew all about crises, having had to face many of them. Economists and politicians, novelists and polemicists all agree: the times of crisis are crucial phases in the history of a country that could compromise its future but also relaunch it, thanks to sudden changes in the scenario. And in Italy? As we know, the times are not easy here: the labor market is in decline, or at best, stagnating. The traditional manufacturing that has supported the national economy for at least a century is collapsing under the weight of glob-al competition. Yet something is moving under-neath the ashes. Work is changing, and not only the areas of avant-garde science and technology, but also those of professional workers and man-ufacturers have definitely entered the 2.0 era.

Hardware components for ITC – Minteos (Turin)Connecting the external environment with the Internet: this is the task of the sensors and networks that record and transmit data. An increasingly important task, as the potential of the Internet is deployed for environmental protection. A wireless sensor can monitor the temperature, gas, the rain, the state of the air or soil, movements, and vibrations. And notify us in real time when something goes wrong. Installing these environmental sentinels is pio-neering work but one that is reinvented every time, and which can reveal surprises. “My job is to evaluate the client’s request and prepare a technical proposal explaining what kind of sensors would be needed to meet their needs, at what cost, and depending on what project,”

says Vincenzo Nasso, a twenty-nine-year-old mechatronic engineer who has been working for the Turin company Minteos for three years. “I am also involved in the construction of pro-totypes and their integration into our network, which collects data and makes it available on-line.” A seemingly tranquil kind of work, but which may also hold some surprises. Especially since Minteos, a former start-up incubated by the Polytechnic University of Turin, ranges from monitoring the temperature of indoor environ-ments to sensor networks positioned in woods (among others, the Park of Castel Fusano), riv-ers, mountain slopes, dams, and even sewers (in Athens). “I follow the customer from start to finish,” says Nasso. “This often takes me out of the office and I sometimes even find myself in situations where you need ... a bit of imagina-tion. Like at Castel Fusano, when we installed 1,000 sensors in the pine wood for the project Fireless. We had to put the sensors on the trees, but the pine forest is full of thorns: approach-ing them was somewhat difficult. Or when we installed sensors in the sewers of Athens to monitor the levels of waste and prevent block-ages and flowing into the sea. I believe that my Greek colleagues and I won’t easily forget the 30 gateways [“nodes” that transmit the GPRS sig-nals of the sensors to the outside, Editor’s Note] placed in the sewer chambers. Other installa-tions are simpler, but that does not mean that they are easy: like the one with sensors to moni-tor debris flows in the province of Bolzano, or the hydrometers that had to be suspended over streambeds in order to monitor them.” From design to hard work, the leap for an engineer who just graduated from the Polytechnic Uni-versity of Turin can be powerful. “When they

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hired me, I knew I was getting into a company that had a strong environmental profile. Get-ting out of the office was an idea that was very appealing to me, even though I didn’t really know what to expect. Today, I know that despite the crisis there is great room for growth in this area, and I hope that my future will be to open a spin-off of Minteos. It is a very dynamic com-pany and I think it is the right place for me.”

Robotics – Scienzia Machinale (Pisa)In this constantly growing sector, Italy can boast of some world excellence and many university spin-offs and start-ups have been founded by young graduates. Most focus on a single concept (such as robots for biomedical use), but there are also those who have chosen a different philosophy. This is the case of Scien-zia Machinale in Navacchio (Pisa), which deals with applied research and designing robotic solutions “tailored” to its customers. It so hap-pens that this group of 56 Tuscan engineers has built things that are very different from one another, ranging from a high-tech espresso cof-fee machine to the dome of a mosque in Oman, from a gigantic backdrop for a set at Cinecittà film studios to a bionic prosthesis (now applied in large Italian and American hospitals), to the “robot sculptor” that is able to shape the stern of a ship or an aircraft wing out of polyurethane,

as well as to perfectly duplicate any statue. And then a radar. And a revolutionary portable unit (the “diaptometro”) that can analyze and meas-ure the resistance of any metal without destroy-ing it, just by perforating a tiny hole on its sur-face. The company name is a quote from Leon-ardo da Vinci, who used this term to refer to mechanical engineering and you can’t say that the company is not honoring it. The list of ro-bots built would actually also be very long, but

here – and it seems this is the real innovation – the final products count less than the method of work and the relationships between people. “When you are in a close-knit group, where col-leagues like each other and work in harmony, you can always come up with something good,” says Renzo Valleggi, an engineer born in 1962 who was one of the founders of the company of which he is now the president, although he still identifies with the (highly specialized) “working class” that composes it. “Every time

Being an engineeris like being an artist:artists cannot paint a pictureif they do not knowthe techniques of painting

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a customer arrives, that is to say a company that makes a specific request, we all have a meeting together. We have 45 graduates who cover every branch of engineering. We begin to reason and to select the right skills for the project, but we also choose according to per-sonal enthusiasm and passion. For example, some people in our company are fervent en-vironmentalists and so it is more likely that they would be put to work on those issues. It is important to work on something that you like and that you are enthusiastic about: this brings an added value to their success. In the end, a group is created of 6-8 people who begin to imagine how to solve the problem that has been brought to us and then it takes us about five months to make the prototype. We are al-ways discussing it: our work is not compart-mentalized, rather, we work in an integrated manner. We see it as being the style imposed by mechatronics, the discipline that inte-grates electronics, software, and mechanics.”Today the Scienzia Machinale group invoices six million euros, but it is far from being “safe” in times of crisis. “The old crafts and the old way of doing business are facing a huge crisis,” continues Valleggi, “and in Tuscany, the situa-tion is even more serious than in other regions, because this is a land where manufacturing was very strong, particularly in the industrial districts such as Pontedera or Santa Croce. I

come from Castelfiorentino, which was the center known for making blouses. Hundreds of women were employed in their production and it is bleak to go there today and see that not even one of those manufacturers is left. For those companies, which had a very low techno-logical component, it has been almost impossi-ble to withstand global competition. Now only those who want to and know how to innovate, both in their final product and in their way of doing business, manage to stay in business.” It truly seems that ethical enterprise has a tangible value at Scienzia Machinale. “We are what the workers were in the Sixties, we are all in the same boat and if the boat sinks, you go down with it,” continues Valleggi. “There are five partners in all and we pay ourselves a salary which is almost equal to that of the employees. When the crisis was more severe, we all de-creased our salaries by 30%. And as soon as the darkest moment passed, everyone recovered their arrears with interest. Growing together is the most important thing for us. There are engineers, technical experts, and a worker who has been with us for twenty years. Each person is indispensable: we do not just have ideas, we also manufacture robots. So whoever has done the design then goes into the machine shop to build it. Being an engineer is like be-ing an artist: artists cannot paint a picture if they do not know the techniques of painting.”

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Illumination - iGuzziniInnovation as a lighting scheme. To think of every new product as the creation of a fourth dimension of architecture, the completion of a space and the creation of an object that goes far beyond energy efficiency and light output. This is the mission of iGuzzini that Roberto Pesaola, a mechanical engineer and today, at the age of 42, a design manager, deals with every day. “My work starts with the informa-tion that I get from the marketing sector,” says Pesaola, who coordinates three design teams and also the sectors that define the packaging, the instruction sheets, and the electrical wir-ing. “The specifications of the new project at this phase, among other things, concern the design, the maximum size, the range, and the performance in terms of lighting. Based on this information, I put together a team that begins to develop technical solutions, using a 3D modeling software, computer programs for the optical design, and simulators for the analysis of thermal and mechanical proper-ties. The solutions developed seek to take into account all of the aesthetic and mechanical characteristics and performance obligations, while still trying to meet all the requirements of the market and production logistics. The vali-dation of the technical solutions then passes through of a series of prototypes, necessary for both the aesthetic approval and for performing

a series of laboratory tests, including mechani-cal, thermal, and photometric assessments.” A work that is constantly evolving, and which also requires frequent updating by the engineer who joined the company 14 years ago as a de-signer and is the protagonist of a “luminous ca-reer.” “We are no longer dealing with a defined light source, as it has been for decades. The LEDs have revolutionized the industry by creating new opportunities in terms of performance, energy savings, and market but with a greater degree of design difficulty due to the need for continuous updating: every six months there is an upgrade, a new miniaturization, and new technologies. It is rather complex but challenging: each time it is a new challenge from every point of view.”

Now only those who wantto and know how to innovate, both in their final product and in their way of doing business, manage to stay in business

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INNOGEST

Work in Italy is in full transformation. New businesses and new jobs require new investments. But who supports technology start-ups in our country? The number of investors can be counted on one hand and the lack of finance and traditional credit instruments sometimes hopelessly hinders young entrepreneurs. “Supporting a young growing company today is not just about providing liquidity and delegating all the work of its development to the entrepreneur,” says Claudio Giuliano, founder and CEO of Innogest Sgr, the largest national venture capital fund dedicated to start-ups, worth over 90 million euros. “On the contrary, when we find a good business idea, not only do we invest money but we help it to take shape and form in order to let it achieve success as quickly and efficiently as possible.” Innogest invests in many different sectors and in particular, in those concerning ICT, biomedicine, and new technologies for ecology and energy. With a very special system. “Our mission is to focus on young Italian high-tech start-ups,” explains Giuliano, “by contributing to their development through an increase in capital. In practice, we do not take over another company or just introduce liquidity; instead, we support the company’s growth by acquiring shares and thus entering within it. The profit for our investors materializes when the company is sold or traded, and we give up our holdings. It takes an average of 4-5 years to get to that point, during which time the initial product is engineered and the company ‘matures.’ With the crisis, the times have become a bit longer and it currently takes almost six years before getting to the exit [the resale of the shares, Editor’s Note]. Selling a company on the market is more difficult today, because there are fewer industrial buyers and the stock market’s appetite worldwide is more limited. With the recovery, however, the time frame will shortenonce again.”Right, the recovery. Meanwhile, though, what is happening in the world of Italy’s most promising young entrepreneurs? “The desire

to do business is not dormant and the crisis has indeed stimulated new business initiatives,” assures Giuliano. “The decline of jobs that could be called traditional is pushing more young people to start their own business and entrepreneurial activity.” Founded in 2005, Innogest has not forgotten that it was a start-up itself in recent times, even though today it has 20 subsidiaries and a total investment of 50 million euros. “We work with a material that is made up of two components: the idea, or the product, and the entrepreneur, with his energy, but also his fears,” says Giuliano. “Being entrepreneurs ourselves helps us in deciphering the various dynamics and creating the right relationship.”

Op

opinions

Let’s start with a novel. It is called Makers and was written by Cory Doctorow a few years ago. One of the key phrases is: “In the future there will not be names like General Motors, General Electric, or General Mills, but new businesses called Local Motors, Local Electric, Local Mill.” That sentence captured the dawning of a phenomenon, which would then have the honor of being on the cover of two is-sues of “The Economist” and the subject of various essays on the so-called “third industrial revolution.” That of the mak-ers, or that is, of personal fabri-cation and of the factory which is the networking and which dematerializes to become, at a minimum, the home PC. But if that is “the future,” what is the future of the big companies, the multi-nationals, and even the factories themselves? The answer to this question requires taking a quick step back. In 2010, the Kauffman Foundation, one of the most important players in the global ecosystem of innovation, published a very thorough research

entitled: The Importance of Start-ups in Jobs Crea-tion and Jobs Destruction. The study, limited to the American reality and based entirely on data from the U.S. Census Bureau, revealed a number of surprising truths. The first: from 1977 to 2005, the existing businesses were “net job destroyers,” losing a total of a million jobs per year; during the

same period, the new compa-nies added three million jobs. The second truth is even more interesting: during periods of recession, the ability of start-ups to create jobs remains con-stant, while existing firms are highly sensitive to economic cycles and, therefore, more af-fected by the crisis. The third truth is the knock-out blow: the

postulate according to which companies get bigger with the passage of time inevitably does not work anymore, seeing as U.S. companies with less than one year of existence create a million jobs, while those with more than 10 years stop at 300,000.The findings of the Kauffman Foundation were naturally an invitation to the U.S. government to re-

START-UPMENTALITY

by Riccardo Luna

“When faced with change, the multi-national giants stumble and fall.” So in order to keep up with the pace of change, the model to follow is that of the start-ups: because they are the

basic unit of the cloud economy, are very adaptable to change, and incredibly effective in doing a single thing.

The postulate according to which companiesget bigger with

the passage of time inevitably does not

work anymore

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think its policies for economic growth, to pay less attention to the defense of employment in large companies and to favor the creation of start-ups (new companies with a high rate of innovation). Of course, the phenomenon in progress is not lim-ited to the United States, although it is more evident there. The September 2012 issue of the English edi-tion of the monthly magazine “Wired” published an invitation from a leading venture capitalist for everyone to adopt a “start-up mentality:” “The cha-os in which we find ourselves is the fundamental reason why one should work for a start-up or a cor-poration that acts as a start-up. Because start-ups are the natural evolutionary response to this new situation. Most large companies are character-ized by the quality of their planning processes, but these become objectives that clash with the reality and the results are measurable. When faced with change, the multi-national giants stumble and fall. In fluid markets, where each asset can be priced and traded easily, start-ups can grow because they are the basic unit of the cloud economy and are very adaptable to change and incredibly effective in do-ing a single thing. The big corporations are unable to keep up the pace by adapting to the speed needed to remain the best in all aspects of their business. And the same goes for the people who work there, whereas in a start-up business, experience must evolve quickly, and adaptability is the main talent.”All this may seem to be a tombstone for the large companies but it would be a superficial reading of the data and the phenomenon in progress. Be-cause if the future is innovative start-ups, that is ex-actly what the large companies need to do: go back to being start-ups. Or in the words of the previously-mentioned English edition of “Wired,” “to act like a start-up.” This is not a play on words or a slogan. That is exactly what Steve Jobs said of his Apple: “It is the largest start-up in the world.” And it is the dis-tinctive feature of Facebook, in comparison to the others, according to its founder Mark Zuckerberg: “There are very few of us, we are agile and we are al-ways in beta.” That is, in constant experimentation.No one has explained this mentality better than Reid Hoffman, a star of Silicon Valley, co-founder of LinkedIn, and co-author of the bestseller The Start-up of You. “We are all a work in progress ... Great people, like great companies, are constantly evolving. They are never finished and never fully developed. Every day offers an opportunity to learn more, do more, and grow even more. Be-ing in a state of permanent beta must be a com-mitment to growth that lasts a lifetime.” Hoff-man is speaking of individuals and corporations. But whereas in the first case the things to do are clear, the situation is different for a corporation. There are two ways to “become a start-up” when you have thousands of employees around the world and a necessarily rigid organization: the first – which is actually a shortcut – is to buy start-ups, and then to buy innovations with the people who made them, hoping not only to bring patents into the fold but to also be contaminated by a way of being.The second way is much more complex but gives

In fluid markets, start-upsgrow because they are the basic unit of the cloud economy,are very adaptable to change, and incredibly effectivein doing a single thing

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start-up mentality | oxygen

work until 3 in the morning. We were all involved in the creation and development of the products. After all, Apple was the company with the lowest number of people who went off in search of a bet-ter place, and that says a lot about what the employ-ees thought. Moreover, there was also a system of sharing profits based on participation in the share capital of the company. Finally, working in a com-pany whose boss put so much effort into having the best product in the world, they couldn’t help but react positively when asked to make sacrifices.”The first Apple says a lot about the start-up men-tality needed in order to grow, but it is also a dif-ficult model to follow for organizations that are already mature. In that case, one can always imi-tate what the U.S. coffee shop chain Starbucks has done recently to find a new way to interact with their customers: instead of proceeding with minor adjustments, it decided to find out what approach a brand new company would have. And then it was expressly created. A start-up. It is called 15th Coffee and Tea and it has been made into a live learning lab for experimenting in design, sustainability of materials, and new products.

better results: creating free zones in your organi-zation where there are different rules. Less bu-reaucracy. Propensity to risk. Profit sharing. For example, as Steve Jobs did when a “team of pirates” created the first Mac while the “Apple company” was focused on Lisa. The executive vice president at that time was a former IBM executive Steve Jobs had hired after meeting him in a bar: Jay Elliot. Here is what he recalls of the work environment of the early days at Apple: “The most obvious thing was the enthusiasm, the desire to do and create. We realized that we were all working together to change the world and that motivated us and made us very proud. The last thing we’d think of would be to take a vacation. Steve Jobs was capable of phoning at three in the morning to tell us that he’d had a great idea. And it didn’t bother anyone at all. Stress was not seen as a negative component, it was something that pulled you in, which caused an-other sensation, because we realized that we were about to cross a new frontier. Apple was not the typical company where you had to arrive at 9 a.m. and you left at 5 p.m. We worked until late. Maybe you’d come to the office at noon, but then we’d

We are all a work in progress. Great people, like great

companies, are constantly evolving. They are never

finished and neverfully developed

The makersrevolution

contexts

Creative digital and technology experts, the garage innovators who, with their innovations and new business models, are creating what many do not hesitate to define the “third industrial revolution.”

by Simone Arcagni

If you ask Chris Anderson, the director of “Wired” and someone who knows all about technology and the future, he will tell you what he already wrote in 2010 in his famous article In the Next Industrial Revolution, Atoms Are the New Bits and has been repeating in many meetings and conferences: namely, that the revolution concern-ing the makers is a true revolution in the world of industry and commerce. But who are the makers? The mak-ers are creative digital and techno-logical experts, the garage innova-tors who, with their innovations and new business models, are creating what many do not hesitate to define a new “industrial revolution,” or better yet, the “third industrial revolution.”The basis of the phenomenon of the makers has to do with ideas, plans, and projects that the digital world turns into objects almost immediate-ly, without the normal rigmarole that goes on with industrial design, plan-ning, prototypes, and manufacturing. But to understand the maker revolu-tion, we have to enter into a new world of production where there are a few buzzwords. The first are “open source” and “creative commons,” and thus, sharing: putting ideas together and put-ting them into circulation. A model in which the normal concept of copyright is exceeded in order to make the ideas

Co

and projects open to possible amend-ments, changes, and customizations. A universe of knowledge that is based on the principle of exchange, just like the Arduino circuit of Massimo Banzi, an engineer known worldwide as one of the fathers and gurus of the maker way of thinking. Invented in 2005, as reported in Wikipedia, “Arduino is an open source framework that enables rapid prototyping and quick learning of the basic principles of electronics and programming.” With Arduino, even those unfamiliar with program-ming languages can have the tools to create and design, and therefore imple-ment things, objects, and prototypes. Other buzzwords are “crowd-founding” (a collaborative process to seek fund-ing for a project) and “crowd-sourcing” (a process of collective development of a product), that is to say, a system of funding “from below” which involves the participation of a network and a community in the making of the pro-ject. We are talking about a new eco-nomic model, starting with the users themselves and providing for the rais-ing of capital (usually small amounts, but lately the collection of quite sub-stantial budgets has been registered), not according to the model of share-holders, but rather in the form of a real participation in the execution of an idea and in looking for the budget to

achieve it. The numbers of Kickstarter, the famous American crowd-funding site, are impressive: millions of dol-lars have been raised and there are hundreds of thousands of financiers.The quest for capital is changing, as are the design, construction, and busi-ness models. And you do not neces-sarily have to rely on eBay to sell items, you can do it yourself from your own website, from your blog, or even on your own Facebook page. Leave it to Blom-ming, a system to sell online without intermediaries: it is the e-commerce of the next generation that uses social networking, which is why it is called social commerce. It is not that the mak-ers want to change the business sys-tem, they simply feel like outsiders and have therefore created another one on the Internet, based on the social com-munication of networking. Just think of the case of Zooppa, a social network and a community that brings together creative people who are put to the test in creating advertising for brands and companies that commission projects. Let’s talk about small, or even individ-ual, entrepreneurship which is based on the philosophy of DIY or “Do it your-self;” this means you need to have a lot of imagination and technology that is easy to use and, of course, not too expensive. Such as the 3D laser printer that allows you to create solid objects easily. Vecto-

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realism, for example, is a website that offers users the ability to easily design their own projects and to print objects. The 3D laser printer is a small workshop for the home. Nothing like the Ford fac-tory and job hours! But beware: the true economic aspect of the maker lies in the craftsmanship. An artisanship of ideas and of finding the ideal spot on the In-ternet and social networks. New facto-ries, but also real laboratories, such as Fab Lab: another key word in the world of makers. The Fab Lab (Fabrication Laboratory) is made up of small labo-ratories and workshops dedicated to the makers and the digital fabrication that is spreading somewhat all over the world, allowing anyone to submit their ideas in the form of files and see them made in a short time and very inexpen-sively. Along with all the games, trashy objects, and preposterous “horrid-ness,” it is not unusual to come across some original ideas. And so it is not sur-prising that the search for the success-ful designers of the future is now taking place among these maker fans. The “do it yourself” artisan philosophy is so in-novative for some people that a term attempting to describe it has even been invented: thinkering. The term (coined

in 2007 by John Seely Brown, director of research at Xerox and head of the Xerox Parc research center in Palo Alto) is the result of the union of thinking and tink-ering: a new philosophy of “thinking/touching/doing,” a kind of conceptual model that has to do with its being put into act and touch, a thought that takes place in a creative and shared action.The universe of the maker is, therefore, a composite world and includes the world of start-ups, original ideas to be developed, as in the case of CicerOOs, that maps the places in the world in which to make data available to tourists who use the Internet to plan their holi-days. The history of CicerOOs involves two young people, Daniele Cassini and Daniele Viva, and their idea which has become a business. From tour-ism to the weather: instead, Metwit is a social network where users exchange weather news, thus becoming the first shared platform for weather forecasts. We have already discussed the role being played by Chris Anderson and the magazine “Wired” to propagate the maker idea. But an equally im-portant role has also been played by MIT, the famous Massachusetts Insti-tute of Technology, the birthplace of

WORK IN PROGRESSThe symbol of infinity containing a plus and a minus: this is the logo of Arduino, the platform open to everyone for creating anything. A creative spirit that is infinite because the ideas are put into circulation and exchanged continuously; a world that is a work in progress.(arduino.cc/en)

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the makers revolution | oxygen

the Fab Lab. Furthermore, the move-ment also has its own organ, “Make,” a magazine founded by the guru of this new “thinking,” Tim O’Reilly, to-gether with Dale Dougherty. Among other things that can be attributed to these two is the definition “Web 2.0.”“Make” is a monthly magazine that soon became the official organ of the maker world and is published by O’Reilly Media, known for its software manuals and being a point of refer-ence for spreading the open source phi-losophy, for technological innovation and the world of start-ups. A magazine entirely dedicated to a phenomenon which, until recently, has been defined as a subculture made up of hobbyists and amateur designers, although by now the movement has grown consid-erably in size, also testified by the entry in this field of a giant such as Autodesk.And to allow the makers to get togeth-er and exchange ideas, the magazine “Make” has also organized a periodic event since 2006, the Maker Faire, where makers from all over the world converge, bringing their ideas, proto-types, and business models or, quite simply, absurd objects arising from an imagination that can do almost any-

thing with a computer, software, a con-nection, and a printer. Simple, isn’t it?But the phantasmagoric world of the makers, shared by designers and pro-grammers, hobbyists and geeks, arti-sans and young (even extremely young) entrepreneurs of the future, also has the support of a cult blog such as Boing Bo-ing, founded by Mark Frauenfelder, a journalist who made his reputation in the preparation of “Wired.” Boing Bo-ing is one of the most popular and influ-ential blogs in the world. One of its edi-tors and most prestigious writers is the science fiction writer Cory Doctorow, who also devoted one of his novels to the maker phenomenon, Makers, which he defines “a book about people who hack hardware, business-models, and living arrangements to discover ways of staying alive and happy even when the economy is falling down the toilet.”Something is changing. Something has already changed! New production mod-els are in the offing: the makers may not be the answer to a capitalism that is in crisis and has somehow aged more quickly than you would think, but it is certainly a breath of fresh air and there are social, cultural, and financial mod-els that have already begun to offer it.

It is not that the makers want to change the

business system, they simply feel like outsiders

and have therefore created another one on

the Internet, based on the social communication

of networking

ditional production on an assembly line. The machines used for industrial pro-duction are efficient and cost-effective when they have to produce thousands of identical pieces, but programming them to create a single piece is difficult and, in proportion, enormously expensive. For some time now, however, 3D print-ing has also been used to produce fin-ished parts to be put on the market in small quantities, plus it allows for customizing them one by one. Today, 28% of investments in 3D printing is

used for final products, and according to analysts, the percentage will reach at least 50% within two or three years (even though prototyping will always remain an important application). But how does this technology work? For the user, it is not very different from any other kind of printing. You prepare a design on the computer and press “print” and out of the 3D printer (which is just slightly bulkier than a normal one) comes a piece of a lamp, a table, a

Do-it-yourself production: 3D printing

in-depth

A breath of fresh air for industry could comefrom 3D printers. Technology and design servingthe imagination of the makers to create plasticobjects. The age of personal fabrication has notreally begun yet, but it may never have been so close.

by Nicola Nosengo

The ability of “The Economist” to be far-seeing should be acknowledged. Back in 2007, when virtually no one outside of the inner circles was talking about 3D printing, the English weekly dedicated articles and covers to the “new industrial revolution” that lay ahead on the horizon, thanks to this new technology which was identified as one of the keys to the future indus-trial revival. According to “The Econo-mist” back then, once the economies of scale had lowered their prices enough, 3D printing would do for the manu-facturing industry what the personal computer had done for information. Today, 3D printing is a well-known real-ity, and not just for the far-sighted editor of the English weekly. And that goal of ac-cessibility has almost been achieved. We are almost at the tipping point beyond which it will become a “home” technol-ogy. Today, the basic models of 3D print-ers are practically accessible to (almost) all users. Tools such as the MakerBot’s Replicator cost just over $2,000. More than a 2D printer, but no more expen-sive than a scooter or a high-end laptop. And some also go below those prices, such as the Italian printer Sharebot, an ultra-basic model presented during the last Furniture Expo in Milan. It sells for 900 euros, the first to have shattered the psychological threshold of 1,000 euros. 3D printing arrives as a solution for cre-ating industrial prototypes, to be devel-oped and tested before moving on to tra-

Id

canoe... The printer basically adds thin layers of material according to the draw-ing, to bring out the full object. This why one also speaks of “additive” manufac-ture, while traditional industrial manu-facture is “subtractive” (one starts from a block of material, whether metal or plastic, and cuts away the parts that are not needed to obtain the desired shape. As you have probably guessed, 3D print-ing leads to a great saving of material).The techniques for laying out the sev-eral layers of plastic may be different, and you can choose between laser or inkjet 3D printers. Some printers use a system similar to the inkjet for spray-ing liquid plastic onto a mobile support. The plastic is immediately dried and solidified by using ultraviolet radiation, after which the support moves slightly to go on to the next layer. Another tech-nique involves dissolving the plastic by means of a moveable head which cre-ates a thin filament, and then goes on to create subsequent layers in this way. A third way uses powders as starting materials, spread on a mobile tray and solidified with a splash of glue or fused by laser to take on the desired shape. Complex structures with gaps or pro-truding parts are created by using gel, which is added subsequently to increase the support at particular points, or by leaving the unmelted powder in chosen points, which is then washed away to create the hole. The most sophisticated printers can simultaneously use differ-

You prepare a designon the computer and press

“print” and out of the3D printer comes a piece

of a lamp, a table,a canoe...

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ent materials to create objects that are rigid in some places and soft in others. It is possible to produce virtually everything with these systems, or a combination thereof. Of course, you need the expertise to handle the CAD (Computer Assisted Design) software, which is quite different from just us-ing Word. And it takes a certain profi-ciency in materials, plus the possibil-ity and capability to purchase them. For this reason, in addition to the price of the machinery, making plastic ob-jects at home is not really within the reach of everyone. Precisely for this rea-son, the Fab Lab came into being: a hi-tech craft workshop that, with the help of 3D printers and other technologies, produces (or repairs) plastic objects at the request of customers. Do you want an electronic device, a piece of furniture, or a boat, and no company produces it the way you want? Go to the nearest Fab Lab and they will even make just one or two pieces for you, something a large

company would never do. The refer-ence model is the Fab Lab that was cre-ated at the Massachusetts Institute of Technology (MIT), set up by the Center for Bits and Atoms, also at MIT and di-rected by Neil Gershenfeld. Stemming from the thought that the digital revolu-tion is only a part, and not even the most interesting part, of our future, their idea was to bring computation into the physical world: to create programs that manipulate atoms, and not just bits.Fab Labs are springing up like mush-rooms all over Italy. The first arose in Tu-rin on the occasion of the celebrations for the 150th anniversary of the Unifi-cation of Italy. Defined by its founders as “the child of industry, from which it inherited the qualities of the precision and reproducibility of the products; the grandson of craftsmanship, from which it learned custom design; the brother of open source, with which it shares the philosophy of free exchange projects.” Behind all this, foremost was Massimo

Banzi, father of Arduino, an open source hardware and software electronic plat-form, which basically allows anyone to create smart devices (from environment sensors to the control unit for machines to processors for every need). It was Ban-zi who pinpointed digital fabrication as the topic on which to focus, in order to present the possibilities that innovation offers Italy for its industrial revival. Every-day objects that have come out of the Fab Lab include a set of wall hooks for hang-ing tools, small useful inventions like a cell phone holder to mount on a bike, and professional equipment that would cost an arm and a leg if they were mass-produced versions, such as a support for steadycam cameras. Even though the celebrations of the Unification of Italy are over, the Fab Lab Turin is still stand-ing and is still the main reference point for the Italian community of makers.Meanwhile, in Milan, the Frankeinstein Garage came into being, which in addi-tion to providing all of its equipment (3D

Fab Labs are springingup like mushrooms all over Italy. The first arose in Turin on the occasion of the celebrations for the 150th anniversaryof the Unification of Italy

SALES GROWTHIn 2007, 66 3D printers

costing under $5,000 were sold – the

professional ones are around $73,000 –, but

in 2011, the number rose to 23,265 (2012

Wohlers Associates report). “Basic” 3D

printers costing under $500 have recently

come on the marketin order to reach a

broader public.

099

printing but also CAD design, laser cut-ting, and other more traditional “sub-tractive” technologies), organizes cours-es and workshops to bring together all those interested in personal fabrication. Precisely with the help of Frankeinstein Garage, Andrea Radelli, a twenty-seven-year-old maker, made Sharebot, a 3D printer that is extremely affordable for all budgets, which he created by simpli-fying a 3D printer already on the market. Radaelli sells the kit to assemble it for 900 euros via the Internet. The entire project is obviously open source, so anyone willing and able to do so, can not only buy it but also improve it and modify it to suit their own needs. Then, if you never want to leave the house, there is Vectorealism, which offers eve-rything online: from consulting with a designer on carrying out a project to the choice of materials and the possibility to order one’s own project or prototype. Just how lively the makers scene is, and how similar to what the world of pro-

grammers was only about thirty years ago, was shown at the Smash 3D De-sign contest held last October 20th in Milan. Eight active teams, supported by the same number of teams of opera-tors of 3D printers, were challenged on the theme “show your grandparents the wonders of 3D printing,” with the assignment to “create an object that is an example and that encompasses all the ‘coolness’ of 3D printing.” And the competitors did just that, such as the winning team Jambro of Filippo Mambretti and Jennifer Carew with their Mino, a family of assorted walk-ing stick “legs,” capable of transform-ing this everyday object into a sort of “Swiss army knife” which can adapt to walking on the grass, on sleet, or on the sand by simply changing the “leg.”Or the second place project, Swingth-ing, a small addition that turns that same walking stick into a golf club. Zooilab took third place with a set of molds for cakes and meatballs in-

spired by video game characters. Sim-ple, minimal, seemingly “harmless” objects but which, until five years ago, could only be produced industrially, as-suming there was sufficient demand.Get ready to see more and more Fab Labs. And be prepared for an explo-sion of personal fabrication resulting in unpredictable (including economic) consequences. According to Gerhsen-feld of MIT, the stage where we are now with digital fabrication is the same as it was with computers at the time of the PDP (Programmed Data Processor): an intermediate “developmental phase” of the computer (in the late Sixties and early Seventies) in between the huge mainframe and personal computers, in which computation came within the reach of small workgroups, and in which the Unix operating system that is still the basis of much of the com-puter science that surrounds us was developed. In short, the phase that sets the stage for the mass explosion.

do-it-yourself production: 3d printing | oxygen

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Whether in the form of logs, pellets, or wood chips that end up in the stove, wood is still an important resource for domestic and urban heating. It populates our forests. It is a local resource (a resource that is often forgotten, that no one cares about). And to all intents and purposes, it can be defined as a renewable source: every tree that grows absorbs the CO2 emitted during the combustion of a piece of wood. There is no denying it: people like flames. Fire is fascinating: design and hi-tech have made it evolve technologically, in private fireplaces and boilers for district heating.

We are used to talking about wood stoves or fireplaces, but the market contemplates a combustion apparatus that is increas-ingly complex and equipped with sophisticated devices, requiring greater profes-sionalism and responsibility from those who work to install and maintain the systems. Manufactur-ers, stove-repairers, and chimney sweeps share a professional network that cannot be improvised: it re-quires continuous updating, compliance with installation regulations, and territorial monitoring services. Since 2008, the Italian govern-ment has required that all installers of chimneys, flues,

Twice upona time,there wasa chimneysweep

oxygen versus co2

“Now as the ladder of life ‘as been strung/ You may think a sweep’s on the bottommost rung/ Though I spends me time in the ashes and soot/ In this ‘ole world there’s no ‘appier bloke/ Chim chiminey, chim chiminey, chim chim cher-oo!/ Good luck will rub off when I shake ‘ands with you/ Or blow me a kiss and that’s lucky too.” The chimney sweep from “Mary Poppins”is still wearing the same uniform,but he has, in fact, become a modern biomass technician.

by Stefano Milano

Vs

Chimney sweep—

This is a profession that is being constantly updated. The rules

of the game change andit is important to understandwhat you need to know forworking, about the what

and the how

101

and wooden biomass heat-ing systems (hence, stoves and wood pellet-fueled fireplaces) must be qualified for the profession and can/should provide declarations of conformity for each system installed. Having specialized technicians who move in institutionalized channels has launched a gigantic mapping of the territory. So what does that mean in the tsunami of Big Data? To feel the pulse of the situation, and identify and provide solutions for the possible risks of a fire system: a fire-place that does not draw well, an old system that is malfunctioning.What happens to the chimney sweep from Mary Poppins in this scenarioof revolution? He becomes a qualified service technician of ventila-tion channels, transport vapors, and smoke systems. He must know a bit of everything: the regulations and cleaning techniques, traditional tools, andmodern instruments.He works closely with the stove-repairer to control the ventilation ducts before the installation of fireplacesand stoves.But it is not uncommon to find him working with the managers of largepower plants. The master chimney sweeps are a tried and true con-clave which meets regularly

to discuss technical, regula-tory, and operational issues of the profession. This is a profession that is being con-stantly updated. The rules of the game change and it is important to understand what you need to know for working, about the what and the how. Choosing biomass as fuel is becoming increasingly important in achieving the renewable goals set by Eu-rope and currently subject to incentives. Some manu-facturers are clamoring for mandatory training courses dedicated to operators, dealers, installers, and main-tainers. Lombardy has in-vented a register of regional plants (Curit), establishing that each plant above 4 kW is considered a heating system and therefore must be registered and undergo regular maintenance. An example of excellence: ANFUS, the national asso-ciation of chimney sweeps and chimney specialists, that has been trying for years to create a network among chimney sweeps, chimney-repairers, and producers – a grassroots action that, as in other sec-tors of the energy industry, replaces traditional political action and tries to get the stakeholders of a certain territory seated at the same table so they can find new solutions to the energy issue. Chimneysweep democracy.

What happens to the chimney sweep from Mary Poppins in this

scenario of revolution?He becomes a qualified service

technician of ventilationchannels, transport vapors,

and smoke systems

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Hammer. Blade screwdri-ver. Phillips screwdriver. Drill. Wrench. Saw. Gau-ge. Pliers. Parrot pliers. Vice. Allen screws. Die. File. Plane. Punch. Scra-per. Sickle. Knife. Mallet. Glue. Awl. Spatula. Team. Level. Nails. Ruler. Adhesive tape. Rake. Mower. Shears. Work gloves. Borer. Burin. Cut-ter. Bill-hook. Chisel. Tap wrench. Mortise. Staple. Height gauge. An entire world of words, the vast majority of which have never been heard before, that exists locked away in a strange and sturdy box: dad’s toolbox. The tools

and work equipment which every man is jea-lous of – more so than of his own wife or favorite chair – have been toys for centuries. Tools that have been lost in the hi-story of man, and yet we can find them today in the museums of history and prehistory, almost always reproduced in different scales and ma-terials for little children. They like tools. Children obviously feel more like adults when maneuve-ring them, experimenting with them, getting to know them. Playing with them favors the process of emulation of adults

Il lavoro hardche nonspaventai più piccoli

science at the toy store

Dad is far more jealous of his toolbox than of his own wife and his favorite chair. Drills. Wrenches. Hammers and garden tools. Workshop tools are ancient toys. A brief excursus on toolbox toys in the nineteenth, twentieth and twenty-first centuries. From wooden tools to the sophisticated reproductions by Bosch.

by Davide Coero Borga

Ts

Toy tools —

However, the habit of learning through playing

is a trait that mankind shares with many other

animal species

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and stimulates the crea-tivity of each child. And if playing and curiosity are the key elements of a scientific approach to the world, work tools and instruments of the tech-nical arts are the main in-gredients of a good toy! Even for today’s children. On the other hand, the objects of science and technology are not new to promotions in the field, and in the past they were successful as actual toys: from the dishes in the kitchen to laboratory instruments from the scientific world, from the work tools of a mechanic to hydraulic implements. The toy tools say a lot about a tendency to turn some tools invented by human beings into edutoys. However, the habit of learning through playing is a trait that mankind shares with many other animal species, for which the toy plays an important role in the learning of knowledge essential to survival. Think of the obstinacy with which a dog chews up slippers and the sticks it retrieves. Watch the ambushes that the cat prepares for a ball of yarn or rubber balls, as it maneuvers among carpets and sofas to pounce on them. These are the habitsof predators.If we take this instinct to play with objects into ac-count, it is not surprising that mankind still designs

and produces on an industrial level products conceived for this purpo-se. Some categories of playing are probably part of a common cultural background of various nations. Others have become indispensable to the formation of the mo-dern human being. The toolbox is fully entitled to be in this category of toys. Enough so to justify its global distribution and “cloning.” They come in different sizes, prices, and makes. Without fail, there is always a hammer, screwdrivers, and pliers, but there are hundreds of versions of toys for the little laborer. And the buyers are incre-asingly heterogeneous. Little girls want to have fun with the tools of the bricoleur, too. In times of ever newer technologies, a striking experiment was con-ducted by the group Robert Bosch GmbH, with their completely revised version of the old toy toolbox which has recently arrived in toy stores. Along with the bolts and hammers, they have added electric drills and screwdrivers! And it’s not just children who play with them: even adults buy the kit for doing small household chores. In short, they officially go to the toymaker’s to accompany their child and come out with a bag full of toys strictly for children 0 to 99 years of age.

The toy tools say a lot about a tendency to turn some

tools invented by humanbeings into edutoys

Oxygen2007/2012Andrio AberoGiuseppe AccorintiZhores AlferovEnrico AllevaColin AndersonMartin AngioniIgnacio A. AntoñanzasPaola AntonelliAntonio BadiniRoberto BagnoliAndrea BajaniPablo BalbontinPhilip BallUgo BardiPaolo BarelliVincenzo BalzaniRoberto BattistonEnrico BelloneMikhail BelyaevCarlo BernardiniTobias BernhardMichael BevanPiero BevilacquaNick BiltonAndrew BlumBorja Prado EulateAlbino Claudio BosioStewart BrandLuigino BruniGiuseppe BruzzanitiMassimiano BucchiPino BuongiornoTania CagnottoMichele CalcaterraPaola CapatanoMaurizio CapraraCarlo CarraroFederico CasalegnoStefano CaseriniValerio CastronovoIlaria CatastiniMarco CattaneoSilvia CerianiCorrado CliniCo+Life/Stine NordenSøren RudElena ComelliAshley CooperPaolo CostaManlio F. CovielloGeorge CoynePaul CrutzenBrunello CucinelliPartha DasguptaMarta DassùMario De CaroGiulio De Leo

Michele De LucchiRon DemboGennaro De MicheleGianluca DiegoliFabrizio DragoseiPeter DroegeFreeman DysonMagdalena EcheverríaDaniel EgnéusJohn ElkingtonRichard ErnstDaniel EstyMonica FabrisCarlo FalciolaAlessandro FarruggiaFrancesco FerrariPaolo FerriTim FlachStephen FrinkAntonio GaldoAttilio GeroniEnrico GiovanniniMarcos GonzàlezJulia GoumenDavid GrossSergei GurievJulia GutherSøren HermansenThomas P. HughesJeffrey InabaChristian KaiserSergei A. KaraganovGeorge KellParag KhannaSir David KingMervyn E. KingHans Jurgen KöchCharles LandryDavid LaneManuela LehnusJohan LehrerGiovanni LelliFrançois LenoirJean Marc Lévy-LeblondIgnazio LicataArmin LinkeGiuseppe LongoArturo LorenzoniL. Hunter LovinsMindy LubberRemo LucchiTommaso MaccararoGiovanni MalagòRenato MannheimerVittorio MarchisJeremy M. MartinPaolo Martinello

Massimiliano MascoloMark MaslinIan McEwanJohn McNeillDaniela MecenateLorena MedelJoel MeyerowitzStefano MicelliPaddy MillsGiovanni MinoliMarcella MirielloAntonio MoccaldiRenata MolhoCarmen MonfortePatrick MooreLuca MorenaLuis Alberto MorenoRichard A. MullerTeresina Muñoz-NájarUgo NespoloNicola NosengoHelga NowotnyAlexander OchsRobert OerterAlberto OliverioSheila OlmsteadVanessa OrcoJames OsborneRajendra K. PachauriMario PagliaroFrancesco ParesceClaudio PasqualettoAlberto PastoreFederica PellegriniMatteo PericoliEmanuele PeruginiCarlo PetriniTelmo PievaniTommaso PincioMichelangelo PistolettoViviana PolettiStefania PrestigiacomoGiovanni PrevidiFilippo PreziosiVladimir PutinMarco RainòFederico RampiniJorgen RandersCarlo RattiHenri RevolMarco RicottiSergio RisalitiKevin RobertsLew RobertsonKim Stanley RobinsonAlexis RosenfeldJohn Ross

Marina RossiBunker RoyJeffrey D. SachsGerge SalibaJuan Manuel SantosTomàs SaracenoSaskia SassenAntonella ScottLucia SguegliaSteven ShapinClay ShirkyKonstantin SimonovUberto SiolaFrancesco SisciCraig N. SmithAntonio SofiLeena SrivastavaFrancesco StaraceRobert StavinsBruce SterlingStephen TindaleViktor TerentievChicco TestaChiara TonelliMario TozziDmitri TreninIlaria TurbaLuis Alberto UrreaAndrea VaccariNick VeaseyViktor VekselbergJules VerneUmberto VeronesiMarta VincenziAlessandra ViolaMathis WackernagelGabrielle WalkerElin WilliamsChanghua WuKandeh K. YumkellaAnna ZafesovaAntonio Zanardi LandiEdoardo ZanchiniCarl Zimmer

Testata registrata pressoil tribunale di TorinoAutorizzazione n. 76del 16 luglio 2007

Iscrizione al Roc n. 16116

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INDUSTRIALPRIDEIndustry is security because it is manufacturing, creation, unity of spirit and matter, the body and soul of society;a security that is undermined today by the global economic crisis. So for Italy –  the second largest manufacturing country in Europe – doing things right is not enough:it must know how to do them better than others.In order to do so, industrial pride must first be restored, valuing work in every role, making space for creativity and initiatives, connecting small businesses through networks and putting the larger ones in a position to meet the new needs and new global technological trends. The key to success is continuous innovation. This issue of Oxygen tells many success stories, at the dawning of what is already being called the “new industrial revolution,”which is going on throughout the whole worldand is revitalizing the quality manufacturingof the historically most industrialized countries.

«The world is on the brink of a new era. This shift in fortunes of the developed and developing world in manufacturing will begin to go into reverse and manufacturing in the rich countries will stage a come-back»

Oxygen is an idea by Enel,to promote the disseminationof scientific thought and dialogue.