I CAPITELLI Pandemic Knowledge
Managing the crisis, planning the future
Luiss.MasterClasses edited by Andrea Prencipe Pandemic Knowledge This volume represents a selection of the MasterClasses held at Luiss between April and July 2020. © Luiss University Press ISBN: 978-88-6105-618-3 Layout Livia Pierini Translated by Translate Srl First published in January 2021 During the height of the lockdown, Luiss launched a series of virtual meetings in order to provide the conceptual tools suitable for interpreting this situation through “viable” ideas, that is to say, capable of having a tangible effect on reality. Thus, the Luiss.MasterClasses were born, dedicated to an in-depth exploration of pandemic-related issues. Internationally renowned experts presented comprehensive reflections based on their research and discussed the economic, social, political and legal implications with “guests of honour” from the industrial, professional and academic spheres. It was an initiative that sought to fill the void in our lives that resulted from the lockdown when we were confined inside the home. Andrea Prencipe is Rector of Luiss and Professor of Organisation and Innovation. He is also a member of the UNHCR Italy Advisory Group and the Scientific Committee of the Enel Foundation. Previously, he was Professor at the University of Chieti-Pescara “G. D’Annunzio”, Visiting Professor at the Rotterdam School of Management and the BI School of Management in Oslo and Honorary Professor at the University of Sussex. He has also been a speaker at international universities such as Harvard Business School, London Business School, the University of Michigan, the University of Oxford, the University of Linköping and Cass Business School. His research activities focus on innovation management issues (including technological and organisational innovation), project- based organisations and the relationships between social capital and innovative processes. He has published scientific papers in international academic journals such as Administrative Science Quarterly, Industrial and Corporate Change, Organization Science, California Management Review and for Oxford University Press. Table of contents
Table of contents
Introduction by Andrea Prencipe
POLITICS AND SOCIETY IN THE FACE OF THE PANDEMIC 1. Global pandemics and future responsiveness of European health systems with Pierluigi Antonelli, Paola Mattei and Paola Severino
2. People, technologies and processes during the pandemic with Terri Griffith and Marco Morelli
3. Pandemics and Data Science with Giuseppe Francesco Italiano and Luca Tomassini
4. International politics during and after the pandemic with Raffaele Marchetti and Cecilia Piccioni
5. Addressing indifference to the truth with Ian McCarthy and Gianni Riotta
6. Digital resilience with Cristina Alaimo and Agostino Santoni, with an introductory note by Giovanni Lo Storto BUSINESSES AND THE PANDEMIC EMERGENCY 7. Pandemics and Value Chains: what future for globalisation? with Silvia De Dominicis, Valentina Meliciani and Paola Severino
8. Sustainability during the pandemic with Frans Berkhout and Francesco Starace, with an introduction by Paola Severino
9. Industrial policies in the post-Covid era. The State’s role in the Economy with Paolo Boccardelli and Marco Simoni
10. The uniqueness of “Made in Italy” coolness with Michele Costabile and Diego Della Valle, with an introduction by Paola Severino
11. Post-Pandemic Implications for Retail with Matteo De Angelis and Sami Kahale
THE CHALLENGES OF THE POST-PANDEMIC FUTURE 12. Artificial humanism: beyond digital intelligence? with Giovanni Lo Storto and Jeffrey Schnapp
13. Emerging from the crisis with Open Innovation with Henry Chesbrough and Fabrizio Di Amato
14. Cities and communities in the post-pandemic era with Francesca Bria and Sheila Foster
15. After Covid-19 with Luigi Gubitosi and Helga Nowotny, with an introduction by Paola Severino
16. The new normal after Covid-19 with Aldo Bisio and Paola Severino Introduction
The course of history is sometimes marked by events which, by their scope and relevance, characterise a social context or even an era. Or at least that is what emerges from the reconstruction of historians. However, it is not always easy for those who experience such moments to be immediately aware of their significance. Yet, in the case of the Covid-19 pandemic, there seems to have been a general perception of the exceptional nature of what we are experiencing and the changes it will lead to.
However, while many have emphasised the uniqueness of the situation, it has been more difficult to assess (not to say predict) the socioeconomic consequences and transformations that will be necessary in the medium-long term. One wonder even if we will have to change our social dynamics once and for all, a subject which we had, perhaps, never considered before. An article that appeared in the New York Times, for example, questions the possibility that some distancing rules will be transformed from temporary countermeasures, dictated by a contingent necessity, to permanent habits that will become a part of our lifestyle. Will we stop greeting each other with a handshake, hug or kiss on the cheek? Will we hold fewer social gatherings, avoiding crowded places or limiting the number of people we invite into our homes for get-togethers or parties? Questions such as these are only seemingly trite; in reality, they give a clear idea of the change that could await us. We sense its extent, yet we struggle to understand it, due to the lack of previous experiences and the complexity of the context. In fact, we found ourselves facing a crisis that does not only affect health but social, economic and political spheres. However, these definitions are approximations and the very high number of which is an indication of how the problems deriving from the Covid-19 pandemic are transversal, multifaceted and largely unpredictable. To solve them, we need the ability to generate alternative interpretative hypotheses, namely to redefine the problems and reframe their contexts. In other words, we need to coordinate different disciplinary perspectives.
During the height of the lockdown, Luiss launched a series of virtual meetings in order to provide the conceptual tools suitable for interpreting this situation through “viable” ideas, that is to say, capable of having a tangible effect on reality. Thus, the Luiss.MasterClasses were born, dedicated to an in-depth exploration of pandemic-related issues. Internationally renowned experts presented comprehensive reflections based on their research and discussed the economic, social, political and legal implications with “guests of honour” from the industrial, professional and academic spheres. Ample space was dedicated to questions from the public, who were able to attend the meetings thanks to a live stream on our website and the University's social media channels.
It was an initiative that sought to fill the void in our lives that resulted from the lockdown when we were confined inside the home. Therefore, it was not necessarily a physical but, rather, an intellectual void, made up of those moments of reflection, uncertainty, doubt, but also creativity, hope and desire to restart: a void into which many were led by the forced interruption of the commitments and distractions that previously characterised our normality. When the health emergency is definitively resolved, and we have come out of this phase of containing infections, we will need to reflect on what the lockdown and the pandemic meant, on how they transformed our existence. What now seems evident to me is that the more we have been limited in our movements and the more our days have been marked by bulletins bearing the numbers of new positive cases, of cases of hospitalisation and, alas, deaths, the more we have felt the need for a conceptual investigation which would explore the moment we were experiencing to account for it and, thus, further motivate the various levels of sacrifice that were required of us. The Covid-19 pandemic has also been a lesson in humility. We have experienced our weakness and fragility in the face of phenomena of this kind and we have realised that our ability to understand events is sometimes limited. Human reason is weak when in the face of nature. The intellect that guides us is a faint and faltering light, like the flame of a candle. In An Essay Concerning Human Understanding (1690), English philosopher John Locke (1632-1704) describes the light of reason as follows:
How short soever their knowledge may come of an universal or perfect comprehension of whatsoever is, it yet secures their great concernments, that they [men] have light enough to lead them to the knowledge of their Maker […]. We shall not have much reason to complain of the narrowness of our minds, if we will but employ them about what may be of use to us; for of that they are very capable […]. It will be no excuse to an idle and untoward servant, who would not attend his business by candle light, to plead that he had not broad sunshine. The Candle that is set up in us shines bright enough for all our purposes. The discoveries we can make with this ought to satisfy us; and we shall then use our understandings right, when we entertain all objects in that way and proportion that they are suited to our faculties […] and not peremptorily or intemperately require demonstration, and demand certainty, where probability only is to be had […]. If we will disbelieve everything, because we cannot certainly know all things, we shall do muchwhat as wisely as he who would not use his legs, but sit still and perish, because he had no wings to fly.
However uncertain and fallible as it may be, the intellect remains an indispensable guide, especially in times of crisis. Therefore, the role of universities is to provide points of orientation, stimulate discussion, find interpretations and interpretative tools that can give rise to effective practices for management and professions, but also innovative policies for the economy and industry.
Covid-19 is changing how we view and live in the world, as well as value production chains, forms of transnational government, dynamics of conflict and common sense. After years of delegitimising knowledge, universities are now being asked to provide authority and the ability to inform decisions on the health management of the crisis, as well as produce socio-political analyses and offer answers to businesses to emerge from the crisis. In short, universities are the terrain on which we can tackle the challenges of the future. The test that Covid-19 has called us to face has meant that useful knowledge has had to come from universities to combat the pandemic, knowledge which, in a certain sense, is “pandemic”. However, these teachings can also become valid beyond current contingencies, in a broader perspective that gives meaning to reality with concrete answers, positively infecting the community: then it will be truly “pandemic” knowledge.
The Luiss.MasterClasses seek to provide interpretations of reality in a context of great uncertainty, and serve as a compass for public debate and rethinking the future. In order not to waste the wealth of this information capital, we decided to compile all of the meetings that took place between April and July 2020 in this volume. Each chapter presents the elements of the discussion and indicates the date on which the MasterClass was held, to better contextualise its content. We have tried to keep the written text as similar as possible to the spoken original: simplicity of expression and an informal tone are the editorial criteria that guided the work. The only real substantial intervention, which was necessary to ensure ease of reading, was to integrate the answers to public questions and requests within the text; these were collected during the MasterClasses in the social media comments and presented live to the speakers.
Andrea Prencipe Rome, November 2020 POLITICS AND SOCIETY IN THE FACE OF THE PANDEMIC 1. Global pandemics and future responsiveness of European health systems 28 may 2020 , *
Paola Severino
Until recently, the functioning of the healthcare system was a topic relegated only to those who dealt with it. Today, instead, health and the healthcare system lie at the very center of debate. We have seen the spirit of sacrifice with which the entire healthcare system reacted to the pandemic and how everyone mobilized with courage and effort, not to mention the intense work carried out by our system of pharmaceutical firms and companies. Nevertheless, many problems also emerged, including issues deriving from an expenditure policy that envisaged the closure of small hospitals without increasing the territorial healthcare system, the underdeveloped or haphazard digitalization of the system, the issues caused by student quotas which led to a shrinkage in the number of healthcare personnel and the predominance of the hospitals’ administrative-bureaucratic machines over the actual healthcare component. Throughout all of this, our pharmaceutical companies have always remained among the leaders, in Europe and arguably worldwide, for the quality of their products and research and for the breakthroughs that they manage to achieve. We need to consider whether these companies are in a position to compete fairly with pharmaceutical firms in other countries, considering the harmonization of the rules and regulations within which they operate. Unfair competition between countries is a well- known phenomenon. I believe that, from this perspective, Italy has been a victim rather than an initiator of illegal practices, due to the overbearing or decisive posturing of other countries in the creation of rules that are disadvantageous to us. I wonder if this emergency situation can finally serve to show case the merits of Italian pharmaceutics. In a number of hospitals, for example, several medicines used to treat other diseases were successfully tested against Covid.
Paola Mattei
Now that the acute phase of the first wave of the epidemic has passed, it is the right time to reflect on the future of the post-Covid world. The study of comparative health systems will be useful since it allows us to learn from the experiences of other countries that have been able to effectively manage the epidemic. I am thinking, for example, of Taiwan, South Korea, Singapore, but also China, and I would like to focus my attention on three themes and three policy lessons in order to open a discussion on how to improve the management of future health emergencies. The first policy lesson is the need for governments not to be caught unprepared by future health crises. They can prepare by fostering an adequate organisational anti-epidemic response capacity. In the political science literature on crisis management, crisis periods are divided into three phases: there is an initial phase of early warnings in which a quick system for detecting pandemic risks is essential; a second phase, the acute phase, in which the stability of the healthcare system is at stake and effective measures are needed to manage the crisis; the third phase, which we are now in, is the post- acute crisis. This third phase is very important because public policies are being redefined in entire sectors, not only in healthcare but also in education and jobs. Looking to the future, I think it is necessary to test the efficiency of the anti-epidemic organisational machine on a regular basis, through stress-test methodologies with the aim of evaluating the organisational strength of the healthcare system. Despite their importance and centrality, healthcare systems are rarely subjected to operational management stress tests. Britain provides us with a significant example: it carried out a national exercise against pandemics over three days in 2016, highlighting the shortage of respiratory ventilators even then. Nonetheless, from 2016 to today, successive British governments put this critical issue to one side, mainly due to spending policies. The second lesson concerns digitisation and the importance of artificial intelligence and robotics as a strategy for managing future pandemics. In this sense, I think Covid can be a turning point for technologies. What are the possible fields of application of artificial intelligence and robotics in managing Covid? In railway stations in China and Singapore, camera systems with thermal sensors are employed, allowing temperatures to be measured at a distance of five metres: infrared thermography technology which detects body temperature is a very useful diagnostic tool in areas where there are large flows of travellers, such as the underground or railway stations. Another interesting example is the use of humanoid robots to deliver medicines and meals to guests during hotel quarantine in China to avoid contagion between staff and doctors. There is also the so-called Spot robot, a social distancing robot deployed in public parks and large areas in Singapore to prevent gatherings. To reduce the impact of Covid, in addition to a higher level of governmental and technological preparedness, we naturally need to develop a vaccine that is safe, effective and accessible to all. A comprehensive approach to vaccine development and marketing is needed, based on common rules and collaboration between researchers, government drug regulatory agencies, financiers and pharmaceutical companies. According to data from the World Health Organisation updated as of yesterday, 27 May 2020, 115 vaccines against Coronavirus are being developed by university research centres, private companies and businesses around the world, based on different biotechnologies. The majority of these vaccines are in the preclinical development phase and in vitro analyses on animal models are still ongoing. It is very interesting to note that 76 percent of the scientific laboratories that are developing vaccines are private, while only 22 percent are public universities institutes. Of these 115 vaccines, only eight have been admitted to the second stage of development, namely clinical trials, with very rapid development times. The scientific community’s commitment has been extraordinary but scientific advances must obviously go hand in hand with those of vaccine production and distribution. It is important not to create unrealistic expectations, especially regarding timeframes and costs. Therefore, in the context of the public debate on vaccines, it would be useful to highlight that these are very expensive studies, consisting of technologies that cost hundreds of millions of euros. It is not clear who will finance the production costs, which will be very high. Can we expect pharmaceutical companies to produce the vaccine for free for everyone? I doubt it, and we cannot expect purely public funding either. Therefore, the public-private partnership is fundamental in the risk-sharing process. Pierluigi Antonelli
During this period, we have seen the death rate and epidemic spread vary greatly from country to country. On the one hand, looking at the number of deaths and the rate of infections, some systems, such as Great Britain, Spain and Italy, have clearly been hit substantially worse than others, such as France and Germany. The United States is a unique case, with a very different healthcare system from the European model. I subsequently checked the levels of investment in the healthcare sector in the various countries: considering public health expenditure as a percentage of GDP, Italy has the lowest level of economic resources invested together with Spain; Great Britain is a step above, while France and Germany are much better. In Italy, we have a significantly lower number of general practitioners than in Germany and France, and the lowest number of nurses together with Spain and Great Britain. In terms of economic impact, the worst GDP decline is expected since the Second World War, which should amount to around 3 percent on a global basis. During the pandemic, the critical issues were very similar from one country to another, especially between Italy, Spain and Great Britain, which all saw an excessive number of people seeking help from emergency departments in various hospitals. This also happened in Germany, where medical students were called into work in order to cope with the emergency. What are the main challenges to face now? The first is certainly to enhance the role of public health, reversing the current trend that has seen investments in healthcare decrease from 7.3 percent in 2010 to 6.5 percent in 2019. Then there is the issue of promoting science and its skills. Scientists must be offered a role in decision-making mechanisms and convey consistent messages. In recent months, the messages often changed according to who was speaking. Instead, it is necessary to consolidate a central structure, in this case, the Istituto Superiore di Sanità (National Institute of Health), and perhaps think about the creation of a national epidemic agency that can help the regions to manage and monitor these crises. It is also important to ensure stability of the supply chain of medicines and medical devices. During the crisis phase, we experienced the reality of competing internationally for the supply of essential products. Another issue concerns stress tests, which must be followed up with specific actions to improve coordination between countries and the exchange of data. The hospital system’s access and route management must be improved to avoid patients being referred to hospital. Primary care must be reinforced, as well as telemedicine. There are many challenges, including the way we deal with healthcare: whether we consider it to be an investment or a simple cost. I believe it is an investment. The pharmaceutical sector, as part of the healthcare sector, has done and continues to do its part by committing to supply medicines and medical devices. I believe that the pharmaceutical sector can give this country an important stimulus. The most far-sighted countries are those that seek to attract research-intensive sectors to their territory; out of these sectors, pharmaceutics are undoubtedly the leaders. Pharmaceutical is a leading sector in Italy: we are the top European producer of pharmaceutical products and, as such, specific policies should be activated to build further from this position of strength. These policies would create the ideal conditions for further investing in the country; in addition to leading the production of medicines, we could also achieve a leading position in research and development. In order to identify the most favourable policies, we should look at the policies already implemented by countries with a highly developed pharmaceutical sector, where typically the set of policies implemented favor the sector along the entire value chain (research & development, production, commercialization).
Paola Mattei
As regards the use of digitisation in crisis management, there is insufficient investment in digital healthcare in Italy. I would say that Europe as a whole does not invest in digitisation; therefore, the digitisation strategies we have seen in South Korea, Taiwan and Singapore are still impossible here. Europe has, however, decided to increase its investment in digitisation, including in the healthcare sector, so resources will probably grow.
Pierluigi Antonelli
In Italy, we have to overcome the fragmentation that causes decision making on healthcare to differ from region to region, with many systems that do not communicate with each other. This approach means that we lose unique opportunities, such as creating one single software to manage the healthcare system, facilitate the exchange of data and, in general, channel European funds towards a single goal.
Paola Severino
Design and programming now represent the fundamental elements for the success of initiatives aimed at improving our healthcare system. We must implement very concrete programming and planning, based on indications that do not have political origins but are dictated by competence. The contribution of digital technology can certainly help the pharmaceutical sector, as long as it is used with great caution since it involves sensitive data relating to health. The defence apparatus of sensitive data online must be strengthened; there are certain risks we cannot run in terms of protecting health- related data. Great concreteness is thus needed in addressing the issue of digital use in this matter. Pharmaceuticals is a self-made sector, which has always had to stand on its own two feet: in my opinion, this makes it stronger, just as companies that have not benefited from soft financing or other financial incentives are always stronger. The pharmaceutical sector is valued for its objective weight, for its ability to carry out research which, while costly, brings a reward that derives from the outcome of the research itself: therefore, it is a virtuous system from which we should draw inspiration for many other sectors. The pharmaceutical sector is an example of how research can be expensive but also profitable, and we need to ensure that it always meets these requirements. Competition will be fierce, sometimes even unfair, because there are many interests at stake in the search for a vaccine. Our goal must be to arrive at an appreciable result, not only in economic terms but also from a sustainability and social perspective.
Paola Mattei
In some countries, I am noticing a worrying nationalist, and I would add, protectionist wave. I am worried by discussions about exclusive use of the vaccine, not only for reasons of social equity but also because, from an industrial and economic point of view, it is dangerous to think that a single country can produce and distribute billions of vaccine doses.
Pierluigi Antonelli
It will not be possible for a single manufacturer to provide everyone with the vaccine. In fact, 115 vaccines are currently in development, even though few will prove to be effective and safe at the end of clinical development. I have many doubts that 12 or 18 months will be sufficient to develop a vaccine. Some time ago, I read a 2015 paper by some Dutch scholars that stated the average time for developing a vaccine is 10.7 years. In the case of a specific vaccine, the development time dropped to 5 years. Now, in 2020, we will certainly have made advances since 2015, but we must be sure that the vaccine is not only effective but also safe. We must also avoid creating false expectations because the vaccine not only needs to be developed but also produced in adequate quantities. To produce a vaccine, it is necessary to have a factory that is suitable for the production of vaccines. To build such a factory, if the existing capacity is not sufficient, hundreds of millions of euros must be invested and then all of the necessary certifications must be obtained from the regulatory authorities. Having said that, I am still convinced that the vaccine will be developed, and I hope it will be a team effort between several companies, without one country being privileged over others.
Paola Severino
We must project ourselves into a multidisciplinary dimension. We require multidisciplinary resources to programme and plan in case of unpredictable events or situations, such as those we have faced. It is impossible to do this alone, and opening a discussion with others is an extraordinarily effective method for enriching our knowledge. * Pierluigi Antonelli is the CEO of Angelini Pharma and has twenty years of experience in the pharmaceutical sector. He holds a degree in Economics from Luiss and an MBA from the Kellogg School of Management at Northwestern University. Paola Mattei è professoressa di Healthcare Policy alla Luiss e di Political Science all’Università degli Studi di Milano. Paola Severino is Vice President of Luiss, where she is Professor of Criminal Law and a former Rector. She was Minister of Justice during the Mario Monti government. 2. People, technologies and processes during the pandemic 16 june 2020 *
Terri Griffith
We can all change the way we work. This change might occur bottom-up and it may be useful to implement a conceptual framework that I call Thinking in 5T. As we all know, many of those who are lucky enough to have a job found themselves having to work from home. In Italy, 8 million people made this transition within a few days, not months or years as is usually the case. Inevitably, many found the transition abrupt and far from perfect: not everyone has a quiet setting and they often share their space with other family members or pets, not to mention catering to new demands, such as distance learning for their children. Therefore, Covid has made job crafting, the structuring of tasks, even more important than before. The available data show that, even before Covid, those who reinvented their work environment were able to improve their performance. Unfortunately, during the emergency, many of us simply tried to replicate what we did in the office at home, undoubtedly encountering a multitude of obstacles. This happened because we are humans, and humans do not always love change. We tend to cling to the past or settle for our first attempt or, perhaps, just incorporate small changes. However, I believe something more meaningful is required. Moreover, we are often inexperienced when it comes to changing the way we work. Work design is almost always structured top-down: a manager tells us what to do, and a colleague who carries out a similar job to ours gives us an example. All of this occurs without taking into consideration our talent, skills or even the tools we bring to work. Switching to bottom-up work design could prove very useful. The more we design our learning, the more we can acquire value. The organisation will also benefit, as overall employee performance will arguably improve. There are many things to consider: what technologies are used, what part of the work can be automated, what issues are important to employees and what concerns their superiors, what options have not yet been considered, what is the result that a particular team must achieve, etc. In order to reflect on all of these variables, I propose that we use a structure that I have dubbed the 5Ts: Target, Technology, Technique, Talent and Time. The Target is the goal, what we are trying to achieve; the term Technology refers to the tools at our disposal, which can range from artificial intelligence to a trowel; Technique refers to the methods we employ to use the Tool; Talent is what we are able to offer, our specific skills; Time is the context, the era we are living in, for example, the period of the Covid emergency. On a chart, we could plot these 5Ts as a star, as they are all flexibly interconnected. In my organisational design model, if you intend to change one of the elements, for example with a new recruitment or training system, you will need to make small adjustments to the others, in this case, by making changes to the incentive system. While, to avoid chaos, you don’t want to change everything all at once you do need to understand that to change one element should lead to slight modifications in others. The basic idea is that we are all called on to shape our work in a continuous system of comparisons and negotiations. The 5Ts strategy helps you to have these ideas clear at all times, in order to use them to your advantage.
Marco Morelli
At the beginning of the Covid emergency, no one knew how to manage their organisation very well, regardless of its size. We were faced with a vaguely defined image that we had to react to nonetheless, at the cost of breaking down barriers and standard corporate organisational structures. The first problem was management of internal communications; thousands and thousands of employees and colleagues were forced to use completely different tools at a moment’s notice. The second was management of the client base; in certain cases, one example being the company I managed until recently, it can include millions of clients who are used to interacting with the company in a certain way. Suddenly these clients could no longer enter a branch, and they were obliged to redefine their relationship with us. The management team had to develop a new marketing and sales system. As Terri Griffith stated, it was a matter of time and technology, but above all communication, to convey a unique message to such a variety of people. Whatever their place in the corporate organisational chart, from the CEO to the new employee, everyone had to change the way they communicate, interacting with a much greater number of people. CEOs were used to talking to 20 or 30 people at most, but these days they have come to connect with thousands of people. Managers have had to redefine their concept of sustainability, going beyond what is defined by the acronym ESG (Environmental, social and governance criteria). There could be nothing but “human capital” at the basis of everything, from colleagues to other employees, up to old and new clients. In spite of forced remote interaction, I am sincerely convinced of the importance of the human side of working relationships, and the fact that these are destined to return to the fore with even greater strength.
Terri Griffith
The era of Covid is forcing us to accelerate the digitisation process. As Marco Morelli pointed out, many had to learn to use new platforms and tools. Once you have acquired certain skills, it would be absurd to lose them.
Marco Morelli
If even as recently as January 2020 someone had asked the CEO of an important bank like Monte dei Paschi: “Do you think it is possible to transfer 85 percent of your 65,000 employees to working remotely in just eight weeks?” the answer would have been: “Not even in three years”. Due to the pandemic, there were actually a few days in April 2020 when 85 percent of our employees worked from home, serving millions of customers. It confirms the fact that being forced to do something pushes you to adapt.
Terri Griffith
Human beings are creatures of habit; however, enough time has passed for some things that we consider innovative and unusual to become part of our routine. It is unlikely we will be willing to revert to the past. While some cannot keep up with the changes and some would prefer everything to return to the way it was be- fore, others have found new ways to do their job, perhaps in a simpler way.
Marco Morelli
We will not go back to square one in terms of business organisation management. We will never start where we left off in 2019 yet there will naturally be a mediation between that which was and that which the pandemic forced us to implement. Some jobs can be carried out 100 percent remotely, while others require human contact. One way to exercise leadership is to lead by example, and to do so, you also need to look people in the eye, not through a computer screen. It is the managers who will have to lead the change.
Terri Griffith
We must also consider the fundamental problem of trust. “Trust” is not the sixth T to add to my 5Ts model, but one of the connections in the star diagram. It is about negotiating, making decisions by comparing our experiences. Let us consider the example of a company that refused a partial return to office work; it did not want to create an imbalance between employees by giving the privilege of human contact to only a select few. New recruits in a company create a twofold problem; as new- comers, they do not know the organisation and have no power. Therefore, companies must learn to share experts’ skills with the fresh workforce. As I have already stated, performance improves when you adapt the structure to the employees’ skills.
Marco Morelli
Even medium-sized organisations face a similar problem, especially in this time of emergency. How can they recruit new staff while they are unable to access their offices and interview candidates face to face? And so, what means should they use for the recruiting process? HR professionals need to innovate further by finding a way to understand the tangible merits of a candidate without being able to test them in a teamwork situation. Nobody knows the right system needed to achieve this. I believe we will be able to find out by testing the various possible systems in the field, also focusing on the candidates’ feedback regarding the selection methodologies used.
Terri Griffith
Of course, the feedback from new recruits will be decisive, as they will find themselves in an unprecedented position. We need to understand the kind of experiences that people go through in similar recruitment processes. In addition to the work sphere, teaching is also changing. 20- 30 years ago, companies took on more responsibility to help schools. The Covid situation pushes us to understand what ab- solutely needs face-to-face interaction and what we can do remotely.
Marco Morelli
We cannot yet know for sure how the boundaries between online and offline will be redefined in the future. Yet, this period has undoubtedly allowed us to recognise people who were perhaps hidden in an office and did not contribute to the growth of the organisation. For example, we [at Monte dei Paschi] had a chatbot in which every single employee could share their daily experience. Therefore, anyone, regardless of their role, seniority or location, could understand the experience of an employee working in a small Sicilian branch and dealing with a specific customer. This is the type of innovation that we do not want to relinquish.
Terri Griffith
Social media have become even more important in this situation because everyone, in any part of the world, needed answers. From an academic or managerial perspective, I argue that you have to go to where your audience is. If your audience stretches bey- ond those who use the company’s internal communication tools, you have to look for it elsewhere. Consequently, we have seen some organisations behave extraordinarily, sharing their skills for free with the whole world, and not just with their employees. I, myself, have done my best to speak to a wider audience. Those who already had experience working remotely did well to make themselves available to others; they gained in terms of reputation, among other things.
Marco Morelli
Companies run the risk of communicating in a non-factual way through social media, whereas, it is important that they favour accuracy, using their expertise as the basis of their dialogue with the public. Public opinion will only be able to really discuss how an organisation deals with a given issue by starting with the facts.
Terri Griffith
The problem of technostress also arises. For many people, the problem is that they cannot stop working. Therefore, we should learn to structure our days, just as we structure those of our chil- dren. There are many possible goals, such as safety or produc- tivity. Once you establish the Target, you need to consider the Technology and Techniques available, and the Talent we have at our disposal to leverage them. Do I work better in the morning or the evening? How can I combine my preferences with the group’s needs? How would I like to structure my day? There comes a time when we have to say “I am offline now”, or “it is family time”. We must try to regain control, or at least negotiate it with our employer.
Marco Morelli It is up to us to decide how much time we dedicate to social media, what percentage of the day to remain connected and how quickly to respond on WhatsApp. That being said, a CEO may even be forced into giving 24/7 availability. Perhaps the most important thing I learned during the emergency was how to make the best use of my time. * Terri Griffith is the Keith Beedie Chair in Innovation and Entrepreneurship at Simon Fraser University – Beedie School of Business. She holds a PhD from Carnegie Mellon University, has experience in management roles and provides consultancy to business and government organisations. Marco Morelli is an Italian business executive active in the field of finance and the third sector. From 2016 to 2020, he held the position of CEO of Monte dei Paschi di Siena and is now Executive Chairman of Axa Investment Managers. He teaches Economic & Finance and Business Management at Luiss. 3. Pandemics and Data Science 12 may 2020 *
Giuseppe Italiano
The The expression “data science” dates back to 1974. It was coined by Peter Naur, a Danish computer scientist who would go on to win the Turing Award, a sort of Nobel Prize in computer science. Data science means a set of methods and techniques used to interpret data, generally examined in vast volumes (big data). It is a very important discipline today, so much so that Harvard Business Review identified the data scientist as the sexiest job of the 21st century. Data scientists work with data, cleaning them, since we often have “dirty” data available, and analysing them using specific algorithms to discover any insights. They then present the results of their analyses in a format that ensures they can be useful for strategic decision-makers. Obviously, data alone are not enough: we need algorithms and models that can help us better understand what is happening. To understand the importance of data and algorithms, we only have to note that the current top seven companies in the world by market capitalisation are all digital: Microsoft, Apple, Amazon, Alphabet (parent company of Google), Alibaba, Facebook and Tencent. We are also seeing the importance of data during this pandemic. The lockdown we are currently experiencing has led to a huge leap forward in the process of digitising our society, also involving more resistant sectors, such as public administration and healthcare. During this challenging period, data can be useful for understanding the pandemic, fighting it and helping companies restart. The nightly 18:00 television report followed by very many people has helped us to understand how important data are. How important it is to use data for a prescriptive approach, for understanding what is happening today; and how important it is to use data for a predictive approach, for understanding what could happen tomorrow and how we can act accordingly. All of us have also understood how important the reliability of data is. For instance, 200 deaths were not counted at a certain point; how is that possible? We realised that some municipalities still transmit data in paper form. In my humble opinion, a society still based on paper, such as the various self- certification forms that we have seen, now runs the risk of being completely anachronistic. Countries that have used data and a scientific approach have responded better to the pandemic. Let us consider, for example, Hong Kong, Taiwan and South Korea. They implemented the three T’s paradigm: test, trace and treat. Testing people to understand who is positive, even if asymptomatic; contact tracing to stop possible outbreaks of contagion; and, finally, treating those who have been infected. Data play a key role in each of these three phases. As for the recovery, we must first of all decide what kind of economy and society we want to relaunch. It will undoubtedly be necessary to innovate, making the adoption of digital technologies even faster.
Luca Tomassini
The digital acceleration that the Italian professor speaks of has been possible thanks to the presence of digital infrastructures. The internet sustainability model is based on data, which can track everything we do. As a result of machine learning, algorithms are also capable of processing predictive analyses. Many people question the internet sustainability model, given that the services offered seem to be free. What is the “cost” of Google, Facebook or WhatsApp? We pay with our information; this can be valorised, filtered and used, employing it, for example, for machine learning. Since March 2020, we have been committed in Italy to developing a system for monitoring pandemic data, through a mobile application that is capable of communicating with other smartphones via Bluetooth: a system capable of tracking digital IDs without violating privacy. A smartphone can be made to identify another digital ID that is within a proximity of less than one metre, and vice versa, through a simple application that operates in the background, without any impact on the functioning of the device. Data from the various smartphones are then sent to a system that cross-references all the digital IDs and plots them on a virtual map that is able to indicate who has met with whom (always guaranteeing anonymity). Naturally, since this is a pandemic, it is crucial not to use the commercial cloud infrastructure but rather State-managed services. When a citizen goes to Accident and Emergency and is found to have Covid-19, healthcare workers are able to reconstruct which digital IDs he or she has encountered over the last few days. This model is taken from the Asian examples where the concept of privacy is very different; in Europe, the GDPR is committed to guaranteeing strictest respect for the privacy of all its citizens. Although the Italian government did not entrust our group with the creation of Immuni, our research was nevertheless useful. We developed the solution for the business world, launching a wearable device called the Pj20 tracer. It is a wearable device which can be attached to a jacket or used as a badge; it records any IDs that come into its vicinity. These kinds of applications have made it possible to work in areas that require the simultaneous presence of several employees, such as the construction sector. By equipping each person who works on a construction site with this badge, it has been possible to continue works that would otherwise have been forced to stop.
Giuseppe Italiano
Data interoperability is required in order for everything to work. For example, some regions use different information systems which are unable to communicate with each other and represent data differently. There is a lack of coordination and the consequences are serious, including in terms of human lives. Data do not suffice: they must also be accessible, clean and usable, and perhaps even open, so that everyone can work.
Luca Tomassini
The issue of data transparency is fundamental. Data managed by the big players possess great value: although they interfere with the privacy of ordinary citizens, making them public would mean bringing down a system which, as already mentioned, is based on their valorisation. Shoshana Zuboff’s wonderful book The Age of Surveillance Capitalism opens our eyes to how this model has become a system for controlling us and providing us with information according to our forms of behaviour. While its advertising use – to tell us to go on vacation to the Maldives and not to the mountains – may appear innocuous, in other fields, however, its raises issues of ethics and transparency.
Giuseppe Italiano
The problem of contact tracing emerged strongly during the pandemic. We should also be aware that we are also being tracked during our everyday online activities. There is a wonderful book entitled Everybody Lies by Seth Stephens-Davidowitz, which I think illustrates a key aspect: when someone asks me a question, I do not necessarily answer sincerely; I often say what I consider to be socially acceptable rather than that what I really think. However, my true self emerges in my online activity when I search on Google and browse the Internet. This is why it is so important for companies to know it: they can learn what people really think. Thus, surveillance is also implemented at times when there is no emergency, even when apps are not installed on phones. Anyone wanting to read all the permissions they have granted to the apps downloaded on their phone would realise that these are often excessive; for example, also allowing access to one’s photos to apps that are in no way needed for it to function.
Luca Tomassini
We very rarely read the terms and conditions of use when we install an application on our smartphone or tablet. An experiment was carried out in London: free high-speed WiFi access not requiring a password was offered in a city square; however, one of the conditions that users had to accept was to give up their pet or one of their children. Nearly 98 percent of people accepted these terms without reading them. This gives us an indication of the discrepancy between our current concerns over privacy and our daily behaviour. We give out our email address and our location when we order pizza at home; the same thing happens when we use Uber or post a link on a social network. Undoubtedly, we have very little awareness of how we use the net. In the case of Covid-19, we will have to use the control app to counter the spread of the virus without being excessively concerned about privacy.
Giuseppe Italiano
The issue of privacy is very important. Many would be willing to use this app if provided with certain guarantees. Luca Tomassini spoke earlier about the GDPR, Europe’s General Data Protection Regulation. The GDPR also envisages that there be exceptions during particular emergencies and that the consequent processing and storage of data expire once the emergency is over. In very serious cases, the judiciary can ask for access to a person’s phone data to understand, for example, if they have taken part in a terrorist attack. However, it must comply with some measures on how it processes and stores these data. A similar situation is already well regulated and could be simply extended to the current pandemic situation. People’s data (especially health data) have a very important economic value on the market due to their potential – not always lawful – uses. Today the protection of health comes into balance with personal freedoms. Right now the balance seems to be leaning in favour of the former, so much so that nowadays we cannot even leave the house. Perhaps we have finally discovered the importance of digital infrastructures!
Luca Tomassini
The management of citizens’ data should be reserved exclusively for the State, which must act as guarantor. I am in favour of a centralised model, whereby the civil registry, health, justice and education databases can be interconnected. Such a system has incredible potential, capable of enhancing our life and our society. Digital data management will also be much cheaper than paper management, but we obviously have to be very careful given the potential of such data collection. * Giuseppe Francesco Italiano is Professor of Computer Science at Luiss. He holds a PhD in Computer Science from Columbia University. He is the author of over 250 publications and has provided IT consultancy for large international companies in Italy and the United States (AT&T, IBM, Lucent Bell Labs and Microsoft). Luca Tomassini is an Italian entrepreneur and academic, Knight of Labour and Grand Officer of the Order of Merit of the Italian Republic. He is Adjunct Professor at the Luiss Business School and Professor in Digital New Media and Telecommunications at the University of Viterbo. He is the founder, Chairman and CEO of Vetrya. 4. International politics during and after the pandemic 5 may 2020 *
Raffaele Marchetti
Covid-19 is changing our society from a health, economic and social perspective. As far as the international political dimension is concerned, Covid is accelerating dynamics that already existed before the crisis. Will we see an overall deterioration, or could the situation also represent an opportunity? There are both light and shade, let us try to analyse them. From the post-war period onwards, the international system has been subject to crisis every ten years or so. There was the bankruptcy of Lehman Brothers in 2008, the 9/11 attacks in 2001, preceded by the collapse of the Berlin Wall in 1989, as well as the second oil crisis and the Iranian revolution in 1979. Economic crises, in particular, have always had a considerable impact on the international political order. In today’s world, two dynamics intertwine. On the one hand, the G- 0 dynamics which encompass globalisation, transnational phenomena, the virus and the mobility of people, goods and technology (including vaccines), and on the other hand, the G-2 dynamics of national policies. Let us consider the tension between the United States and China, or between the European Union and Russia. The point of intersection between these two dynamics forms a central question in order to understand international politics and the post-Covid world to come. Is the crisis accelerating the end of globalisation? Resolving the crisis would require international coordination; some might even say we need a world government. Yet each country goes its own way, pursuing a process of deglobalisation that has been underway for several years. The idea of globalisation for the benefit of all has reigned from the 1990s onwards. It seems, however, that we are now slowly moving away from this idea. Global value chains are expected to decline to mitigate national vulnerability. Indeed, the risk factor has increased, not only due to Covid but as a result of increased international competition. Therefore, we expect to see a more “state- centric” and nationalist world, with countries that make the transition from regulators to planners, investing and becoming indebted. We also expect that companies will be called upon to show their increasingly patriotic spirit and seek local suppliers. Perhaps the world will not be as free, prosperous and open as we have become accustomed to in the past few decades. It is also likely that resistance to large migratory flows will increase. Let us not harbour any illusions that this crisis will automatically foster increased international cooperation and stronger international institutions. As history teaches us, new international institutions are only created post-crisis in the presence of an undisputed leader; a winner destined for hegemony. However, this is not the situation that seems to be looming on the horizon today. Instead, we see competition between two major players, China and the United States. In consideration of this rivalry, we can expect a less US- centric and more Sino-centric globalisation, since the latter needs globalisation more than the United States. The world is repolarising: the United States realised that globalisation was bringing greater benefits to China and, consequently, reversed the trend. In this regard, there will presumably be a strong current of continuity between Obama’s second term, Trump’s current presidency, and the next presidency. Economic policy will generally slow down and return to regionalisation, at least for the next six months, with a strong impact on both China and the United States. The Chinese economy could be hit hard by an integrated global economic crisis, which would impact its internal stability. Much will depend on how well the Chinese market is able to readjust and transform the country’s economy, redirecting it from exports towards domestic consumption. The pandemic is an exercise in public diplomacy, and it will be crucial to see who manages to come out as a winner. The result is not yet clear from the perspective of political communication. If China prevails, it would be a huge failure for the United States; the Chinese model of an authoritarian state exercising control through technology could project its soft power with even greater intensity, positioning itself as a socio-economic model. Conversely, if China comes out badly, it will lose credibility, compromising many of its economic drivers. The vaccine will undoubtedly be an important factor: the first to develop a vaccine, use it and distribute it to their allies will, therefore, be the first to revive their economy quickly and effectively. It is essential not to forget about Africa in this scenario. The Covid crisis could have a very serious impact on the African continent. Tourism has stopped, investors are fleeing, the healthcare system is in crisis, and governance at an international level is already discussing a debt moratorium for the African countries in greatest difficulty. A less integrated and more regionalised world risks once again making Africa the abandoned continent it was in the 1980s, with very serious consequences in terms of economic growth, internal stability and emigration. Now let us consider the European Union and Italy; their internal dynamics must interface with global dynamics. Referring to the thesis by the famous scholar, Graham Allison, in The New Spheres of Influence – Sharing the Globe With Other Great Powers (Foreign Policy, March/April 2020), he argued that the world is moving towards the creation of new spheres of compartmentalised influences, and each country will have to decide which side to stand on. From a European or Italian perspective, it is not a question of positioning oneself in a simplistic pro-US or pro-China way, but of seeking compatibility between these poles of attraction. Aligning with a position of growing competitive tension could generate incompatibilities and lead to very bleak scenarios. We must not be completely pessimistic, however, as this crisis forces us to pay greater attention to the resilience of societies. We are witnessing the extent of our societies’ vulnerability from a healthcare and economic point of view, as well as a socio-political perspective in general. I hope that we will learn to implement policies that are designed to make us stronger, integrating economy and security, and paying more attention to international challenges.
Cecilia Piccioni
In line with what Professor Marchetti has already illustrated, the crisis has accelerated dynamics that were already part of our world. At the level of global governance, the crisis has highlighted the need to redefine the methods and tools of globalisation, emphasising the east-shifting trend of the power equilibrium. China has managed to transform a liability, such as its opaque management of the pandemic in the early stages, into an asset, positioning itself as a champion of solidarity and efficiency on a global level. It has thus shown its wish to continue to compete with the United States for the dominance of global governance. But what is happening instead in Europe and Italy? Covid is intensifying the European Union’s identity crisis, which has made it increasingly resemble to a kind of “Middle Earth” for quite some time now. It is crucial for Brussels to actively fight for a leading role in the post-Covid world. The US administration is exerting strong pressure to have the European countries at its side in a confrontation with Beijing. The EU will increasingly come under this kind of pressure from these two global players. Italy is clearly among the most exposed countries. The upcoming presidential elections in the United States, while not inciting epochal upheaval, could mark a change; a presidency that is closely aligned with the European Union’s values would allow Brussels the time it needs to develop its geopolitical defence and strategy. Paradoxically, Covid may represent an opportunity for the EU. The opportunity to rethink the very concept of sovereignty by understanding that integration between countries can support and not threaten national sovereignty, in a time of growing protectionist tensions. This would also lead to a balanced and pragmatic approach to the dilemma: should we protect European citizens at the expense of European consumers? A welcome redefinition of globalisation could create shorter supply chains and spark a return to localisation, to better protect Europe’s citizens but at the detriment of their consumption. Such measures would lead to greater losses and less efficiency. This twofold need for protection should be integrated with the European project. The EU should be able to take advantage of the crisis to develop a vision of European sovereignty which, by reducing the need for autocracy, creates channels that allow national governments to make fundamental decisions independently and to negotiate more effectively within broader frameworks. The right balance should be struck between the advantages of open markets and interdependence, between sovereignty and security. This can occur in three sectors. The first is that of supply chains, which must become more efficient and diversified. It is unrealistic to expect that small member states could become self-sufficient; however, the EU could equip itself with storage hubs for key resources to be made available to all of the single market member states. It would thus be able to protect its smallest and most vulnerable member countries from the risks that are intrinsic to globalisation. Democratic principles are another sector in which the EU could ensure important developments. It is important to be able to protect these principles even in states of emergency. This could happen by adopting a legal framework with guarantees, using the data collected for the fight against Covid and other emergency purposes in a timely and coordinated manner, and developing new standards to regulate the use and duration of emergency powers adopted by member states. The gap between national sovereignty and multilateralism is the third sector in which Brussels should take a necessary step forward. Europe can propose its own path of multilateralism that has nothing to do with Trumpian, Chinese and ex-Soviet models. What is needed is a coalition of all the countries that share the same vision, reflect fundamental values and interests, and find their nadir in the “West”. Sectors for potential action include climate change, migration and global public health protection. Overall, the Covid crisis could allow Brussels to relaunch the European project, reconciling nation-states and interdependence. In this context, Italy will have to identify and defend its national interests. If there is a country in which the Sino-US dialectic can find fertile ground, it is ours. Rome is of particular importance to Beijing, if only because Italy was the only member of the G-7 to sign the memorandum of understanding on the Silk Road. The Chinese diplomatic offensive of providing masks and other aids presented as donations should be read in this context, even if they were mostly commercial transactions. Due to its strong geopolitical connotation, this action provoked Washington’s immediate reaction, with the promise of a 100 million US dollar aid package mentioned by both the President and the Secretary of State. There no longer seems to be a model of an international community governed by a group, such as a G-7 or a G-20. Instead, we live in a G-0 world, in which no nation is an absolute leader. To navigate the open sea, Italy must equip itself with an efficient decision-making system, which would lead it to assume firsthand its responsibilities and avoid relying exclusively on multilateral bodies that are currently lagging behind. To do this, it is necessary to raise the level of participation of national public opinion, which cannot come into play only as a machine of consent and votes, but should contribute to decision-making processes in an informed way, making its representatives responsible and possibly penalising them during elections. It is necessary to select partners that share our values and our long-term goals, which is why public support is essential. In post-Covid Italy, we must also maintain links with our traditional alliances. Our national interest lies in Europe. But that does not mean sacrificing making our voices heard in other spheres and looking for other types of privileged relationships. It will be possible to identify concrete interests that are common to several states through a bottom-up approach, without necessarily being limited to countries in Europe. Therefore, we will be able to collectively and synergistically address global problems, such as cybersecurity and climate change.
Raffaele Marchetti
What role can Russia play on an international level? It is certainly a major player from a security perspective, but this does not extend to economy. Consequently, it will have a similar weight to that of the European Union. Thus, we find two strong players on the world stage, the United States and China, as well as two weaker ones, Russia and the European Union. If three join forces, the fourth will be further weakened. For this reason, Russia will still play an important role, even though it is no longer the global power of the Cold War era. Russia will be able to help determine the balance of power at an international level, approaching one or other coalition bloc. It will be up to the US and China to put the right incentives on the table to attract Russia to their side. After all, this was the strategy used in reverse by the US to distance China from the USSR and thereby weaken the Soviet rival.
Cecilia Piccioni As for Europe, I think it is necessary to involve individual citizens more, given that the current degree of trust in the European project has certainly decreased compared to the past. I refer to a recent speech by Joseph Borrell, who wished to raise the awareness of the average citizen, to relaunch the European project and the idea of global governance. For the European Union it is fundamental that a national public opinion helps its representatives make the right decisions. Fincantieri is a unique case in our national landscape as the company relies on a global supply chain that guarantees employment and livelihood for a large number of families. With regard to Fincantieri’s experience in managing the pandemic, it was an exercise conducted pragmatically and unanimously, which made it possible to establish what is now called the “Fincantieri model”. Fincantieri imports skilled and high-level labour, not only bringing in specialised workers from Vietnam, for example, but also engineers. For this reason, it has not been particularly affected by the collapse of the global value chain since, as a labour-intensive manufacturer, it is guided by the ethical imperative to protect its partners which are small and medium-sized enterprises. As an example of the relationship and the solid bond of interdependence, for every euro that Fincantieri bills, the supply chain bills four. This crisis is also creating an opportunity for the Fincantieri group; we also see it in the strong strategic and geopolitical value for the field of ship construction. For example, we can offer a means of patrolling and monitoring in the South China Sea. Fincantieri is a global and flexible company, always ready to handle emergencies. On 28 April, at the height of the emergency, we concluded the project for the bridge over the Polcevera river. Therefore, Fincantieri does not only make ships for civil or military use but as a multidimensional company it can contribute to the all- encompassing growth and well-being of the country.
Raffaele Marchetti Returning to the international scenario, transatlantists accuse Italy of being the European country that is most open to China and Russia. However, if we look at the facts, Germany is the European country that has the highest degree of interdependence with China in economic terms, as well as being the most integrated with Russia. This moment of economic difficulty creates strong political divisions between countries. There are also strong populist and anti- establishment movements within each country that limit the possibilities for governments to act. We have to think about the European Union and its member countries in a different scenario. We are used to thinking about it in a context of growth, where things are going fairly well; however, nowadays, intra-European competition prevents the formation of subjects that are capable of competing at an international level. In this way, the most promising European companies are often sidelined and deprived of the ability to truly compete with American and Chinese companies. To halt the decline, we need to rethink our institutional-regulatory structure at a national and Europe-wide level.
Cecilia Piccioni
Professor Marchetti refers to the attempted merger between Fincantieri and Chantiers de l’Atlantique, a large French company in the shipbuilding sector. The merger is currently being studied by the European Commission and risks breaking on the rocks of a certain rigorism. We need European regulatory instruments that serve to not only protect the market and its competitiveness, but also to safeguard the European industry. * Raffaele Marchetti is Professor of International Relations at Luiss and the Rector’s Delegate for Internationalisation. He holds a PhD from the London School of Economics and has served as an external consultant for the European Commission and other public and private institutions. Cecilia Piccioni is Senior Advisor to the Chairman of Fincantieri. With a long diplomatic career behind her, she was the Italian Ambassador to Vietnam from 2015 to 2018. 5. Addressing indifference to the truth 19 may 2020 *
Ian McCarthy
Indifference to the truth includes things like bad information, misinformation, lies, fake news and deep fakes, as well as the concepts of a post-truth and post-fact world. Some of these terms are new, given that social media have changed our relationship with information in recent years. I would like to begin with a keyword: bullshit. I’m not using it to provoke anyone or to be vulgar. It is an extremely precise and very important conceptual form of misrepresenting reality. If we want to understand how the system produces and spreads indifference towards the truth, we must refer to this expression. What is bullshit? I recently contributed to an essay that garnered a lot of attention on social media: “Confronting indifference toward truth: Dealing with workplace bullshit” (with David Hannah, Leyland F. Pitta and Jane M. McCarthy). As a reference point, we used the fundamental book entitled On Bullshit by Harry Frankfurt, a professor of philosophy at Princeton University. Frankfurt clearly distinguishes bullshit and other misleading information, such as lies. A liar knows what the truth is and somehow tries to subvert it. A liar is aware of facts or reality; otherwise, they could not lie. Those who bullshit do not care about the truth and are not bound by it. They just invent things, and sometimes they even get it right. Yet, whoever bullshits claims the complete freedom to say whatever he or she wants, whether their purpose is personal, political or anything else. Here are some examples. Let us imagine an organisation on the verge of a major strategic change, such as a merger or change of ownership. During a presentation, the leader, pressured by employees who fear job cuts, announces that no one will be fired. The leader is lying if he knows that decisions have already been made and that there will be layoffs. He knows the truth and is hiding or manipulating it. However, if the leader does not know whether or not there will be layoffs because it has not been discussed yet, he is spouting bullshit when he says no one should expect job cuts. He does it to avoid sounding negative, to evade giving bad news, or for any other kind of personal advantage. But it might also be true that, in fact, there will be no layoffs. Consider a very famous real-life example: in 2018, during the negotiations for the NAFTA (North American Free Trade Agreement) between Canada, the USA and Mexico, the President of the United States told the Canadian Prime Minister that the US had a trade deficit with Canada. The Canadian Prime Minister replied that it was not true, but the American President insisted: it’s true, very true. Only a few days later, at a charity event, the President of the United States admitted that he did not know whether or not there was a deficit, as he was not aware of the figures. He just wanted to contradict whatever the Canadian Prime Minister said. Having no idea of what was real, he could have been stating the truth. Leaders who bullshit are not limited by the truth and are free to state whatever they want. This is why what they might say or do not say becomes more dangerous. How can we counter bullshit in the workplace and, more generally, in society or the media? Why do people bullshit? And when? John Petrocelli dealt with the subject in his essay Antecedents of bullshitting. In a workplace, you are not expected to say “I don’t know”. You are expected to go to meetings, do your job and have an opinion on things. Many are afraid to say “I don’t know, I don’t understand, I’m not sure”, and they react by saying anything with verve and conviction, usually bullshitting. They know that they will generally get by without being punished or blamed; the more they perceive that the people they are addressing know nothing about the subject, the more they will feel free to bullshit. Petrocelli carried out a series of experiments to understand when people are most inclined to similar attitudes. Gordon Pennycook, James Allan Cheyne, Nathaniel Barr, Derek J. Koehler and Jonathan A. Fugelsang, authors of “On the reception and detection of pseudo-profound bullshit”, found that it all depends on one’s mentality. Those who are open-minded, but not particularly critical, and are not equipped with strong cognitive tools, are more likely to believe in this type of communication. On the other hand, those with a very analytical mentality and a sceptical attitude will tend to be bothered, or at least to identify what sort of statements are being said. Last year, another study examined forty thousand teenagers in English-speaking countries around the world, presenting them with completely made-up mathematical operations. The boys and girls were asked how skilled they were at maths and how they would solve the operations. Subjects with a more stable socioeconomic background were found to be more prone to bullshitting, claiming they could solve those problems. Boys did it more than girls, and confident people more than shy ones. In North America, and particularly in Canada, this attitude is more common than in England, New Zealand and Australia, and much more so than in Ireland, Northern Ireland and Scotland. Therefore, the ability to spread or tolerate this type of disinformation has a cultural aspect. Building on this kind of research, I sought to talk with my colleagues about how employees and staff of an organisation should understand, recognise, combat and prevent bullshit. It is a four-step structure. Firstly, we must understand that bullshit is a particular form of representing reality that differs from a lie, often expressed in a benevolent and credible way. Secondly, bullshit can be recognised by its abstract nature, based on obscure sources, and expressed with a logic full of acronyms and technicalities. Thirdly, we must learn to interact with those who express bullshit. The possible reaction strategies are exit, voice and loyalty (defined by Hirschman in the homonymous volume). Exit means reacting by refusing to tolerate bullshit any further and leaving the company. Voice means exposing the bullshit. Loyalty means staying true to the leader or his/her bullshit because it seems interesting or it suits us. The fourth step is prevention: building a culture where competence is worth more than opinions and feelings, and the excessive use of technicalities and fraudulent statistics is prohibited. It can be summed up in five “do not’s”. Do not confuse bullshit with lies and other forms of representing reality; do not forget that bullshit can often be fascinating and turn out to be true; do not forget that, consciously or otherwise, people often use bullshit to express themselves; do not read and listen with an uncritical attitude; do not be afraid to say I do not know or I do not understand. In contrast, there are five “do’s”. Require that logic be used; reject simple and manipulative anecdotes; pay attention to any inconsistencies; bestow your trust according to the evidence provided and the veracity of what has been said; try to understand how you and your colleagues react to a similar form of communication and what its effects are at work, in the community and in society.
Gianni Riotta I worked on the concept of truth in formalised languages for five years while I was still a student; it is an arcane subject that deals with truth in mathematics and formal logic. When I realised I was not intelligent enough to be a philosopher, I decided to be a journalist. For a long time, I thought that I had wasted five years of my life. However, in this time of great disinformation campaigns, I realised that such abstract studies are useful in the 21st century. At the time of my youthful endeavours, the post-modern school of thought was in vogue and was still widespread on American campuses, according to which there is no truth. As Jacques Derrida taught us, the front page of the New York Times and a novel like Tolstoy’s War and Peace are both narratives. Post-modernists believe that truth is only a narrative which, temporarily, finds general consensus. This vision did not convince me at the time and still does not persuade me. Instead, I refer to Aristotle’s classic concept of truth in Metaphysics: he maintains that “To say of what is that it is, and of what is not that it is not, is True, while to say of what is that it is not, or of what is not that it is, is False”. It is a formidable principle that solves all issues of disinformation. The only problem is that, however well it works in Aristotle’s Metaphysics, the principle no longer functions once on the web, since it seems impossible to agree on what is and what is not reality. MIT in Boston has just released a study carried out on a huge scale which demonstrates that disinformation travels online much faster than quality information. Many of my friends and colleagues are trying to respond to disinformation with debunking: if you state A, and A is false, I can prove that you are lying by saying B. The reason they are not succeeding – just like the European Union and the European Commission’s efforts, which are investing heavily in debunking, seemingly in vain – is that people want to believe in disinformation. They prefer to believe in a conspiracy about Soros rather than in the genuine investments made by France and Germany for European aid in Italy. This is what we will have to explore in the future: understanding why people prefer disinformation to information.
Ian McCarthy If I am asked to identify the cause of the spread of disinformation during the Covid emergency, to avoid contradicting what I already stated, I should not answer. The fact is that I do not have sufficient evidence and I can only put forward hypotheses. I am under the impression that the countries which are best able to respond to the emergency are the ones that rely most heavily on evidence and science, states where experts take part in decision-making processes. It appears that female-led governments, such as those in New Zealand and Greece, responded better than others, confirming the study that I cited earlier in which teenagers were less prone to a certain type of communication than self-confident and socially- motivated teenagers. Naturally, I can only offer speculations at the present time. Gianni referred to the fact that a certain way of presenting ourselves can be more seductive than others. Reporting unpleasant truths has consequences. As individuals and as a society, we must be able to recognise the nuances and be constructively sceptical. Sometimes it is difficult to relate to people from the academic field because they are sceptical and immediately require sound evidence in an argument. Society will also have to become more discerning in its consumption of social media, newspapers and TV, learning to distinguish entertainment from information.
Gianni Riotta
There is a passage from the Gospel of John (8, 32) that may also strike a chord with those who do not believe: “You will know the truth and the truth will set you free”. However, St. John also said, “Men loved darkness rather than light”. This is why disinformation is so difficult to block. People tend to choose something that is easy to understand. It is easier to say it was the Chinese or the Americans who spread the Covid-19 coronavirus rather than say that scientists are still tediously and meticulously trying to understand how it happened. Several studies indicate that there were more victims among the public that followed US TV anchormen who claimed the non-existence or harmless nature of the virus than among the public who followed anchormen in favour of face masks and advised the public to wash their hands. Disinformation kills: this is no longer just a slogan, it is one more reason to combat it.
Ian McCarthy
Two opposing things are happening. On the one hand, where someone can benefit politically, there is more disinformation. On the other hand, in certain areas, an increasing amount of work is being done to provide knowledge and truth. This also applies to companies. Steak-umm, which produces frozen meat, has become famous for its use of Twitter as a channel to fight disinformation and educate the public to interpret the news and data provided by TV news programmes. For an organisation, being more sincere may also be a risk, given that some truths are unpleasant. The situation is polarising: some prefer to communicate with seductive bullshit and others want to defend truth and knowledge instead.
Gianni Riotta
The media are coming to terms with this period of change. When Italian Prime Minister, Giuseppe Conte imposed the lockdown, many people were said to want to leave the North, in a hurry, to travel to the South. TVs showed hordes of passengers anxiously storming the trains; however, using geolocation data from a Swiss data media company, data journalist Jaime D’Alessandro of la Repubblica revealed that it less than 200 people were involved. Similarly, the New York Times was able to say how many people left New York during the emergency, by observing the change of address requests. A journalist can build a narrative from the data. It is also a transition period for companies. According to the Financial Times, the emergency prompted Walmart to hire 230,000 people and Amazon to hire 100,000. The meat supplier, Tyson Food, requires new slaughterhouse workers to meet the demands of people forced to stay at home. The advertising narrative has changed: companies want to let customers know that they have changed their mindset.
Ian McCarthy
Processing information with the right mindset is challenging. It is necessary to understand who says what, according to what logic and for what purposes. Disinformation can be convenient and seductive. Starting at primary school, or at least at secondary school, we should be taught to recognise a certain type of communication and nurture scepticism.
Gianni Riotta
In the days of the global village and the media according to Marshall McLuhan’s notion, it might have made sense to say “I saw it on TV” or “I read it in the newspaper”. The media were perceived as a source of truth. However, we have moved on from the age of mass media to that of personal media. Everyone has their own data, their own website, their own chatroom. I am often asked how trust can be rebuilt, such as trust in the European Union, for instance. Sowing trust is, however, something that belongs to people of faith, prophets and visionary leaders. As a journalist, I was trained to spread scepticism about the dominant power: now we need to restore harmony between citizens and leaders.
Ian McCarthy
Fake news travels faster than the truth because it is free, it is not anchored. It is more seductive and induces more action. Its cost to society is enormous. For example, let’s think of ecology. Economists should also be tasked with measuring the costs of information and disinformation and, from this perspective, the tragic Covid emergency could be a decisive turning point. Gianni Riotta
In conclusion, some good news: according to data from Nando Pagnoncelli, the reputation of scientists, scholars, doctors and microbiologists is improving for the first time in the last twenty years. During the times of polio, when people were dying and citizens witnessed President Roosevelt disabled due to its consequences, everyone loved vaccines. Once the emergency was over, many began to question vaccines, with the birth of the No-vax movement. People are once again afraid of an unknown virus, and doctors and scientists have become popular again. We need to work hard to explain why propaganda cannot come into play when public health is at stake. We must try to understand how many people we could have saved if we had been better at combatting disinformation. * Ian McCarthy is Professor of Technology Management at Luiss and Professor of Technology and Operations Management at Simon Fraser University. Gianni Riotta is a journalist, writer and television presenter. He is Director of the Luiss School of Journalism and Pirelli Visiting Professor at Princeton University. 6. Digital resilience 21 may 2020 , *
Giovanni Lo Storto
In Yuval Noah Harari’s article in the Financial Times (“The World after Coronavirus”), he invites us to reflect on the apprehension we have always felt towards digital technology: the idea that man can succumb to machines. On the contrary, in recent weeks, we have learned how important resilience is for human beings; it adds new value to our relevance.
Cristina Alaimo
Today I would like to apply resilience to the digital world. I would like to use it as a lens to better understand the relationship between digital technologies and organisations, reflect on the acceleration triggered by the crisis and share some general reflections on the digital transformation of organisations. The word resilience has a double meaning that starts from the concept of jumping back or bouncing, “to rise again”. So, it symbolises a double leap: an initial leap that is limited to responding to an external shock, a crisis, and a subsequent, more active leap that is more focused on a reaction and active participation and, therefore, on innovation and transformation. Understanding digital resilience means understanding the role of digital technology in facilitating the transition from reaction to change; of how, through a process of interaction between technology and organisations, a real digital transformation of the latter is achieved. To do this, we must first dispel some false myths about technology, raise opportune questions and try to understand how sometimes technology itself may even be a limit for organisational resilience and digital transformation. In the USA, there was a boom in claims for unemployment benefits in the first weeks of the crisis. The state of New Jersey went into crisis in the face of this avalanche of applications because its data management was based on software written in COBOL, a kind of mythological digital language invented 61 years ago. This language still resists in some organisations, public administrations and banks. In this case, as in others, technology is inflexible and an obstacle, rather than an imperative of transformation and renewal. When this happens, it is usually caused by path dependence, meaning that the design or implementation choices made in the past have consequences in subsequent periods; for example, they can limit future choices, resist change or hinder the capacity for resilience. The presence of path dependencies is one of the fundamental characteristics that must be taken into account when questioning the possible role of technology for organisations. In other cases, technology becomes a push towards resilience. With regard to the first and most passive meaning of resilience, we have all seen how schools, universities, public administrations, as well as banks and merchants have been able to benefit from platforms and applications to move their activities online. Remote working is an example of the digital world’s ability to increase the first type of resilience: adaptive. This can happen regardless of a company’s degree of digital maturity. During this first stage, technology is capable of launching very powerful processes of change that, on the one hand, protect subjects from an external shock; on the other hand, it must be managed with a spirit of adaptation and innovation. Organisations can respond in different ways, for example, by experimenting or developing systems in collaboration with other organisations, such as start-ups or technology innovators. Some initiatives have worked well and others have been less successful but this is precisely the time when organisations can move from the first phase of resilience to the second; one in which they not only survive but actively learn and react. Digital technology is a necessary starting point but cannot single-handedly gain resilience. To pass from the first to the second type of resilience, we need to treasure our experience. We need to try to understand which processes have worked and incorporate them into a system, share the strategies that can be implemented thanks to digital technologies, and create new visions. This, in my opinion, is exactly what happens when you move to the second stage of resilience; new visions and new meanings are found. The result is a genuine change that leads to the transformation of organisational and social models. Studies on virtual teams suggest that, if integrated into a redesign of the working model, technologies can lead to increased participation in organisational processes by augmenting the inclusion of marginalised individuals. Remote working can facilitate the organisation of temporary teams that enable organisations to experiment with new collaborations, to the point of creating new value chains or new ecosystems. Here are a couple of examples. The first concerns the transformation of value chains. Developing Internet of things applications, that is networks of physical objects, especially in manufacturing, will certainly require existing organisational models to be reconsidered. What comes to mind are the experiments with digital twins and the virtualisation of manufacturing processes. The innovative opportunities offered by these types of technologies will only lead to a transition from the first to the second type of resilience if the organisational skills that can cause a transformation are harnessed. The second example concerns digital ecosystems. Let me tell you about a personal experience that happened about twelve years ago when I moved to London in 2008. We used to travel around with a very heavy book London A to Z, a comprehensive street map that is useful for orienting oneself and finding the underground stations, which is very complicated to use. Meanwhile, the smartphone revolution arrived and the London public transport authority opened its databases, making a huge amount of data “open” (first in 2007 and then in 2012). Thus it favoured the growth of an ecosystem of developers which then began to produce applications to support city mobility. Today, this ecosystem features 17,000 developers and more than 600 applications; in London, 45 percent of travellers use apps that run on Transport for London’s “open data”.
I would like to conclude with a fundamental aspect that we have learned from this crisis: no one can succeed alone. Resilience needs digital technology, but it also needs a systemic approach, in the sense that resilience must be accompanied by a majority of the social actors, organisations, institutions and people. How can we achieve this? One example is to train new professionals; digital bricoleurs who can put different pieces of knowledge together and use them to interpret the present and imagine the future, thus facilitating change and transformation, acting as a bridge in the relationship between technology and organisations. A second proposal would be to focus on infrastructures, not only technological but also socio-cognitive, in order to facilitate widespread knowledge, capable of bringing together technology and culture with the participation of all the actors of social and economic life. If we do not all make this change together, it will be more difficult for individuals and companies to reimagine the future.
Agostino Santoni
I was thinking about a message that I receive every morning from a colleague: today, the message was “#87”. We have been submerged for 87 days: not only us, but the entire digital, telecommunications, information technology sector that is needed to make a country function. When considering this period, in relation to resilience, let us think back to some of the major issues discussed in our sector: is ultra- broadband needed or not? Should the cloud be used or not? Does smart working make sense or not? Is it important to bring digital technology into the school system or not? Imagine the effort made by cloud service engineers in trying to simulate an exercise that was unprecedented in the digital, cloud services or telecommunications sectors, absorbing an extraordinary increase in internet traffic. This period has seen a great part of the country’s functioning processes change with extraordinary speed. We have seen regional councils held by videoconference, we have seen mayors, regional presidents, our prime minister and the world’s major players using technology. We have seen hospitals, doctors, universities and companies transform a large part of their activities to digital. In my opinion, this exercise has an incredible magnitude, one that makes you reflect and also makes you rethink the way we have viewed technology up until now. At Cisco, we have been using smart working since the beginning of our company’s history, but we too have experienced problems. The biggest problem was that, while people could choose before, at a certain point they no longer had a choice, because we were all forced to stay at home. Thus, the first principle of our management strategy, the opportunity to choose, was missing, and we entered an organisational model that envisaged and still foresees new rules. Speaking about flexible work and smart working implies a transformation of leadership and the organisational model: here too, everything starts from the trust we want to place in our staff. In my opinion, it is essential to put people at the centre, not only in the digital resilience process but also in designing a new leadership style and the new future we want to pursue. In addition to rethinking leadership, there are other issues to reflect upon in the short term: how do we imagine office spaces? How do we see an organisation functioning when some of its staff work in the office and some from home? What technologies will be needed? How can we identify the bandwidth needed for office work? How can we fully control the experience and security of the technology that is used at home? How can we rethink spaces? Digital must not divide, it must unite. During this period, we have launched a very important experiment, providing a digital training service through the Cisco Academy, also in areas that are not immediately obvious, such as prisons. A judicial police officer, Costantino Minonne, managed to invent a process that lets prisoners safely communicate with their families, bringing this experience to 55 other prisons. He did this alone, without our contribution. This shows us that technology can increase creativity, even in areas where it seems complicated; I believe it is the best contribution that digital can make to create a stronger and more capable country. Digital must be available to everyone: we already knew it and now we have experienced it. The whole model must be redesigned; both businesses and public administrations require flexibility. Company CEOs and heads of state around the world are currently thinking about how to model the period we are living in and this is a very difficult exercise, which requires a great capacity for cooperation.
Cristina Alaimo Are there any sectors that are able to respond to digital trauma in a more flexible way than others? I would shift the focus from sectors to the level of digital maturity, i.e. how different sectors or organisations are prepared to respond to digital trauma and what skills they possess or have developed. Some sectors, the so-called digital native sectors, are prepared to react earlier, including companies that already work with digital technology and data; since they are “digital-born”, these businesses will be more prepared to react to frequent and continuous changes. This does not mean, however, that more traditional sectors cannot have an equally prompt response. Here, we return to emphasise digital maturity and the level of collaboration, the degree of organisational openness that companies have towards other actors, such as start-ups or software developers, creating alliances that can be the impetus towards digital maturity. It is time to reconsider our model of social development so that it is sustainable, green and takes into account not only environmental but also social costs. Digital resilience implies a systemic approach: rethinking at the company level. A single organisation is better able to transform if it is immersed in a social environment that responds to change and rethinks its own development models.
Agostino Santoni
We do not imagine a future where the experience of life and socialising in an office will no longer exist: we have always imagined a model that combines activity in the workplace with the possibility of making a choice because it is based on trust. I have noticed during this period that people subscribe in much greater numbers to the, obviously digitally, initiatives we launch as if they needed contact with the company. We are also very present in the field of social responsibility, an activity that we tackle with real energy because it has given the company a new mission, that of helping someone.
Cristina Alaimo Let us consider the concept of culture: corporate culture, shared culture and a culture of trust. Within organisations, culture can and must be safeguarded, but perhaps also transformed when technologies become part of the relationship. In fact, we are witnessing a change of control in the relationship between employees and organisations, a change in the way outputs and products are monitored. The right leadership is vital in order to minimise risks and increase the opportunities brought about by this technologically- derived change of control. It is an opportunity to build and maintain a new concept of trust between an organisation and its employees, which also includes digital technology.
Agostino Santoni
As regards the dialectic between the advent of digital technology and the loss of jobs, we have identified a sample of 20 Italian companies of various sizes to which we brought our digital expertise; the companies, in turn, brought the labour skills of their employees. In all of these cases, I have seen no job losses, rather new hires on cybersecurity, on digital technology, as well as growth in revenues and employment.
Cristina Alaimo
As regards jobs: some will be lost and others will be created; I think it will be a situation that we can respond to as a system. We must be careful about which jobs are lost and which are created. For example, we should avoid removing middle management posts and creating precarious posts; instead, we should make sure that the value of the jobs created compensates for those lost. * Cristina Alaimo is Assistant Professor in Digital Economy and Society at Luiss. She holds a PhD in Management, Information Systems and Innovation from the London School of Economics. Agostino Santoni is the CEO of Cisco Italy; he has extensive managerial experience in the ICT sector, which began at Compaq Computer and culminated in his position as CEO at SAP Italy. Giovanni Lo Storto is the General Manager of Luiss, an independent director of doValue and Pirelli, and sits on the Board of Directors of the Internazionale and Formiche magazines. He is a Knight of the Order of Merit of the Italian Republic. THE CHALLENGES OF THE POST-PANDEMIC FUTURE 7. Pandemics and Value Chains: what future for globalisation? 9 june 2020 , *
Paola Severino
The last few decades have seen a transition from the exchange of goods to the exchange of values, with enormous consequences for the economy. The developments of such a change have made interdisciplinary studies increasingly necessary: let us consider, for example, the consequences of investing in dematerialised assets such as derivatives, which lay at the core of the 2008 economic disaster. The judges who dealt with this phenomenon had to demonstrate that they were also competent in economic matters whereas, at the same time, economists understood that they also needed to know the legal repercussions of this type of investment. The pandemic has brought the issue of production chains back to the centre of attention, causing distress to globalization. There are two possible reactions: the first is protectionism, with restrictions in the exporting of essential goods (including face masks, in recent months); the other is a strengthening of the chains. I believe that this latter system can work much better than duties or export bans, which would instead strongly impact the guarantees of freedom and democracy represented by globalization.
Valentina Meliciani
What future for globalisation? The arguments that could lead to a weakening of the globalisation process, through deglobalisation or reshoring, have much older roots than the current pandemic. These roots have little to do with the impact of Covid-19 on the functioning of global value chains and, in particular, on the need to make them more robust and resilient. In the last fifteen years of the twentieth century, globalisation experienced a strong acceleration due to the fall in transport costs and the spread of information and communication technologies. In his book, The Great Convergence, Richard Baldwin spoke of unbundling, defining it as the localisation of the production process in different geographical areas according to the economic advantages offered by different countries. Initially, the various phases of the production chain with the highest added value (research and development, industrial design, marketing and branding) were placed in the most industrialised countries. In contrast, the phases with lower added value (such as the production of standardised components and assembly) were placed in emerging countries. Subsequently, however, several emerging countries, and China in particular, managed to appropriate a growing share of the added value generated within the value chains by investing in research and development. China has emerged victorious in the globalisation process, which is also evident in the recent trade disputes between this country and the United States. We must consider this fact in order to understand the pressures of reshoring much more than the arguments on the fragility of global chains and on the need for utopian self-sufficiency in key sectors. The financial crisis of 2008 opened discussions on a Great Trade Collapse, with strong repercussions on globalisation. However, according to World Bank forecasts, Covid will cause a 10 to 30 percent reduction in international trade over the course of 2020. This will be a genuine “greater collapse” more serious than the previous financial crisis as it involves a greater number of countries and because it affects not only the demand for goods but also the supply. What is the impact on global value chains? This was already discussed before Covid-19 became a pandemic when the virus hit the province of Hubei. The province is rather small in terms of the share of China’s GDP, but it is an important manufacturing hub, integrated into the value chains of the automotive and electronic sectors. We then suffered the same shock in Europe and the United States, with an interruption of production on a global scale. Questions lingered as to whether this vulnerability was the result of globalisation. The World Economic Forum contributed to the debate and advised shortening the chains in response to Covid. Therefore, we talked about the resilience and robustness of the chains. Resilience refers to the ability to return to normal soon after a crisis, while robustness refers to the chain’s ability to remain operational during a crisis. Robustness is, therefore, very important in key sectors, where we cannot afford to interrupt production. The strength of the chains increases by having many suppliers and many alternative production locations. For example, in Japan, after the 2011 earthquake, suppliers to the automotive industry were diversified. Investing in robustness, however, means spending large sums to monitor risks and diversify the supply; therefore, we prefer to improve resilience, with stable supply relationships. Reshoring – the opposite of offshoring – is not recommended if you want to prioritise robustness. In fact, we do not know where a possible shock might take place and there is a risk that it will hit the domestic economy. When South Korea was struck by Covid-19, Samsung was able to take advantage of also having factories abroad, for example, in Vietnam. Two errors must be avoided when it comes to essential goods such as medical devices and pharmaceuticals: believing that self-sufficiency and domestic production can guarantee robustness and inviting debate on the issue of manufacturing localisation. When faced with an increase in demand, supply must be augmented, which can only be done by exploiting global value chains. Multinationals are fragmented, and it is unrealistic to think that a single country can produce every single essential medicine and vaccine on its own. International trade also encourages research and development, since investments must be repaid with the possibility of exporting the results. Future policies will have to support companies’ efforts to build stronger and more resilient supply chains. Despite the current trend towards regionalising value chains and the weakening of the multilateral system centred on the WTO, it is unrealistic and misleading to think of self-sufficiency as a viable option. The future of globalisation is uncertain; however, globalisation must be governed. Renouncing the internationalisation of production is certainly not the best idea to effectively overcome the pandemic.
Silvia De Dominicis
Johnson & Johnson is a healthcare company and we differentiate our multinational activity into three sectors: the pharmaceutical industry, medical devices (of which we are the sector leader in Italy) and consumer products. The healthcare system is highly regulated and follows the principles of accessibility and sustainability. Therefore, our goal is to produce medicines and devices on a large scale, capable of counteracting global diseases at a sustainable cost in as many countries as possible. A large percentage of the cost of a pharmaceutical or medical device is related to its research and development. Therefore, it is necessary that the following phases, manufacturing, distribution, etc., are as efficient and effective as possible. The globalisation of value chains exists because it allows for those economies of scale that make this aspect of our work efficient. Before a drug is put on the market, a high specialisation of work is necessary, as well as the standardisation of production factors and quality, which could be undermined by fragmented manufacturing. In addition to robustness and resilience, mentioned earlier by Professor Meliciani, I would also mention flexibility: the need for production sites that are capable of quickly rearranging themselves according to the productions that ensure the protection of the world population’s health at any given moment. I can only confirm the phenomena taking place: the concentration of the initial phase of research and development, the careful planning of demand and a sourcing strategy linked to raw materials and labour. For example, we have invested in a production plant in China, where the population is more heavily affected by liver cancer than in other countries. We are also incentivised to invest in emerging or developing countries, following certain criteria – such as stability, legal certainty or lean bureaucracy – that enable long-term planning: the so-called ease of doing business. Digitisation and new technologies will make it possible to assemble the product in locations that are closer to the reference markets, but such a process is consistent with that of the value chain, which will remain globalised.
Paola Severino
Without a doubt, the factors that Silvia De Dominicis indicated are those taken into consideration by companies when choosing where to invest. Legal certainty offers opportunities to do business legally and legitimately, so it is extremely important that judges are specialized in business law. A corpus of judges trained in this way will not only adjudicate more fairly but can also offer a value that is highly sought after by multinational companies: namely predictability. In Italy, we do not have a system based on precedents, as is the case in Anglo- Saxon countries, but it is still necessary that legal decisions be more predictable. It is thus crucial to monitor the effects of certain decisions and solve the problem of uncertainty in applying the law. The measures exist, but they must be activated, also in the political sphere, by finding a parliamentary majority that wants to render this country truly attractive for multinational companies.
Silvia De Domincis
At Johnson & Johnson, we reacted to the emergency by demonstrating great teamwork; we closed the factories one week before Italian Prime Minister Conte requested it. Nonetheless, we were able to guarantee production, a very important factor given that one of our two plants in Italy deals with drug manufacturing and serves half of the global need for products to combat HIV.
Valentina Meliciani
In terms of resilience, the way companies responded to the Covid-19 crisis was similar to their reaction in 2008. The initial shock was stronger, but the recovery was faster. The most innovative companies reacted better. The ability to react was not linked to the size of a company, but to its flexibility, a quality that can be achieved precisely through global value chains. Thanks to these chains, larger companies can specialise in certain phases of the manufacturing process in which they are more competitive, entrusting the other phases to smaller companies. For example, the machinery sector in Italy is very robust and is strongly integrated within global value chains. Italian companies export machinery in large quantities, especially to Germany; this is one of the reasons why Europe is responding positively to the financial problem posed by the current crisis, also with the establishment of the Recovery and Resilience Facility. It is in nobody’s best interest for our companies to suffer excessive kickbacks. Paola Severino
Italy must ensure that it does not lose the confidence of other countries and, for this to happen, not only do we need to think about how we are represented but also, and especially, in which way. We must be transparent, allowing everyone to verify the high quality of our production. During the emergency, some countries denied the spread of the epidemic in their territories; this was truly reprehensible conduct that inevitably generated mistrust. Whereas each country measured the phenomenon as it saw fit, it would have been vastly more beneficial to adopt a common measurement criterion. From this point of view, Italy conducted itself very well, with courage and determination, admitting its data. The discouragement of the first few days led us to be cautious and allowed us to give a better account of ourselves than those who had unfairly lied. For the positive representation of a country, therefore, one of the central criteria is the correctness of information: those who want to invest with us must be sure that Italy is a country that does not deny its problems but rather seeks to combat them.
Silvia De Dominicis
At a global level, based on facts and data, Italy has a healthcare system second only to that of France: we must be proud of it, no longer in awe of the Anglo-Saxon world. A healthcare system that is able to support its patients in the moments of greatest weakness makes a huge difference! Our surgeons are also among the best in the world, and the experimentation of new technologies very often involves Italian personnel. On the one hand, it is essential to continue to create efficiency in the healthcare system and, on the other, to convince multinational companies which invest in innovation that their research is important for the Italian State. Johnson & Johnson, for example, is partnering with a number of Italian hospitals to develop robotic surgery based on the self-learning machine. Valentina Meliciani
While Italy can boast of being intensely competitive – for example, in the export of specialised machinery – and being the second European manufacturing industry after Germany, all of this occurs in spite of a series of factors. The “in spite ofs” are public and private investments. Beginning in the mid-nineties, Italy experienced serious productivity growth problems at an aggregate level, including also services in the calculation. During this period, the dynamics of tangible investments (in buildings and equipment) and intangible investments (research, development, training) were inferior to that of the major European countries. Italy dedicates much less funding to education and research compared with the European average; despite this, our researchers are well-positioned in international rankings, in terms of, for example, publications and citations. The acceleration of our country’s growth, however, requires further investment in education and research. * Silvia De Dominicis is the CEO of Johnson & Johnson Medical and Vice President of Confindustria Medical Devices. She previously held roles of increasing responsibility at a national and international level in the areas of Operations, Sales and Marketing. Valentina Meliciani is Professor of Applied Economics at Luiss and Director of the Luiss School of European Political Economy. She previously taught at the University of Teramo, she has been visiting scholar at SPRU at the University of Sussex, the University of Minnesota and the London School of Economics. Paola Severino is Vice President of Luiss, where she is Professor of Criminal Law and a former Rector. She was Minister of Justice during the Mario Monti government. 8. Sustainability during the pandemic 11 june 2020 , *
Paola Severino
In December 2019, shortly before the pandemic spread to Europe, the EU approved the European Green Deal, a roadmap for a sustainable economy. The European Green Deal is a new growth strategy to transform the Union, starting with a project to stop all greenhouse gas emissions by 2050. It also aims to separate economic development from the exploitation of resources and to ensure that no person or country is left behind. This kind of transformation will only be possible if the transition is made inclusive and the challenges of climate and environment are turned into opportunities. All of this was already happening before the pandemic. Many large international groups had decided to base their competitive strategy not only on profit but also on shared value, incorporating the UN sustainable development goals in their action plans and giving them the same importance as economic and financial aspects. Under Francesco Starace’s leadership, Enel has become one of the leading industries, also considering the central role given to sustainable production. In just a few years, it has positioned itself among the world’s leading producers of renewable energy. The pandemic has highlighted new priorities that are relevant to the present and the future. However, this period must be reconsidered as an accelerator that will allow us to restart. It is extremely urgent and important to discuss these issues.
Frans Berkhout
Although I have a degree in geography, my entire career has centred around innovation and I have always been interested in the issue of risk, firstly in relation to industry and nuclear weapons, and then in terms of the environment and climate change. I would like to focus on three points which concern sustainability and the pandemic. First of all, it should be said that pandemics have always shadowed humanity; they derive from the interaction between society and nature. This virus, like many others, is a zoonotic disease; it is passed from the animal kingdom to humans and is capable of causing high mortality due to the lack of prior immunity. Zoonotic diseases mainly spread in cities, due to the intensive interaction between humans and animals, which are used as food or kept for other motives. Urbanisation has reached historic highs: currently, more than 50 percent of the world’s population live in cities. The extension, expansion and intensification of natural resource extraction also contribute to increasing risk factors. This is why pandemics are so frequent, and why we moved from SARS and MERS to Covid-19. We can predict that there could be even more pandemics in the future, due to the structural change brought about by economic growth and the way we use resources. Therefore, in order to manage risk, we must pay close attention to how human society interacts with nature, especially with regard to the exploitation of resources, to hopefully arrive at a more circular economy. Secondly, as many have observed, the pandemic had an immediate impact on global production and consumption. The pandemic illustrates how the momentary interruption of the economic process causes very serious effects. People stopped travelling, industrial production stopped and energy consumption slumped. One such example is the use of oil, which dropped by 20 percent, leading to the collapse of its price like that of liquid fuels. Consequently, carbon dioxide emissions dropped and pollution in our cities significantly decreased. Nature reclaimed its spaces: the number of butterflies increased considerably in England and dolphins were sighted in the Gulf of Naples, to give just two examples. Consequently, the pandemic has had a strong impact on the environment and the use of resources, from which we have more than one lesson to learn. Thirdly, we must note that the pandemic has accelerated the pace of digital technologies; in the long term, this could lead to considerable progress in terms of sustainability. It is not only travel that dropped sharply, but commuting also decreased, thanks to teleworking on platforms such as Streamyard, Teams and Zoom. Therefore, we will need to rethink infrastructures and figure out how many roads and railways we really need (always considering the necessity to transport goods). We could even reconsider the very concept of cities. Will large companies still have huge city-centre offices that are accessed by thousands of people? Or will there be local hubs interconnected through a new idea of organisation? Of course, we must consider the rebound effect. As early as the nineteenth century, British economist William Jevons reflected on a similar concept: efficient use of a resource encourages new behaviours that bring with them a kind of negative impact. Let me offer a classic example: creating a more efficient car that uses less petrol also means getting people to travel more because travelling is cheap. In this way, all of the new car’s energy savings are cancelled out by these new behaviours. We have to ask ourselves about could be the backlash of the changes caused by the new situations of this period. Generally speaking, it will be crucial to see how we respond to all these new situations, not only publicly, but also privately. Will we try to follow the wave of greater efficiency, or will we resist to keep everything as it is?
Francesco Starace
The period of the Covid-19 emergency gave rise to an unprecedented acceleration of reflection on sustainability. At Enel, we had been asking ourselves for some time – as all companies should – what is our real purpose? Why we do what we do? The answer is that we want to be at the centre of the society in which we operate. A society needs electricity to thrive; it is essential to provide it with the least possible impact. This is why we are taking the path of sustainability. The period of the emergency made our mission even more evident. We cannot even begin to imagine what locking people in their houses without electricity would have meant. Covid-19 reaffirmed our responsibilities, helping us to understand what was superfluous and what was necessary. The crisis forced us to stay at home. If we had spent that time training to play tennis, we would have emerged much stronger, having learned things about the game that we would never have forgotten. Likewise, we underwent intensive training which, by influencing our behaviours, unconsciously allowed us to step towards the future. We understood how important it was to protect ourselves, limiting travel, both for ourselves and for the well-being of all. Interaction between people was put to the test; however, in a moment of significant symbolic value, we were able to stay connected and united thanks to technology. For example, during this period, I made 260 video calls, each lasting about 20 minutes, with Enel’s top managers in all of the countries where we are present. Among the many things that emerged, we understood how strong the impact of our actions was on others and the value of everyone’s work. Unlike in 2008, no one’s inappropriate conduct sparked the crisis this time. We were all on the same side but external and unpredictable factors forced us to stop, to limit the damage. Likewise, we must continue to cooperate in combatting climate change, but that is not all. As Prof. Berkhout said, we will have to reconsider the concept of cities and work to increase the quality of life, even outside of them. Perhaps we were aware of many things, even before the emergency. We currently certainly have a better understanding and ideas come to us much more instinctively, leading us to redefine certain concepts, such as the real need to travel by plane or the way we experience our workplace. The fact that many post-Covid-19 scenarios have already occurred allows us to take a big step forward.
Frans Berkhout
As Francesco Starace argues, the lockdown experience has prompted us to reflect on the value of our relationships, pondering what is essential in our lives, considering our social and environmental impact. We have tried to make sense of all of this and it will inevitably have an impact on our way of life, from work to travel and consumption.
Francesco Starace
Half of Enel’s staff are working from home, but the other half have had to work on-site in the power plants and grids to ensure the continuity and quality of the electricity service. This second half has had to change their processes, procedures and protective equipment; they have seen their work transform into a completely different experience. Their job was only made possible by committing themselves to even the smallest tasks and trusting each other. Even without a pandemic, a company could not move forward without trust. The emergency made us more responsible, giving us more chances to make choices and take initiatives. Therefore, trust has also had to increase: everyone has become more responsible. In one week, we defined a new KPI (key performance indicator) system to detect the major operational parameters of the company on a daily basis, and make sure that everything ran smoothly while we were isolated in our homes. Digital transformation has been of great help to us; five years ago, it would have been impossible to carry out such a change with equal precision. Meanwhile, thanks to investments in digitisation over the last few years, we had already completed the process of transferring all our data and applications to the cloud last year, thus managing to guarantee business performance even during the pandemic.
Frans Berkhout
The digitisation process in the environmental field began some time ago; people like me have been talking about it for twenty years. Researchers have already thoroughly explored other forms of virtualisation, from music, which has gradually abandoned physical media, to that of news, which we now receive on our phones and no longer in print. One of the consequences of digitising industry is a decrease in the use of resources. The Covid emergency is leading to the rapid and extensive adoption of that potential that technology has been capable of for some time. Innovation directly affects technology users; the consequence will be a further decline in the exploitation of resources. The long wave of technology includes not only digitisation but also biotechnology, DNA manipulation, etc. These trends have been converging for some time and there is every possibility that we can achieve a sustainable economy. It is about creating new values, connections, opportunities and chances to be creative. This acceleration could lead us to achieve the goal of having zero emissions or a circular economy. It is the right course to follow.
Francesco Starace For some time now, large multinational companies, followed by smaller companies, have been paying close attention to renewable energies, also to ensure their competitiveness on the market. Renewables reduce energy dependence on imports for the supply of fossil fuels, thus remaining decoupled from the volatility of commodity prices (e.g. oil and gas). The renewables boom began around three or four years ago and continues to take hold; it will not stop for many years to come. A slowdown is possible if the cost of fossil fuels is artificially lowered in some countries; however, that would be a mistake on the part of governments. Destroying the environment and, at the same time, the value of one’s resources is in no one’s best interest. Therefore, everyone can appreciate that renewable energies are not a passing fancy.
Frans Berkhout
The way we work will undergo a structural change. We realised that working in an office is not the only way to be efficient. Of course, working from home is not without weak points and it will still be necessary to resort to face-to-face meetings and build social capital that is the basis of trust within an organisation. Still, some things will not go back to the way they were. There will be a sharp decline in business trips, which is why many airlines are cutting staff. Travelling is tiring, it wastes time and becomes pointless if you can replace your business trip with a meeting on Streamyard with your colleagues in China or America that doesn’t make you lose more than a few hours. Many transformations will take place in the name of efficiency. We must ask ourselves rather what we will do with all the time and money we save, how consumption will change and the way we relate to the space around us. I still do not have a precise answer. Perhaps, as Francesco Starace says, it will be linked to a new awareness of what really matters to us.
Francesco Starace I did not decide overnight that Enel should shift towards sustainability; the process was understandably long. However, I recall when, back in the 1980s, I found myself working in the Saudi desert on a wasteful fossil-fuel project. The task was to build an oil- fired power plant. It was highly inefficient. Even though the country sits on a sea of the stuff, the fuel needed to be transported by lorry hundreds of kilometres across the desert from Jeddah. And to begin with there were no customers; its aim was to provide a way to persuade nomadic tribes to settle down in air-conditioned homes. I asked myself “Why did we do it? What was the point if the people of that area had no such need?”. Years have passed, but I still ask myself the same question.
Frans Berkhout
From the perspective of sustainability, perhaps one of the negative impacts of this lockdown could come from the consumption of plastic, including materials for our protection, up to packaging and food delivered to our homes. Among its other advantages, plastic protects and seals; it is fundamental in the medical and hygiene fields. This is another area where the pandemic must push us to seek alternatives. Let us consider the huge quantity of masks produced: the users themselves designed a system to pollute less, by inserting small disposable filters in reusable masks. We must try to conceive new types of packaging, personal protection systems and clinical settings that use less plastic. This is a great opportunity for small start-ups; they could satisfy the demand for alternative systems. Whoever finds a solution to this problem will undoubtedly become extremely rich!
Francesco Starace
I would like to conclude by recalling a 2009 film, Up in the Air, by Jason Reitman. George Clooney’s character travels 270 days a year to lay off people across the United States, and tell them “you’ve lost your job, here is your severance pay. It’s not your fault, but we have to let you go”. At one point, the company suggests that he carry out his job virtually, via video. While it seems like a good idea and much more sustainable in theory, people react more angrily when learning bad news through a screen, given the lack of human warmth. The protagonist, therefore, returns to live his life always on the move. I mention this just to say that we cannot know which activities will still be carried out via smart working after the lockdown. It is something that we will have to find out. * Frans Berkhout is Executive Dean of the Faculty of Social Science and Public Policy at King’s College London, where he is also Professor of Environment, Society and Climate. Francesco Starace has been CEO and General Manager of Enel since May 2014. He joined the Enel Group in 2000, holding various top management positions. Paola Severino is Vice President of Luiss, where she is Professor of Criminal Law and a former Rector. She was Minister of Justice during the Mario Monti government. 9. Industrial policies in the post-Covid era. The State’s role in the Economy 14 july 2020 *
Paolo Boccardelli
As a set of strategic decisions aimed at influencing the behaviour of economic actors and the same economic variables, industrial policy is essential for developing and creating conditions of well-being and social cohesion. At the beginning of the nineteenth century, according to the dominant liberal theory, the State had to refrain from intervening in economic relations, which were the domain of private individuals. Everything changed after the crisis of 1929 when the importance of the State’s more active role in society and the economy emerged. In some cases, such as in Italy, this role was very important and direct, with state intervention in the production processes of goods. This was the case of steel production and the constitution of the IRI (Institute for Industrial Reconstruction), established during that time. In those years, state intervention in the economy was aimed, above all, at the efficient allocation of resources in the markets and at promoting equity in the distribution of income, in order to achieve welfare and social cohesion. Subsequently, state intervention evolved, oscillating between the two opposing systems of interventionism and laissez-faire and better delineating the boundaries between the Entrepreneurial State and the Regulatory State. In fact, the entrepreneurial state works on the assumption that markets and economic systems are unable to effectively decide and invest in order to achieve a level of productivity that is adequate to remunerate the factors of production. According to this vision, the exclusive initiative of private individuals could lead some areas to failure, in particular, the area of innovation and technological progress. Therefore, concrete discussion about state intervention in the economy began to take place and the IRI started to intervene in various sectors. Later, the favour reverted back to the markets: the liberalisation and privatisation of economic activities became fundamental objectives for economic growth and the development of progress, supported by studies that showed how a stronger private initiative corresponded to greater creation of wealth and value for communities. These two theories were in confrontation for some time in the various economic systems. Finally, the theory of the regulatory state prevailed in the West; it recognises that the State has the exclusive task of regulating the functioning of markets. Even today, however, not all opinions are unambiguous: some highlight how the State is inefficient and not very productive and how it limits technological research; others see the State as a much greater promoter of innovation than private initiative. There are elements that support both theories: a few years ago, a study revealed how privatisation processes had reduced investments in research and development; however, they had increased productivity results in the technology sector at the same time. This may be related to the fact that private investments are more focused and more concerned with enhancing market research results, while the public approach tends to create new technological domains, new standards and even new markets. According to the theory of the innovative state (M. Mazzuccato, Lo Stato Innovatore, Laterza 2018), all of the most cutting-edge sectors and markets are the result of public investments that have generated an ecosystem of technological knowledge that is available to individuals; therefore, it is important that private individuals can operate efficiently within this system. Furthermore, according to the supporters of the liberal and neoliberal theory, we have not yet achieved a true liberalisation of the markets, which are still heavily regulated by legislation that slows down their action. Today there is also talk of a catalyst state which, through a specialisation strategy, directs private investments by acting as a money attractor in the sectors in which it desires to achieve sustained development. A modern industrial policy must cover three main areas of impact: the first is competitiveness, generating the competitive factors that guarantee the production system has the opportunity to develop and make the most of investments, in both the country system and in Europe. Secondly, it is necessary to support the transformation of sectors relevant to the country and Europe’s economy, such as the automotive, tourism, cultural heritage or agri-food sectors. These sectors must make the transition towards data-driven business models based on new advanced technologies. More generally, it is necessary to focus on an effective public and private partnership in order to create industrial excellence at a global level, capable of competing with all the major players. Marco Simoni
The Foundation I preside over is growing very rapidly: since its creation two years ago, it now consists of about 50 people, which will become 100 by the end of the year. The goal is to build one of the largest Life Science research centres in Italy, based on technologies that are capable of carrying out genomic screening in large quantities. The centre will be open to all Italian scholars, providing them with state-of-the-art equipment and an extensive big data infrastructure, thanks to the two departments entirely dedicated to the development of hardware, software and machine learning systems. Our chosen domains are predictive medicine and personalised medicine, and we want to create a hub in these areas, a meeting place in which Italian and European researchers, as well as the entire health chain, are the fundamental stakeholders. To understand how my work is connected to the topic of industrial policy and relations between the State and the market, I would like to tell the story of Oscar Sinigaglia. He was the president of Ilva from 1932 when the company was nationalised and placed under the control of IRI. After the war, Sinigaglia was appointed president of Finsider, the IRI holding that managed the steel mills, which were numerous, fragmented and poorly coordinated at the time. By exploiting the resources of the Marshall Plan, namely public resources aimed at economic recovery, Sinigaglia invested in new technologies that were as yet unknown in Italy. He engaged in a company verticalisation strategy to concentrate production and supply semi-finished products, establishing the large steelworks in Corigliano. He also stipulated an agreement with Fiat whereby the company would buy half of Corigliano’s steel products every year. In this way, the private company was certain of its supply of a fundamental material for production, and the public company, certain of the sale of half of its product, could supply the rest of the steel to more diversified companies. When we talk about industrial policies today, we need to think in a very practical way, without relying on an abstract idea of public interest. Sinigaglia’s actions were not motivated by the idea that steel was a public asset, but by the need to ensure that the industry could plan its own production and development without depending on foreign steel suppliers which could have prioritised other markets. By doing so, in a few years, Fiat increased its automobile production tenfold, contributing to the Italian economic boom. According to analyses carried out by the largest global investment funds, genetics, artificial intelligence, robotics and immunology will be the most profitable sectors in the next ten years. Research is at the base of these sectors, the ability to produce high-level scientific results, generate patents and ensure that these patents are industrialised. Italy is a leader in life sciences research, but it produces few patents and has low attractiveness for European funds. The idea behind Human Technopole was therefore to invest in a sector in which Italy is already very strong, that of the pharmaceutical and biotechnology industry, to equip our national research with an extra tool by providing technologies and advanced training courses. Public resources should currently be directed towards scientific research in sectors in which Italy is already an international leader, such as agri-food, energy, the aerospace sector and green chemistry.
Paolo Boccardelli
The pharmaceutical industry has changed. Until a few years ago, we were used to thinking of Big Pharma that dealt with everything from basic research to products sold in pharmacies, while the industry has now reconfigured. There are organisations that conduct research, those that deal with clinical studies and others still engaged in production, which allows different-sized players to enter the market competitively. Speaking of restart after the crisis, Italy is a resilient country but this can be both positive and negative: in the first case, for example, its hidden resources such as private savings allow it to cope with moments of crisis. On the other hand, however, it risks sinking into inertia. Italy must take effective action to remove the ballast that currently constrains our market and entrepreneurial initiative, as well as narrow the productivity gap due to administrative inefficiency and fragmentation. As a company manager might say, the real object is to recover the ability to execute at both the state level and the sectoral level in the various areas of the country. Consultation is a crucial factor in making this possible, in opposition to the antagonism between public and intermediate subjects – such as trade unions, Confindustria and other trade associations – and private entities to recover a vision of the future that is capable of generating unity and conversion.
Marco Simoni
The government has adopted a series of right measures to mitigate the impact of the crisis: interest-free public guarantees, bonuses for the self-employed, an unprecedented redundancy fund and a moratorium on layoffs. In the period ahead, a significant effort will be required to identify new sectors in which to direct resources, while other sectors may never be the same again. Meanwhile, returning to the Foundation that I chair, the four values that guide our work are open innovation, internationality, interdisciplinarity and service to the scientific community. These values, which form the foundations of Human Technopole and which we share with Luiss, are not taken for granted. Internationality is not taken for granted, rather it is fundamental in research and consequently in economic development; even interdisciplinarity is not taken for granted, because unfortunately there is a tendency to close ourselves exclusively in our respective research fields; nor is community service, which in my opinion has caused much of the current scepticism towards science; open innovation is fundamental, yet many still believe they can conduct research without sharing data and results with the scientific community.
Paolo Boccardelli As regards the possible increase in the demand for Italian products in the post-emergency period, if it is a high-quality product it will win in any condition: Italy, in certain sectors, is certainly a global leader and must continue to be so. Take the global car industry, for example, in which Italian suppliers play a key role, as well as the tourism industry; these are two very significant sectors which have both undergone structural changes. Tourism will inevitably change following the pandemic, at least in the short to medium-term, and the industry will have to adapt to travellers’ new needs. In the long term, however, the demand for Italian services and products will only continue, beyond contingencies, if the offering is able to maintain high-quality levels and generate greater value than similar products by international competitors.
Marco Simoni
I agree with the fact that the tourism sector must adapt; otherwise, it will lose the segment of customers it has gained. It will be crucial for the industry to react, limiting fragmentation as much as possible, which is our country’s main problem in this area: just like the companies which produce goods, service companies must grow to adapt to the size of the business. * Paolo Boccardelli is Director of the Luiss Business School and Full Professor of Business Strategy at Luiss. He is the author of numerous scientific publications in the fields of strategy, creative industries and business model innovation. Marco Simoni is President of the Human Technopole Foundation and Adjunct Professor at the Luiss Business School in Rome, where he teaches European economic policy. He is a political economist with academic and government experience. 10. The uniqueness of “Made in Italy” coolness 25 june 2020 , *
Paola Severino
One observation sparked my interest on the subject of “Made in Italy”; I was in a small city in Japan when I saw a street lined with Italian flags. I wondered why: was there going to be an Italian festival? Was it the Italian quarter? As I walked along this road, I noticed marvellous shop windows dedicated to Italian fashion, and I understood how much importance was attributed in Japan, and not only in Japan, to the theme of “Made in Italy”. Diego Della Valle’s company has practically become an exception: “Made in Italy” business that is still entirely Italian. In fact, all those glittering shop windows that I saw, decorated with the Italian flag, belonged to companies that had been bought by foreigners. That being said, these companies maintained their Italian brand, because it was too important, as well as Italian manufacture. We must thus ask ourselves the reason for the success of “Made in Italy”, analyzing its economic and organizational models, and verifying how it can be adapted to overcome the crisis related to the pandemic.
Michele Costabile
The key points emerging from several studies on the real essence of “Made in Italy” – studies run to grasp the invariances across different business cases, and so attempting to build a model – are its “embeddedness” as well as its “legacy”. In short, successful Made in Italy products and brands seem to be nurtured and continuously fed by the uniqueness of the “locus” (Italy) where they are located from birth as well as the historic specificities and cultural heritage surrounding them. Mind you, this inextricable bond does not only concern iconic “Made in Italy” products and brands; it transversally affects all products, even those that are apparently less visible such as plants, industrial machines, individual tools or industrial components produced in Italy and appreciated all over the world. And such a causal explanation seems to be the very reason why, while the ownership of Italian brands may change passports, their being “Made in Italy” and, therefore, their nationality and related brand essence, will remain inextricably Italian. This inextricable bond does not only concern iconic “Made in Italy” products and brands; it transversally affects all products, even those that are apparently less visible such as industrial machines and equipments manufacturing solutions and industrial components, products and markets where Italian companies are appreciated all over the world. A good examples are the screw conveyors and feeders used in many different industrial plants and manufacturing sites. Italy is home to one of the world’s leading companies with competences that are rooted back to the Leonardo’s endless screw. Well the screw conveyors and feeders “made in Italy” are, of course, the best performer – so explaining the lasting global leadership – but at the same time thay have the most beautiful design. This anecdotal evidence is just one of the so many insights we collected on the antecedents of the unique charm of “Made in Italy”. On such a topic an explorative study has been conducted using both text mining techniques and a survey. Text mining generated the preliminary hypotheses on the essential elements of “Made in Italy” through conversational analyses of social network contents. The survey, with an explorative aim, confirmed and enhanced our understanding of what people perceive as the root of “Made in Italy” uniqueness. From the study emerged that there are at least six elements that fuel the unique appeal of “Made in Italy”. The first one is related to the ability to create extraordinary products. In fact, everyone recognises that marketing success stories – considering success only what is lasting and sustainable over time – are never separated from the technical excellence of goods and services. Their intrinsic quality and the attention to details make feel the customer special or even unique, as well as the Made in Italy product. Of any country in the world, the precision of Italian manufacture is comparable only to that of Japan. Japan and Italy feature elements of cultural similarity; therefore, not by chance, they share the propensity for seeking – sometimes obsessively – the unique and the technical quality of goods and services. A second element widely considered highly distinctive is the aesthetic sensibility that characterises “Made in Italy” products and that is never detached from functionality. A third element, perceived in the Italian culture as a whole, is flexibility both in manufacturing products and interaction with customers. A true flexibility resulting from the deep empathic behavior to inherent to the Italians’ “social psychology”. In a nutshell Italians have a superior ability in interacting with customers (and through interactions) in finding better solutions for their needs, sometime unique solutions. A fourth element is the humanistic context in which goods and services are embedded, since they are designed: by purchasing Italian products, in some way, perhaps even only by suggestion, you can breathe in history, art and culture. The fifth element is linked to the organisational specificities of “thinkering”. Such approach identify a kind incremental pragmatism, so the ability to continuously improve products and processes, with entrepreneurs and top management who live their companies and manufacturing processes as well as during the Renaissance artisan experienced their workshop being fully involved at any stage of the business processes. Consequently, they never lose sight of the product and production as a social process. The sixth element is the ability to aggregate, deconstruct and re-aggregate technologies and components, generating innovations that also expand upon what others have invented in an original way. Some aesthetic philosophers speak of “Made in Italy” as “enjoyable modernity”. It is a conceptualisation which, beyond its original intentions, excels at expressing the ability to combine the technological avant-garde produced on a world scale, adding enjoyment and appeal (coolness) even for relatively large market segments. In short, through the combination of the six elements, both B2C and B2B products are enriched by a unique charm, well expressed by the concept of coolness. Italy is a country capable of making any product or service cool and this make Made in Italy unique.
Diego Della Valle
“Made in Italy” is charm and, above all, is unique and unrepeatable, in the sense that it is closely linked to Italy. No one in the world can come and take ideas and know-how from our home and transport them elsewhere. This is no triviality: it makes us very strong and unique in terms of competitiveness; it is a uniqueness that is sprinkled throughout the Italian territory, among other things, which means that it is impossible to reconstruct elsewhere. We are not just talking about a few large companies that can be bought and transported elsewhere; there are tens of thousands of small businesses that are almost always family-owned. These are families that are proud of doing this job and who have no intention of quitting. When it comes to “Made in Italy”, there are several excellent companies which only represent the tip of the iceberg. Underneath, there is an equally excellent base of tens of thousands of companies that support the former, and that in many cases work only for them. Of course, there is also the advantage of enjoying a very propitious territory: we have good food, beautiful locations and places linked to culture, which makes it easy to possess a softened, creative and detail-sensitive point of view. If we look at the less positive part, ours is a country that has not become a system. Consequently, all of these individualities, no matter how excellent, are unable to network with each other to become competitive and speak to world markets. Ours is a family business, despite being a listed company; we run it with great respect for the market because the market has believed and invested in us. We own roughly 73 percent of the company and, when we can, we buy shares because we believe in its future. We have a long-term vision that is not always appreciated by the markets. The markets care what happens in three months, while we also want to know what this group will be in five or ten years. It is possible to move from a family business to a public company when there is a vision, and especially when the goal is the good of the company itself. My grandfather was a shoemaker in Casette D’Ete, where our company was born. He repaired, mended and made shoes, which were a basic necessity at the time. My father worked with him and then opened a slightly larger company, and later, together with his brothers, he created a small artisan company: during the day they produced shoes, in the evening they loaded them on bicycles and went to sell them at the markets of Bologna, Pescara and other cities. With a little luck and intuition, my father started to attract an international clientele and became an “industrialist” with a company of 100-200 employees, which was a large company at the time. And this is also how my story began. I was a law student at the University of Bologna. My father wanted me to become a lawyer but the idea of doing his job appealed to me more. Therefore, I tried to convince him and in the end, he allowed me to try, convinced that sooner or later, I would change my mind. Instead, with his help, I moved forward and began building our company: my father has always loved quality, and at home we only talked about work and about where we could buy the best materials. In the beginning, we produced shoes for large American department stores, but at a certain point, we asked ourselves: who knows if we could succeed in putting our name, our brand on the products? I achieved that goal, also thanks to the worldwide explosion of “Made in Italy”. A few years later, I came up with the idea of a product with global resonance, with technical characteristics that suited everyone and, at the same time, instantly recognisable, as well as a brand name that could be read and pronounced in the same way all over the world: with the help of a young graphic designer from my town, Tod’s was born. Tod’s philosophy of life was totally new; at the time, Sundays in the provinces would see people donning a suit and tie, and elegance was dedicated to festive days. I turned the concept upside-down, trying to think of a refined but at the same time very casual elegance: I struggled a bit to convince certain countries such as Germany, but even Italy itself, while it was easier in the United States. Over the course of a decade, that lifestyle was to change the face of tradition and clothing, not only thanks to us but also to other brands that followed in the same direction. This shows that, if someone has a vision, even if something has never been done before, it does not mean that it is impossible. Perhaps you were just the first have that intuition, which translates into a strong competitive advantage. We were lucky because the Tod’s brand was well-liked by very famous people, athletes, entrepreneurs and actors, so it was seen a lot in the newspapers, which was free advertising for us. This success gave us the opportunity to build the so-called third phase in our group, which is the one that can be seen today around the world: now the fourth phase has begun, which is probably the most difficult and also the most interesting. In the meantime, we have structured ourselves by opening many stores around the world and expanding production to a leather goods division and a clothing division. We own approximately 73 or 74 percent of our group. We could have chosen to strike a partnership or join with some large group or sell a part of the company: our choice was to go public, and twenty years ago, for a company in Casette D’Ete, it was not an obvious choice. We went public with the knowledge that we were doing it for the company and also for the family. I must say that we have found extraordinarily friendly terrain and enormous help in development as well. We are currently trying to verify how the company should position itself worldwide both in terms of our supply chain and in terms of communication and image. We have always considered the quality of the products an irrevocable mission, organising a complete production chain in which we verify all of the phases of product manufacturing from start to finish. I believe it is a winning idea because, in a globalised world, the fact that we are one of the most renowned companies in terms of quality gives us a strong characteristic of desirability and respect for the consumer. The web also offers us a great opportunity to speak to our consumers, knowing precisely who they are and being able to offer them high-quality content. Today everyone can speak to a well- profiled consumer, but not everyone can speak about interesting things and not everyone can talk about truly desirable products. We want to take advantage of the fact that we have excellent ingredients to prepare us for being precise communicators of our soul and our lifestyle to a consumer who is waiting for us at home. Moreover, we cannot forget the social role of the entrepreneur and the company: you cannot be a great entrepreneur who is deserving of respect if you do not give back a piece of your achievement to society. I have a foundation for this purpose because I believe that in complicated moments, we citizens, institutions and businesses can solve enormous problems very quickly compared with the bureaucracy of official channels.
Michele Costabile
Sustainability can become a further distinctive element of “Made in Italy” and, more generally, of Italian brands. Indeed, it already partly is, from both a social and an environmental perspective. For “Made in Italy”, we are specifically talking about a sustainability of roots and our historical and cultural heritage; a reservoir of identity and experiences that can allow our historic and iconic brands to continually enrich their offers with symbols and intelligence by drawing on the environment and social context in which they are immersed. In this sense, in Italy more than anywhere else, sustainability is part of the natural survival instinct. Maybe we just need to make an effort to raise the level of awareness about how much sustainable Made in Italy is.
Diego Della Valle
Sustainability is a duty: nowadays, it is inconceivable to imagine an entrepreneur who is not concerned with sustainability. We must also take into account that, today, consumers speak to us through the web, and everyone is asking for a sustainable, well-administered country. So I believe that sustainability, although it may be a pleasure, is, above all, a duty.
Michele Costabile
I believe that the influence of the current pandemic crisis is, right or wrong, perceived as undifferentiated across the world. Therefore, I do not think there has been a negative influence on the perception of the essential elements of 'Made in Italy' and its unique charm. Diego Della Valle
If there are no longer tourists, it is not be because they do not love Italy, but because they do not want to travel for safety reasons. They will likely, as I hope, be back here from next spring onwards. What happened serves as a lesson. While waiting for the vaccine, the only sure thing to do is to reinforce intensive care units; each province must have an appropriate number of beds for its needs. We must fully control the health supply chain, it is impossible to think of buying where there is convenience: that is what we do when we buy carburettors, tyres or other products. The health chain, like the food chain, must be controlled, because these are the two things that allow the country to live. As far as the competitiveness of family businesses is concerned, each company has its own story. An important thing, in my opinion, is to have the clarity to understand, beyond the love you have for your company, if there is a future for that sector, for those products or for that type of company. It is an assessment that must be made coolly. If there are sectors that are no longer competitive, not only in Italy but also in Europe, we need to be able to abandon them. On an optimistic note: for small and very small Italian companies, the problem used to be reaching the market and the consumer. Today, with e-commerce and the internet, it is possible to reach and communicate with whomever you want; therefore, someone who makes ceramics in Todi and needs a thousand customers a year has the tools to create this type of market. We should make sufficient money available to young people with ideas to launch their own small businesses, and thus foster a network of quality jobs in their own country, without forcing them to move abroad. * Michele Costabile is Professor of Management and Marketing at Luiss. He is the author of numerous scientific publications and has gained significant professional experience as both a guest speaker and an advisor to companies, law firms, institutions and government organisations. Diego Della Valle is the Chairman and CEO of Tod’s S.p.A. Paola Severino is Vice President of Luiss, where she is Professor of Criminal Law and a former Rector. She was Minister of Justice during the Mario Monti government. 11. Post-Pandemic Implications for Retail 7 july 2020 *
Sami Kahale
In the retail world, we have experienced four distinct phases during this pandemic, and each of them offers the possibility for reflection. Let us begin with the first phase, the so-called pre-Covid phase, from the beginning of January until 21 February: for approximately six weeks it was a normal period, in which the large-scale distribution market grew between 1 and 2 percent. At Esselunga, we were satisfied that we started the year growing faster than the market pace. My first reflection is that no company acquires the right to longevity: you must keep earning it day after day. The top ten companies in terms of market capitalisation include eight with at least 60 years of history and five with less than 25: they are young companies, which have been able to apply pressure on the older businesses. In the world of retail, especially when business is going well, you need to look at your strategy and business model to understand what it takes to last over time and what instead could be your vulnerabilities, because no business is immune. The second phase started on 21 February and is what I call the hoarding period: for about three weeks, people literally besieged shops and supermarkets to secure the basic necessities. It was not easy to manage operations and ensure that goods were always stocked on the shelves due to the speed with which they were purchased. However, the world of large-scale distribution has generally held up quite well, which is an important fact: imagine what would have happened if we had not managed to secure the supply chain? In this case, the company’s purpose of genuinely offering services was evident; Covid has made it clear that every company must find its own mission, which is its driving factor. The third phase was that of the lockdown, from 9 March to 4 May: we experienced a double-digit decrease during the eight weeks of lockdown. The problem, for us specifically, was that about half of the customers who frequented Esselunga shops could no longer do so because they lived in a different municipality from the one where the shop was located. Furthermore, the most principled shops, with a higher number of customers, were penalised because, with the introduction of social distancing measures, the capacity of the shops decreased and with it the number of customers. My first reflection on this experience is the importance of management and organisation: we had to manage over 24,000 workers according to the various regional decrees, circulars and ordinances. There was much confusion going on and, at that point, my team and I chose two guidelines: the first was to protect the health of our staff and our customers, and the second was to ensure operational continuity of the business. The second assessment that I would like to share is the importance of communicating: communication is the basis of any business, but in a period of crisis it must be doubled, its frequency increased. We need to communicate, communicate and communicate transparently, reporting things as they are, what problems there are and how to address them. This is the only way to gain trust and reassure people. The fourth phase is the post-lockdown period, so from 4 May until today: we have returned to substantial positive growth, thanks to the fact that people could move from one municipality to another again and there was less fear in circulation. We turned to technology to manage queues: apps like YouFirst have been a great help. Another essential factor – which is both a lesson and a future challenge for the entire retail world – has been knowledge of consumer behaviour through data. In fact, we have charted our customer’s behaviour, using mapping to develop targeted actions explicitly designed for them, to thank them and offer a service that constantly improves. It goes without saying that these data are always used with the consent of the interested parties. At this point, what are the challenges that the retail world will face in the future? The first is: what to do with e-commerce? How can we exploit it from an omnichannel perspective? The second challenge is what to do with physical shops, especially considering the constant loss of appeal of larger shops? The third challenge is how to use data correctly to create both a service and a competitive advantage. Finally, the fourth challenge is to achieve a flexible organisation with the right personnel: some people reject change, some people are afraid of change, some people embrace change and some people lead change. Choosing the right people is very important.
Matteo De Angelis I imagined reading current and future scenarios as a model based on two macro-areas of activity: marketing and organisation. It is essential to understand what happens at the level of consumption: the trends are very clear, some have been influenced and heavily accelerated by the institutional context induced by Covid, others were already clearly visible before. I am referring to a growing trend towards the personalisation of products but also of experiences, and the consumers’ willingness to make responsible purchasing and consumption choices; I am also referring to the growing need for information. Retail operators need to operate primarily in terms of mindset as far as marketing is concerned. This means adopting a customer- centric mentality, essentially placing the customer at the centre of the company’s strategy and operations. Customer centricity goes hand in hand with the idea of an omnichannel strategy. This basically means integrating physical and digital contact points in order to provide a shopping experience that is not only more functional but more enjoyable for a hyper- connected customer, and which integrates physical and digital channels in a quasi-natural way. The main example is Esselunga’s laEsse format, in which consumers can purchase goods online through the click and buy mode and collect their shopping from lockers. Physical shops maintain the unavoidable advantage of sensoriality: I can exploit all five senses in a physical shop, which is not something that online purchasing can absolutely guarantee. Omnichannel retail creates an enormous opportunity to obtain more data about consumers, understand them better, intercept and predict their needs and then engage with them more accurately through ad hoc marketing policies. Concrete examples of this include the automation of payment processes, so-called cashless payments, digital flyers, apps like YouFirst to manage queues, as well as features that provide a real-time picture of the product range. The meaning of these marketing policies should be to offer high-value services throughout the entire customer journey. We must also ask ourselves what the possible areas of evolution at the level of organisation are. One area is innovating formats: Covid has taught us the importance of proximity shops, of shops located in residential areas: I believe it will be an increasingly evident trend in the future. In terms of food and groceries, in particular, I would like to underline the blended models of Horeca (Hotel, Restaurant, Cafe) and retail, in the so-called hospitality-retail formula. Esselunga’s LaEsse is an example: consumers can collect their shopping purchased online, as well as drink a coffee or eat a meal at the restaurant. Another area is organisational porosity: porosity basically means openness – especially mental and cultural openness – to innovations that come from other sectors and other retail divisions, not only in terms of ideas but also of skills, data and capabilities to analyse the data. In general, there is a need to redefine the role of the retailer in the supply chain: today, we are serving consumers who have an increasingly strong need for product traceability, not only in food and groceries. It is important to team up with producers, wholesalers and distributors, elements which are positioned upstream in the supply chain, to satisfy this need. In this case, technology such as blockchain assists us, because it allows us to have updated, transparent and secure data in real time thanks to cryptography, ultimately enabling consumers to autonomously retrace the production and supply process of the products. I believe that three factors are fundamental: skills, data and technologies. When I talk about skills, I refer to the relational skills of customer base management as well as, and above all, to customer retention skills. Retention not only means retaining the current customers but also making them ambassadors, bearers of positive messages through word of mouth, which is an activity with very high added value. Among the scientific skills dealing with data, I cannot fail to mention data science. A data scientist transforms data into information through a process of collection, statistical and qualitative analysis and finally, interpretation. The results include clustering algorithms that make it possible to stratify the customer base into micro-segments characterised by socio-demographic differences and values. Finally, technologies: I have already talked about the usefulness of blockchain technology, and I believe that in the future, innovation will focus on in-store technology and on the universe of the Internet of Things to be used in shops.
Sami Kahale
Digital technology’s biggest impact on retail during the pandemic was certainly the acceleration of e-commerce. In Great Britain, before Covid, the e-commerce market was 6-7 percent, while today it has reached around 12-13 percent of the total market share. In Italy, the e-commerce market was around 1 percent with a growth of 40 percent every year, whereas during the emergency it went from 2 to 3 percent.
Matteo De Angelis
Traditional and digital commerce are not two parallel worlds; rather, they are interconnected. Younger generations in particular need immediacy and personalisation, but at the same time, they require physicality and sensoriality; they need to talk to someone in a shop. The model to follow envisages that customers can book a visit with a consultant online and then go to the physical shop, which still has an irreplaceable added value.
Sami Kahale
Innovation for a company is fundamental; it is the recipe that ensures longevity. It does not matter if it is external or internal, the important thing is that it is the right sort. We are developing internal skills to develop in-house innovation, but we have no problem with using external skills.
Matteo De Angelis Nowadays, it is essential to have a data-driven mindset. Whether an innovation is created entirely within a company, or if it is acquired from the outside, organisations need an internal figure who is able to interact with those who provide the data, to read and interpret them.
Sami Kahale
The figure of the data scientist is central, but must somehow be addressed through the correct business question, the right business opportunity. The skill lies in finding the data you really need and making them work in the overall organisation. Regarding cashless payments, before Covid, around 68-69 percent of our turnover at Esselunga was from electronic payments. During the emergency, in a span of four months, 69 percent rose to 78 percent. Little use is made of cash and we tend to favour electronic and contactless payments to improve the consumer’s shopping experience. In the future, this will be an increasingly omnichannel shopping experience. People have different needs during the day: we need to seize this opportunity and create the customer journey of the future, which will be both physical and virtual.
Matteo De Angelis
Shop managers must realise that the product is not limited to the object itself, but it is an opportunity to live an experience inside the shop by integrating digital technologies. The idea is that of performance marketing: understanding which are the most effective consumer communication and contact tools in terms of conversion and sales results. * Matteo De Angelis is Professor of Marketing at Luiss, where he teaches Marketing, Web Analytics & Marketing and Marketing Plan & Markstrat Simulation. He also teaches numerous marketing courses at the Luiss Business School. Sami Kahale is the CEO of Esselunga. He holds an MBA in Economics from Babson College and joined Esselunga after 33 years of experience with Procter & Gamble, with positions of increasing responsibility at a national and international level. THE CHALLENGES OF THE POST-PANDEMIC FUTURE 12. Artificial humanism: beyond digital intelligence? 28 april 2020 *
Jeffrey Schnapp
Pandemics are not so much incubators as they are accelerators of innovation; they act to intensify processes that are already emerging in our society, culture and economy. The phrase “artificial humanism” is a provocation that enables us to reflect on how cutting-edge technologies intervene in the handling of a crisis, like the one we are currently facing, and on the shape of society that awaits us beyond its limitations. I like the concept of “artificial humanism” because it invites us to go beyond the imaginary which has defined much of the past dialogue surrounding digital technologies. Human beings have always had a strong tendency to interpret metaphors anthropocentrically. For example, when we talk about artificial intelligence, we use the word “intelligence” as the equivalent of human intelligence, or when we discuss machine learning, we refer to the human concept of “learning”. I propose that we substitute these anthropocentric metaphors with a prosthetic imagery, according to which technologies expand the boundaries of our condition rather than supplant the role of human beings. I consider digital intelligence to be a sort of extension of human intelligence, and we need to reflect precisely on this process of extension, rather than replacement. Let us begin with what we mean by “artificial” in relation to artificial intelligence (AI). The term alludes to the concept of artifice in its cultural expression, rather than the “anti-natural”. According to this interpretation, “artificial” is associated with processes conveyed by an artifex or artist, by he/she who get their hands dirty; someone who imagines, passing from the act of imagination to the different stages of modelling and creating to validate a concept. We must remember that the notion of artificial intelligence is by no means a recent concept; it takes us back more than half a century, to 1956. After a torturous journey lasting decades and fraught with highs and lows, AI has finally begun to demonstrate its transformative potential to the extent that, today, there are some who dream (or fear) the advent of a transcendental AI, a sort of autonomous superintelligence often labelled as AGI or “Artificial General Intelligence”, which is able to think on its own. As an example of its many thousands of possible applications, an AGI could manage all the mobility systems of present and future metropolises. This fever is reaching new heights due to the recent arrival of GPT-3 AI. Believers consider that such a form of AI would not only allow each vehicle to navigate the labyrinthine complexity of our urban environments but would also be able to monitor a perceptual field that is capable of identifying and characterizing every object that is part of that landscape: a bench, a pedestrian positioned on a crossing, a dustbin, a cake, a cyclist, a traffic light, a market stall, etc., etc. It is not just a matter of perceiving and identifying this whole universe of objects, but of coordinating and interpreting it in real- time in an “intelligent” and dynamic way. But what has happened to this superintelligence that was prophesied more than a decade ago? Why have we failed to achieve an AI that is capable of managing complex phenomena such as urban mobility? We have been talking about Smart Cities for some time, so why is it that our cities remain more or less as they were at the beginning of the new millennium? Elon Musk predicted as early as 2017 that it would be possible to not only drive through a metropolis but cross the entire American continent by putting software behind the wheel, while General Motors promised to deliver the first self-driving cars (level 5) in 2019. Why are there an increasing number of abrupt halts in this supposed triumphal march towards the future? Is it a question of lack of funds? Certainly not; global investment in this field has exceeded 20 billion dollars. So why is it that AI has not delivered this reality to us? The reasons can be traced back to both its extraordinary potential and its extraordinary limitations: an observation that applies to the AI of the 1980s, as well as to GPT-3. One example immediately comes to mind. Cause and effect are at the foundation of almost all the reasoning processes that influence the production of new knowledge. Faced with similar problems, AI immediately finds itself in difficulty. Software brilliantly recognizes the patterns, emerging forms and complex phenomena that are visible beyond a human scale, but this software only knows the past (under the guise of the database with which they are “trained”), so they are excellent imitators but terrible improvisers. They have absolutely no savvy and find it hugely difficult to interpret the complex choreographies that connect the actors, objects, architectures and infrastructures that make up an urban environment in real-time, as they are never 100% predictable. Imagine a street in the suburbs lined with snowmen. They look like men but they are not men. What are they doing? What are their intentions? A 5-year-old can answer without hesitation: “A snowman has no intentions! It stands still, then it will slowly melt because that is just what snow does”. But for an AI that knows nothing about snow but recognises the contours of a humanoid body wearing a hat, a similar question becomes a challenging problem of interpretation. It is an issue that extends to many other problems that require immediate solutions when navigating a city. This time, what if there is a real pedestrian rather than a snowman on the edge of our footpath – a lady: is she going to cross the road or not? She has one foot on the asphalt, the other on the pavement; her gestures seem ambivalent; she is conveying subtle signs of impatience but also signs of uncertainty... This is a trivial dilemma, but one that risks turning into a question of life and death if the AI judges incorrectly; an act that requires both semiotic (i.e. formalizable) and cultural (much less formalizable) skills. Here are a few more examples. Above, I alluded to the lack of “savvy” demonstrated by an AI which is not aided by human knowledge. I was thinking of how easy it is to trick or confuse self- driving cars. For example, as part of a project, the artist James Bridle drew a circle of motorway lane lines around a self-driving car, paralyzing it in its vain attempts to move forward without violating traffic regulations. Several Carnegie Mellon PhD students upped the ante by transforming a car park into a sort of serpentine path, further paralysing the smart car’s brain.
Robotics is one of the sectors that suffers most from the consequences of this anthropocentric vision. It is a field in which robots often reflect humankind’s image in the mirror of history, or they represent slaves, adversaries, replicas or substitutes endowed with super-humanity. Just think of the case of the Sophia robot developed by Hanson Robotics. Hit by an explosion of media hype when Saudi Arabia granted her citizenship and designated her as innovationin 2017 as the “Innovation Champion for the Asia-Pacific region” by the UN Development Programme, Sophia is yet another descendant of the Mechanical Turks of the nineteenth century. She has far more in common with Disney’s audio-animatronics than with any other generalized model of artificial intelligence. Three years ago, I found myself on-stage next to Sophia at the United Nations, to contribute to a round table on the future of new technologies. I confess that I found the experience more embarrassing still, given the seriousness of the subject, its implications and the venerable setting. Sophia has transported neither the public nor the present into the “uncanny valley” where semi-human robots are supposed to transport us when the gap between thee human and the computational narrows. Sophia is a long way off from representing a future in which robotics will be intimately intertwined with everyday experiences: as a witty critic suggested, she is a mere chatbot with a rubber face.
True robotics has another face or, rather, no humanoid face. It is this real robotics that is transforming the nature of manufacturing, agriculture, mining, and even medical practices around the world; the type of robotics which enabled the development of new production methods, reconnecting personalization with mass production, for instance; the type of robotics which animated new forms of research on any nano- or giga-scale, and which saw the first successful introduction of consumer robots into ordinary people’s homes. I would say that “cobotics” is the type of robotics that matters more and more; it indicates autonomy in a collaborative way, as in the case of the GITA cargo robot, the first product designed by Piaggio Fast Forward. GITA does not replace people’s mobility; instead of contributing to our transformation into passengers, it supports that basic expression of human autonomy which is the act of walking. GITA expands and reinforces human mobility and, using the same technological tools as self-driving cars; it helps people to walk more, leveraging on human expertise as a navigator of complex routes such as those through large metropolises. I say this to demonstrate that GITA belongs to that prosthetic universe of intelligent and interconnected objects called the “Internet of Things” that broaden the range of human activities, instead of trying to replace them with mechanical-computer surrogates. In closing, I would like to move away from the sector strictly technological to that of culture. The topic of this Master Class anticipates the results of a project currently underway in the MetaLAB at Harvard, in which we are experimenting with the application of AI to the analysis, interpretation and curation of cultural collections. The title of the project in question is “A Flitting Atlas of the Human Gaze” and is part of a constellation of projects grouped under the collective title of “Curatorial A(i)gents” that demonstrate the creative and critical potential of an AI used as a collaborative and augmentative tool and not a substitute.
In this specific case, it is the collection of 250,000 artistic objects belonging to the collections of the Harvard Art Museum. In the case of this “flitting atlas”, the alpha version of which can be accessed via the URL https://metalabharvard.github.io/ars- flittingatlasofthegaze/, an AI analyzed and tagged every portrait of a human being that it found in the corpus, studying the orientation of the subject’s gaze and elaborating an overall mapping of the gazes according to the genre to which the object belongs (painting, photography, engraving, coin, etc.). Working with these data but “massaging them” (McLuhan would certainly have approved of this use of the metaphor), my team built an interface for the museum’s gallery where this project will be exhibited in February 2021. It will allow visitors to navigate thousands of objects without a joystick, clicker or mouse: simply by moving their gaze up or down, right or left. It is an operation that is hardly conceivable without AI tools because it takes us beyond the boundaries of our cognitive abilities. In fact, no pair of human eyes can study 5,000 (not to mention 250,000) works at a time; no art historian would dedicate their entire life to quantify the angle of the human subjects’ gaze in twenty thousand portraits. And it opens our eyes to aspects of visual culture that are perhaps less evident: just one such example is the strong tendency for frontal stances in snapshots which contrasts with the prevalence for profiles on coins or medals. I will briefly mention a second example from “Curatorial A(i)gents” before concluding: the “Sympoetic Systems” project by my collaborator, New York artist Philipp Schmidt, in which the changing climatic conditions surrounding the museum establish the succession of pictorial works that appear on a wall of screens based on the climatic analysis of these same works performed by an AI. Who determines the visitor’s experience? The atmospheric conditions? In part, yes. The reading of the works carried out by the AI? Also partly true. But the real deus ex machina is the artifex, the artist, the human agent who imposes his or her rules of the game and creates a dialogue between these actors. I repeat that technologies are extensions of ourselves; they are an instrument. McLuhan, in his Understanding Media. Extensions of Man was right.
Giovanni Lo Storto
Speaking of McLuhan, I am very struck by the way Schnapp defines the transition from incunabula to print and books, which took place with Gutenberg. McLuhan describes the passage from the magical world of sounds, of oral tradition, to the neutral communication of the visual world. We then overtook the age of books, which lasted from the 1400s to a few years ago, to precipitate into the age of visualisation. Nowadays, a 15-year-old boy does not read, rather he visualizes, and he does it much better than us. It is a new and different way of accessing information. The pandemic forces us to consider a pre-Covid and post-Covid world. It is not the first shock that we have experienced this millennium. In fact, it comes after the attack on the Twin Towers in 2001 and the great financial crisis of 2008, but perhaps it is stronger than the sum of the previous two because it has struck every continent; from an economic perspective, the pandemic has simultaneously attacked supply and demand. The digital world fits into this historical context in a very particular way. Before this shock, it was almost natural for us to see machine learning and the Internet of Things as something to fear. Nicholas Agar describes the risk of this perception very well, according to which machines, which are able to analyze a large amount of data and learn very quickly, can appear extremely risky. Such a perception derives from attributing agency to machines. This crisis allows us to understand that the tension that Nicholas Agar described probably has no reason to exist. Yuval Noah Harari was quite right when he wrote in his article, The World After Coronavirus, that it is necessary to choose between totalitarian surveillance and citizen empowerment, between national isolationism and global solidarity. Professor Maffettone, director of the Luiss Ethos Observatory, believes that the pandemic surprised us by revealing our impotence to an extent that had rarely happened before in human history. It happened when Copernicus revealed that perhaps we were revolving around something else, when Darwin explained that we could be descended from that strange animal we were very similar to, the monkey, or when Freud stated that impulses and drives respond much better than our rational arrogance. A spillover occurs when a virus leaps between species and, in this case, the spillover has had a much faster technological development than the slow pace of human evolution. There has been suffering caused by human beings’ inability to lengthen the pace like artificial intelligence, thus risking to lose the only possibility of true salvation, which Maffettone identifies as public ethics and the construction of cognitive and critical awareness. We have the opportunity to understand that machines are not actively working on getting the better of us, but are at our disposal to increase our ability to change the world for the good of humanity. Training paths are fundamental in all of this. The Minister for Higher Education has declared that the crisis will leave by the wayside about 20 percent of young people who do not choose to go to university. That is terrible. There are already three billion connected internet devices, according to current estimates, a number that is expected to double within three years. However, one and a half billion of these six billion devices will be in the hands of illiterate youths. It is a problem that goes beyond issues of digital intelligence and artificial humanism. It reminds me of Pico della Mirandola, who in his Oratio de hominis dignitate of 1486 spoke to us of the true human soft skill, free will, telling us that man can choose for himself whether to rise or become dehumanised. Pico della Mirandola, who laid the foundations of humanism and the current digital-humanism, died very young, possibly poisoned with arsenic, but he knew the Divine Comedy by heart. It is said that he could also recite it backwards! It seems extremely fascinating to me that the person who defined humanism was also capable of things worthy of artificial intelligence.
Jeffrey Schnapp
As McLuhan suggested, the means of communication are an extension that changes our mindset, also intervening on our evolution at a physiological level. According to McLuhan, each new technology reorganizes the human sensory system. This is valid for the transition from codes to printed books as well as for the technologies that are marking the contemporary era. The boundary between man and the supports that extend him is always dynamic. It is part of the game of self-preservation and self- change. We interact with technologies, playing with their boundaries, as in the cataloguing and curating projects to which I referred. AIs do not solve all museum curatorship problems; they do not propose solutions, but they do help us to innovate and alienate what has become normal or predictable for us. To put it another way, an AI can allow us to look at the world through the eyes of a fly, seeing it from another perspective, with a different sensory and cognitive apparatus. Therefore, it is not only convergences but also dislocations that broaden our knowledge of the world.
Giovanni Lo Storto
This revolution could mark a further step forward in redefining our boundaries. The keyword is flow, a flow in which training, preparation and competence play central roles. Harari argues that the challenge is not between humans and machines, but between humans and their relevance. Within the flow, the boundary stretches to the point of taking the appearance of a link. There must be no competition between man and machine, but rather collaboration for the creation of value. Alan Kay argues that “technology is anything that was invented after you were born. Everything else is just stuff”. Today we commonly use objects that were new technologies a few centuries ago. The pandemic has forced an acceleration. For example, in the past, many voices were raised to argue that digital technology should not be adopted at school because it made people lazy and slowed down their learning ability. This is like saying that, in order to prove that they are not lazy, people should not look at the time on their mobile phone but calculate it by planting a stick on the ground. Let us not forget that there was once a battle against calculators in the classroom, which slowed down the ability to count. In this terrible acceleration, even those parents who previously did not want digital technology in the classroom protested in order to guarantee their children’s access to digital learning. Regardless of the complexity of the topic, such as the digital divide that affects the poorest in Italy and in the world, the underlying theme is that technology should not be feared but used to support humanity. Jeffrey Schnapp argues that there is nothing better than a successful data visualization, or the feeling of working with data to obtain what you desire in the way a sculptor works with clay. We need to increase knowledge and awareness so that people can attribute the right value to data and artificial intelligence, and use technology as a support for human beings, overcoming any opposition.
Jeffrey Schnapp
The question is how to strike the right balance to avoid the apocalypse. Personally, I do not believe that there is or ever will be a true state of balance, which is evident when we consider the tension between humans and technology on environmental issues. Pico’s Renaissance humanism must be rethought in the light of human progress, from the industrialization of the nineteenth century to the present day, perhaps with a perspective that leads us to consider a post-human, non-anthropocentric humanism, however paradoxical it may seem. We must contextualise the word human in the current reality. Every balance is always a rebalancing. By its nature, it is temporary. And when we talk about balance, we generally talk about values to be imposed: implementing the extraordinary tools we have developed at the service of a vision, an ideal or a model of society. I gave the example of self-driving cars because I do not want to live in a city sacrificed to their worship. I would like to live in a city where you can cycle, walk and then take public transport. In the twentieth century, we in America followed a completely opposite model, sacrificing public spaces for the benefit of automobiles. The dynamic relationship between man and technology is always evolving and ends up as a battlefield where values and ideas collide. Digital technology is now part of our intelligence and our daily interactions. We must strive to ensure that the balance corresponds to our vision of a just and sustainable society, and perhaps also a cheerful and pleasant one.
Giovanni Lo Storto
The key to saving ourselves is to improve ourselves through the machine, maintaining our curiosity and our desire to ask questions. The other day I saw a video of a child, the grandson of a colleague, asking why the sun is yellow. Who would be able to answer this question? The only way to make progress is to continue to have childlike curiosity. A machine does not ask itself questions; it just applies its own algorithms, linking them together. Asking questions, on the other hand, nourishes creativity and stimulates the relationship between imagination and practice. A person who asks questions is able to innovate. More artificial intelligence can correspond to greater humanity. The two are undoubtedly connected. As Jeffrey Schnapp argues, networks allow us to avoid locking ourselves into a knowledge that is too vast and fragmented, exploiting instead connection networks as an added value.
Jeffrey Schnapp
Speaking specifically of data visualization and storytelling on a macro-scale and comparing them with the face-to-face and multisensory experience of a single object, we have to recognize that they are two profoundly different worlds but which could, however, become convergent and/or complementary. To bring them closer together, new narrative strategies must be invented that construct a bridge between 100,000 objects and just one, between the abstractness of data and the multisensory peculiarities of a physical object. For me the visualization of data is the most characteristic form of storytelling of our age; it has now consolidated its role as an integral part of our daily life. Nowadays, we all constantly carry around small supercomputers in our pockets, so both the data and the visualizations that infuse these data with meaning are always at hand. However, we have seen millions of examples of very banal data visualisations, which describe nothing or illustrate it badly; they are nothing more than techniques manipulated to promote a simplistic solution to a complex problem. A well-made visualisation, on the other hand, has its own magical dimension, just like a novel or other work with great cultural value. In-depth knowledge of the medium is necessary to reach such a degree of sophistication, a simultaneously creative and critical spirit, which will allow us to overcome the limits of the support. At the training level, it is essential to obtain the right models of excellence through experiences and tests. There is no need to have a computer read the Divine Comedy: there are other techniques more suitable for understanding it as a poetic object. The digital dimension, on the other hand, can be useful for simultaneously contextualising the history of 300 manuscripts by accessing the collections of medieval codices in libraries all over the world. Each tool must have its own field, and choosing the right tool will be increasingly important to obtain results that are not ephemeral and irrelevant. * Giovanni Lo Storto is the General Manager of Luiss, an independent director of doValue and Pirelli, and sits on the Board of Directors of the Internazionale and Formiche magazines. He is a Knight of the Order of Merit of the Italian Republic. Jeffrey Schnapp is Carl A. Pescosolido Professor of Romance Languages and Literatures and Comparative Literature at Harvard University. He is a designer and historian, as well as a leading figure in the field of digital humanities. 13. Emerging from the crisis with Open Innovation 30 april 2020 *
Henry Chesbrough
I would like to discuss the role that open innovation could play in the imminent recession. From a statistical point of view, the recession has not yet arrived, but it is already here in every other respect. That being said, there is still hope, as I will subsequently explain. A recession is defined as a period of two or more consecutive quarters in which a country’s gross domestic product decreases. GDP in the US fell by 4.8 percent in the first quarter of this year. Technically, it takes another four months of decline before we can speak of a recession. There are two things to bear in mind about the recession: firstly, it is a time of cost cuts, and the choice of where apply these cuts affects our ability to return to growth; secondly, periods of recession, painful as they may be, do not last indefinitely. The average duration is one or two years. Therefore, when considering cost-cutting, we must keep in mind the relaunch of markets. We must remain prepared for the recovery. Anyone making cuts in a company should follow the example of a gardener pruning a tree, taking care to give it the opportunity to grow back. Certain branches must be cut, some completely severed, but others must be left intact so that they can bloom again. Open innovation is a purposive flow of knowledge that goes beyond the boundaries of an organisation, from inside to outside and vice versa. The inside-out part of open innovation determines how to make cuts today to restart tomorrow. Not all of a company’s projects can reach the market during the recession. However, open innovation offers us options. The first is to avoid completely erasing an idea; instead, a previously internal project could be turned into a customer or supplier. Consider the example of Eli Lilly in the pharmaceutical sector: he chose, in the context of digital e-business, to create an external entity to pursue his project by becoming its customer. The project became a company called InnoCentive, which is still in business, and Eli Lilly continues to use InnoCentive’s services. The second example would be to take the initiatives that cannot be pursued further as they are less strategic and separate them. In the Netherlands, Philips has often done this with the semiconductor sector, and more recently in lighting, allowing the business to forge ahead without relying on its investments. The third example is to make intellectual property work harder. Siemens holds more than 80,000 patents but uses less than 10 percent of these. Therefore, 90 percent can be used in other ways. The fourth option is to reduce internal activities but grow the business’s ecosystem. Philips may serve as an example in this case too, thanks to its high-tech campus in Eindhoven. What began as a research and development facility is now a space that is open to more than 75 other companies. Thus, the physical infrastructure can be maintained independently of Philips, without placing it under any financial burden, while an ecosystem of companies thrives. Finally, the fifth possibility is to make ideas and projects publicly available. While they do not create a direct profit, ideas are kept alive, costs are reduced, other subjects are drawn to the environment and the competition is prevented from patenting the same ideas. In this case, we can take the example of the pharmaceutical company Merck, which created The Merck Gene Index to make public domain many of the markers of the human genome for which it hopes to find new treatments. How should we deal with employees instead? A recession often means that it is not possible to continue to employ everyone; still, there is a possibility that once it is over, these staff members will be required again. There are a number of factors for consideration: How long can the business survive? Who carries out an essential role? Whose role is optional? And who may be needed in the future? This is the reason why people must be managed in different ways, including dismissals, temporary leave and job-sharing, to make it easier for staff to return. The shared sacrifice model can also be applied, which involves lowering everyone’s wages. In the event of a recovery, this could be counterbalanced with bonuses or equity. To tackle the recession, the first thing we must do is prioritise the initiatives within a company. During this phase, it is not possible to continue all of the company’s projects, and it is futile to even try. Some must be blocked. There is, however, a third option. It involves leaving the doors open, sharing risks and benefits, or passing the costs on to others. Therefore, it is necessary to proactively discuss with top management, to understand how expenses can be cut without penalising the ability to return to growth. And we have to treat people well! We hope we may need them again soon. The city of Genoa recently celebrated the reconstruction of a bridge that collapsed two years ago, the construction of which cost 6 million euros per day. Now the bridge is open to pedestrians, cars and trucks. This reconstruction, carried out in record time, is an example of how Italy is able to recover using focus, commitment and innovation. Winter is approaching, but spring always follows winter.
Fabrizio Di Amato
In my talk, I would like to speak about Maire Tecnimont’s relationship with the pandemic: what we were doing before, what we are doing now and what we have planned for the future. Maire Tecnimont is a company listed on the Milan Stock Exchange, a leader in the sectors of engineering and the transformation of natural resources. We conduct our business all around the world, with over 50 subsidiaries in 45 countries, dealing with hydrocarbons, and petrochemicals in particular. We recently launched a new challenge, NextChem, to contribute to technologies for the energy transition and green chemistry. Last year we earned approximately 3.5 billion euros in revenues with a project portfolio of over 6 billion euros. We employ around ten thousand people. What were we doing before the Covid emergency? Five years ago, Maire Tecnimont decided to rethink its organisational model, encouraging the use of digital tools and working from home. For us, remote working does not just mean using the telephone or Microsoft Teams; rather, it means adopting tools to redefine industrial processes through the digitisation and remotisation of processes. Alongside the use of a digital platform, we reorganised the entire group, which involved workflow, space and corporate culture. Five years ago, some people considered us technology freaks, but now we are transforming change into growth thanks to our commitment. What are we doing during this emergency? We could not have imagined this crisis, but we were prepared for it. We have been able to guarantee business continuity thanks to our digital platforms. We transitioned 3,000 employees from working in an office to working from home in a single day; a few weeks later, in India, another 3,000 people did the same. To overcome the impossibility of travel, we then connected and completed the digitisation of sites located abroad. We are testing the virtualisation of all activities in the sector. As I already mentioned, it is not just about using Teams, but about modernising and living in the virtual world. Thus, we overcame the last shreds of doubt and opposition: it can be said that the crisis gave the final push for a general change of mindset. At this very moment, thousands of colleagues are working from home, interconnected and coordinated with the rest of the world. Today, for example, we organised a workshop on HSE (health, safety and the environment) involving all our offices in various parts of the world. This organisation will allow us to manage this emergency and simultaneously accelerate the energy transition, which is the real driving force behind post-Covid recovery. Europe has announced a major investment programme, a New Green Deal. Tens of billions of euros will be available to invest in infrastructure over the next twenty years. Deficit barriers have also been removed, so we will have more money available for investments. A prompt restart is needed to save the economy and bureaucracy is the main obstacle. We need to rethink the future with a down-to-earth approach; to do this, it is essential to keep an open mind and consider all possible strategies.
Henry Chesbrough
I consider innovation to be a field of study that naturally oscillates between theory and practice. Many of the practices implemented during the pandemic will continue to be utilised in the following period. We will not turn backwards. In the case of Maire Tecnimont, several of its pilot projects have now become fundamental business processes. Virtualisation and the creation of digital twins of key facilities enable us to experiment in the digital world before implementing changes in the real world. However, the digital models must be high-quality and extremely faithful to the originals. In the new context, we will probably see a new balance between traditional factors (offices, physical spaces, commuting) and innovative elements.
Fabrizio Di Amato
With the crisis, we were able to benefit from a smart working process launched in the company years ago. For example, if an Italian specialist needed to work on one of our projects in Russia, the Philippines, Malaysia or the United States, he or she could do so remotely thanks to the use of virtualisation. This process started with only a few locations, chosen as “pilots”; now it has become necessary to implement virtualisation everywhere. The pandemic accelerated the transformation, forcing us to be resilient and change our mindset again. The pandemic is an accelerator of change. There are barriers in all sectors of industry, including in the field of energy infrastructure in which we operate. The energy transition will deliver a historic transformation. We too consider it a question of breaking down barriers and resistances, to help implement technological solutions that are already available to tackle the central problem, namely to decarbonise traditional industrial processes. It is a gigantic challenge, and open innovation schemes could make all the difference when it comes to winning.
Henry Chesbrough
In normal times, a barrier to open innovation is the need to control everything from top to bottom. The crisis is awakening awareness and solidarity: everyone has understood the need for collaboration between organisations, and between the public and private sectors. For example, more than 60 companies are working on a possible vaccine, in collaboration with the academic sector, public healthcare, start-ups and large companies. Senior managers are also beginning to understand this and are letting their guard down. Even professors who never even considered streaming lessons changed their minds within a few days. If universities can change, everything can change! Open innovation can also involve the public sector, convincing its managers that not all resources must come from the state and that the mobilisation of social resources increases efficiency. The case of the bridge in Genoa is an important example, given the extraordinary powers assigned to those in charge of completing the project. In this way, bureaucracy can be streamlined, saving months or years. Among other things, the bridge was built with the use of digital sensors that are capable of monitoring its maintenance and wear, and signalling any issues. The infrastructure sector offers the public and private sectors excellent opportunities for collaborating.
Fabrizio Di Amato
Open innovation has no contraindications and our company is starting to see the benefits, observing how cooperation leads to an acceleration of technological innovation, thanks to the sharing of knowledge. We have launched a chair on open innovation with LUISS and we are convinced that we can grow further along this path. An increasing number of people are asking us to share our approach to open innovation. We increasingly want to be actors that contribute to generating an “ecosystem”, namely a common ground of exchange between companies, universities, the financial sphere and the world of “open” innovation.
Henry Chesbrough
I would like to emphasise the role of start-ups. Large companies such as Maire Tecnimont play an important role that is necessary to orchestrate complex ecosystems. However, start-ups also play a crucial role, and I am pleased that the National Innovation Fund, through Luiss and Francesca Bria, is promoting their development in Italy as well. Start-ups move fast and are able to conduct experiments rapidly, far more easily than large companies. Since they do not have the ability to connect different sectors, they naturally tend to seek allies. This is the reason why large companies should welcome them. Compared with a month ago, funds for start- ups have fallen significantly, making this kind of cooperation even more urgent. * Henry Chesbrough holds the Maire Tecnimont Chair in Open Innovation at Luiss. He is also Faculty Director of the Garwood Centre for Corporate Innovation at the Haas School of Business at UC Berkeley. He holds an MBS from Stanford University and a PhD from UC Berkeley. He is considered the intellectual father of “open innovation”. Fabrizio Di Amato is the Chairman and majority shareholder of the Maire Tecnimont Group, one of the world's leading engineering and plant contractors in oil & gas and petrochemicals. He holds a degree in Political Science from the Sapienza University of Rome and an honorary degree in Chemical Engineering from the Polytechnic University of Milan. 14. Cities and communities in the post-pandemic era 23 june 2020 *
Sheila Foster
We are still a long way from the post-pandemic era, yet we can already begin to think about what the cities of the future will be like. While I speak from a US perspective, many of these concepts can also be adapted to other contexts. Let us start by analysing the spread of Covid in relation to urbanisation. I believe that we must compare data from the pandemic with those concerning the other serious problem that came to the fore at the same time: racism. I teach in Washington but have lived in New York for many years. When looking at the spread of the pandemic on a map of the five boroughs, Manhattan, the Bronx, Queens, Brooklyn and Staten Island, we can see a kind of map of inequalities. According to data from the Furman Centre in New York, the further away from the city centre and Manhattan, the higher the numbers of people infected with the virus and its victims. There have been more cases of Covid and a greater number of deaths in areas where the population is made up less of whites and Asians, and more blacks and Hispanics. It is not just a question of poverty, considering that the homeownership rate is the same in areas with low and high rates of infection. A relevant factor is education: the fewer graduates, the more cases there are. This is because fewer people are living in those areas who can work from home; they found themselves forced to take the subway. In Manhattan, many people had the opportunity to leave the city by going to their holiday homes in states such as Vermont, New Hampshire or Pennsylvania. Alexandria Ocasio-Cortez has spoken of a “racial justice paradox” [black people who were most at risk of losing their jobs were also those who were asked to continue working during the emergency]. The groups threatened by the greatest uncertainties regarding food, work and home suffered the highest exposure to Covid, particularly in large cities. Only one in five black people and one in six Hispanics can work from home; the majority of these groups are front line workers, who deliver food, work in hospitals, etc. Living far from the centre due to high property prices, they were forced to take public transport. Rather than urban density, we must refer to the crowding of households. Blacks and Hispanics live in more crowded homes, occupied by multi-generational families. Blacks are also over- represented in US prisons, another overcrowded environment in which Covid has spread like wildfire. We must also consider comorbidities such as asthma, obesity and high blood pressure in these populations, insofar as they are connected to structural inequalities. The higher rates of Covid infections are also due to greater pollution. According to a public health study carried out by Harvard University during the pandemic, these areas feature a higher level of PM 2.5, the worst type of pollution. Past studies demonstrate a correlation between ethnicity and exposure to air pollution. I have worked in this sector for years, dealing with legal issues related to the environment and climate. It is hardly surprising that Brooklyn and the Bronx have been hit the hardest by Covid; there is more pollution in these boroughs and, therefore, asthma and other respiratory diseases are more prevalent. The same applies to obesity and high blood pressure. These communities lack green spaces and healthy food (they live in the so- called food desert). Certain factors are called the social determinants of health. We must take into account the spaces where people work, play, pray and eat in order to create healthy, inclusive, equitable and sustainable communities. We must ensure that there is no pollution, plentiful green spaces and playgrounds, as well as high-quality and affordable housing. It was the social determinants of health that marked the terrible fate of these communities. The death of George Floyd fits into this scenario, linking racism and the pandemic. The mayor of New York decided to establish new rules for social distancing at the height of the Covid crisis. However, when the police applied these regulations, the first 30 or 40 arrests were people of colour. It may also be argued that the virus does not discriminate; however, the consequences are predictable when it arrives in an unequal landscape that is characterised by racism and structural inequalities. Together with Christian Iaione, we are working on a project that seeks to find an answer to this problem by creating more common urban spaces. Nobel Prize-winning economist Elinor Ostrom has studied how communities are able to self-govern and manage common resources together. The construction of urban commons such as vegetable gardens, swimming pools or public parks can be of great help in countering racism and assisting recovery in a post- Covid world. We are trying to apply our co-city structure in places like Baton Rouge in Louisana, giving communities control of housing and co-managed homes, land trusts and limited equity housing cooperatives, up to shared infrastructure such as energy-intensive microgrids. It is precisely the communities that are most affected by Covid that need a separate user system that they can co-manage and that is within their reach. This includes wireless and broadband networks to help these communities overcome the great digital divide. When it comes to post-pandemic planning, I think urban commons are a great answer.
Francesca Bria
The crisis we are experiencing creates the opportunity to articulate a new direction for our society. Crises, whether they are wars or pandemics, can sometimes fuel the social imagination. Therefore, we need forward-thinking ideas and projects that have the potential to transform our economy and companies, projecting us into a digital, democratic and carbon-neutral future. This is the first economic crisis of the Anthropocene age. We have understood that there is a link between the pandemic, the climate crisis and biodiversity loss. This is a powerful plea to transform our cities in order to achieve climate neutrality. Cities will be the engine of change towards a green and ecological transition. The crisis has also exposed our fragility and vulnerability as a society. It has highlighted the social and economic differences between people: status, habitat and access to resources. Therefore, the most vulnerable communities are most affected by the pandemic crisis; they have less access to public healthcare services and social security.
The presence of a national healthcare system in Italy and Europe has, therefore, proved significant, as well as the fact that citizens are requesting long-term structural investments in education, research and health. We must ensure that the future does not bring further inequalities. This also means directing technological development to solving the most pressing social and environmental issues of our times, starting with the climate emergency, the energy transition, education and public health. But how can we harmonise governance at city, regional, national and pan-European level? Communities and citizens must be entrusted with certain powers, while other decisions should be made at a national or European level instead. In Europe, for example, we need a pan-European investment system that coordinates the measures needed to tackle the crisis, at the health, economic and social levels. We need to focus on three points to find a solution that begins with our cities and citizens. Firstly, we must use innovation to achieve both social and environmental sustainability: i.e. the green and ecological transition, the circular economy, and moving towards zero-emission cities that are more liveable and, therefore, more sustainable. The second point is the democratic participation of citizens: not only smart cities but smart citizens, to involve citizens in political decisions. And finally, the democracy of data: once we have identified these priorities and how to use new digital technologies such as connectivity, sensors, data and platforms, these help us to improve urban planning if governed democratically. First of all, cities will have to become places where we can experiment with new measures in order to put the ecological and energy transition into practice. Until the end of last year, I worked as a Councillor for Innovation for the city of Barcelona, which is transforming itself into a green, digital and inclusive city. With regards to the green transition, the largest project we carried out is called Superillas (Superblocks). These are entire city neighbourhoods that are closed off to traffic, reclaiming 60% of public spaces that have been transformed into green spaces that reduce heat and absorb Co2. Cycling paths have tripled and the entire municipal fleet is electric. Barcelona has 700 square kilometres of public fibre optics coverage which underpins a network of sensors for the Internet of Things. These sensors collect real-time information about the city to efficiently manage flows, such as separate waste collection, water management, mobility and energy, handling these data as a veritable public infrastructure. Regarding the energy transition, we have created a new municipal enterprise for the production of solar energy that services all public buildings. Through a crowdfunding platform, citizens have received tax incentives to participate in the production of clean energy by installing solar panels in their homes. The second point illustrates why citizens’ participation is necessary for all this to be possible. Civil society must participate in the decision-making process to the fullest extent possible so that it can operate in a disruptive way. In Barcelona, we began by involving citizens in one of the largest democratic participation experiments in the world: 4,000,000 citizens participated in defining the city’s policies. Citizens directly contributed 70% of the proposals that became government action, also by using the decidim.org digital platform. The goal was to form a relationship between the government and its citizens and, as Sheila said, we can empower the communities most affected by structural inequalities, making sure to address territorial, socioeconomic and gender gaps. The third aspect to consider is the use of data and the relationship between technology and democracy. This period has seen much discussion about the future of the digital society and we are faced with two models. The first is the Chinese Big State model, whereby power and surveillance are centralised within the state. The second model is that of Silicon Valley’s Big Tech, in which the major technology companies dominate, the so-called GAFAM (the acronym refers to Google, Amazon, Facebook, Apple and Microsoft). The pandemic seems to have given these companies a strong boost, reiterating the importance of digital infrastructures on which essential social services such as work, education and healthcare depend. However, we need to find a third way, shaking off a mindset that only conceives a binary choice between state and companies. It is what I call Big Democracy: using technologies for the public good, and fostering the democratisation of data and citizen participation in a bottom-up model like the one we are testing in cities. This model has now spread globally, also thanks to the UN (for which I am an advisor on smart city projects), which has welcomed these ideas through the UN-Habitat programme, “people-focused smart cities”, which I helped to formulate. When I was in Barcelona, I also founded the Cities Coalition for Digital Rights, together with the cities of New York and Amsterdam. There are currently over 100 cities participating around the world. During the Covid emergency, we saw the importance of social innovation and technology as a common good, from the networks of FabLabs that supplied respirators and other equipment to hospitals, to the use of contact tracing apps to track and contain the virus, up to the sharing of data between researchers to study the virus and collaborate in the development of a vaccine. We are producing an enormous amount of data, which are essential for studying complex phenomena, making decisions and improving public services. Furthermore, Europe is proving to be at the forefront by proposing an approach to technology and data that defends the right to privacy and the protection of citizens’ data, combining the fundamental rights of citizens with the protection of public health. The digital transformation that I envisage will allow us to combine sustainable digitalisation with the ecological transition and make the 2015 Paris Agreement on climate change a reality. In this sense, cities absolutely need to equip themselves with a digital infrastructure that collects public data on electricity and heat consumption, mobility, water management, pollution, etc. These data, as we have done in the Barcelona project, could be considered as a common good, controlled by citizens and used to improve the city and spark innovation while fully respecting the privacy, security and digital sovereignty of its citizens. We also clearly need to proclaim new rights in the digital age. For example, the right to connectivity, which obliges us to consider broadband as a public, neutral and universal infrastructure, together with the right to disconnect, for example in the case of smart working. We must associate new rights and new models of organisation and innovation starting from the needs of people.
Sheila Foster
I would like to add three points. Firstly, we need to rethink the way we live and work, with coworking communities, land trusts and social control of housing, beginning in our cities. A land trust separates ownership and use, fostering the affordability of land and homes. Land prices have reached unprecedented heights in cities. One way to get around this problem is to set up land trusts, which offer long-term land leasing that enable the creation of co-management collectives. The use of roads will also have to be rethought: for example, social distancing encourages us not to reserve roads only for cars but to make them truly public. Secondly, it is important to reiterate that the government must continue to play a key role, albeit in the presence of a stratified self- management structure. The commons structure must push the state to provide resources and aid to communities according to their needs. Not all communities are the same; some may need larger homes and more outdoor spaces and those that will need supplies of fresh and healthy food. Local governments will have to learn to listen to communities. Thirdly, as Francesca Bria said, we must underline the importance of some public goods that are now entrusted to the private sector, such as broadband connections. In various communities affected by Covid, one in three homes did not have access to a high-speed internet connection, even in a smart city like New York. When we see adolescents standing outside libraries or Starbucks to access a wireless connection, we can understand how important it is to reconsider connectivity as a right. Overall, the pandemic is an opportunity to reset everything and find a new path because nobody should have to go without these assets. There is also the issue of distrust, not so much directed towards other communities but towards a government that has created disadvantaged and segregated communities; it has stopped investing in them and does not keep its promises. The pandemic could also be an opportunity to take action, for example, with participatory experiments such as those in New York. Here, individual neighbourhoods were allowed to contribute to the decision-making process with regards to spending public money.
Francesca Bria I agree that we can take advantage of this crisis for giving a direction that looks towards a better future and for rebuilding trust in public institutions, while at the same time giving more power to communities. The government will be tasked with solving systemic problems, conflicts and contradictions, shining a light on structural inequalities and proposing a vision of innovation that improves working conditions, citizens’ rights and urban services. It will be very important to reorganise urban life and promote sustainable and democratic innovation that does not increase social inequalities. Speaking of inequalities, we cannot fail to mention the need to drastically reduce the gender gap in the technology sector. First of all, with regards to education, we should foster the presence of women in STEM subjects at all levels of training. Women must play a central role when it comes to the future. The condition of women in Italy is still marked by great discrimination. We are last in Europe for women’s access to the labour market. The difference between male and female employment is one of the highest in Europe. There is a lot to do, but I am optimistic. Having courage means tackling the root causes of problems and, to do so, we need a new green and digital social pact. This will undoubtedly require significant public investments and the joint commitment of private individuals who must pursue innovation and sustainability.
Sheila Foster
Without a doubt, the public and private spheres are distinct but inseparable. So what can the public sector do to resolve these contradictions? Let us consider street protests, for example. New practices have been adopted at the federal, state and local levels, such as banning policemen from restraining suspects by strangling them, as well as allocating part of the New York police budget to invest in communities. At the national level, a “racial justice act” is needed to make lynching a crime and we must attempt to resolve the structural inequalities that affect some communities. Recent protests were not just about the case of George Floyd. Think about what happened in the 1940s, when entire communities were “redlined”, ostracised by a number of government agencies and unable to access certain loans. Nowadays, practices like these are prohibited, but we can observe that these communities most affected by the Covid crisis are precisely the same. Evidently, some inequalities are inherent in the system, which is precisely what we must work on. Withdrawing funds from the police does not mean waging war but using them for truly effective measures. The private sector must also begin to deliver on promises and declarations of intent regarding racial justice and the provision of competitively priced housing. It is also necessary to aggregate public communities and private partnerships, aiming to solve problems, such as access to fundamental resources for those who live in cities. * Francesca Bria is President of the National Innovation Fund and Senior Advisor to the United Nations on the subject of Cities and Digital Rights. She previously held the position of CTO for the city of Barcelona. She is also Visiting Professor at University College London (UCL). Sheila Foster is Scott K. Ginsburg Professor of Urban Law and Policy at Georgetown University. She previously taught at Fordham University, where she co-directed the Fordham Urban Law Center and was a founding member of the Fordham University Urban Consortium. 15. After Covid-19 26 may 2020 , *
Paola Severino
The Covid emergency obliges us to question what fate has in store for us and try to imagine a different future. This type of situation causes enormous difficulties, but it also manages to give us the impetus to develop the economy in an innovative way and to change society. This is evident in the new measures based on an agreement of trust between the government and citizens. I am not only referring to Italy but also Germany where, for example, the state guarantees loans based on self-certifications. This is a radical innovation for the legal and economic system, which has been generated by this emergency and also adopted in Italy for loans guaranteed by the SACE (Italian Export Credit Agency) and the CDP (Italian Loan and Deposit Fund). Evidence is given also by the Universities through their ability to easily transition to online education and seminars. The excellent results achieved show how it is possible to combine traditional and innovative teaching methods. The digitalization process in Italy has undergone a notable acceleration, in general, reaching new groups of citizens, from the youngest to the oldest, and teachers of all school levels.
Helga Nowotny
In recent months, we all have had to deal with the unknown, wondering what the future may hold for us. The lockdown has brought about not only despair, but an explosion of energy and many places with innovative activities have grown in a flash. It is our task to figure out what to do with them. I want to refer to the book The Great Transformation , written by Karl Polanyi in 1944. Polanyi takes us back to the time when the concept of the modern market was born, when people’s mentality changed at an equal pace with the development of the market economy, notably giving rise to a great transformation. We find ourselves in yet another transformation. We are also currently witnessing a computational revolution. It was not planned and not intended but this revolution has pushed us into the digital world. The pandemic should not have taken us by surprise, yet we were still unprepared. That being said, we learned very quickly what needed to be done. Science stepped in and immediately sequenced the genome of the virus and detects its ongoing mutations. Approximately 90 companies around the world are currently researching a vaccine. The public has been able to see science at work. Science does not amount only to a finished product, well received by society; it is a process that is constantly pushing itself into the unknown. We have learned that new knowledge can be produced in a short time, but need to remember that knowledge is always temporary because new discoveries can arrive from one day to the next. The relationship with politics has also changed: politicians have had to learn to listen to the voice of science and, at least during this period, the trust that had been undermined by populist movements has returned. This period has reaffirmed the importance of data, and we must make sure not forget it. Data are indispensible for the process of digitisation. We will see data, their importance and especially their quality, with greater awareness after the end of the crisis. A series of initiatives has already been implemented which will supply us with additional data that will be useful in the future: how people coped with the crisis; ,the shift of work from office to home and its impact on women; the impact of home schooling on children, etc. For this purpose, a social science research platform called The World Pandemic Researcher Network has been set up. It is important to check the quality and provenance when it comes to data, building a map that allows us to orient ourselves towards a digitised future. In this context it is crucial to consider the relationship between research and innovation, between the uncertainty of data and the predictions that are possible with algorithms. Research is inherently uncertain. Those who already know the results are not conducting research, instead, they are applying pre-existing knowledge. Innovation is also an uncertain process, the outcome never to be taken for granted. All managers I ever spokn to were aware that man yof their decisions are decisions under uncertainty. Therefore, they prefer to work on a data range and not on a data point. Returning to the matter of predictive analytics and algorithms, we find ourselves in a relatively new situation. Artificial intelligence and computers date back to the last century; think of of the seminal work of John von Neumann and Alan Turing. However, we are currently witnessing the convergence of unprecedented computer power, sophisticated predictive algorithms based on MachineLearning and DeepLearning and a huge amount of data, to which we voluntarily contribute. Every time we call someone, make purchases with a credit card, or look at our fitness band, we leave traces that feed algorithms. These algorithms do not distinguish cause and effect, nor do they handle anything; they simply extrapolate our behaviour and project it onto our future purchases, which restaurants we will choose, which people we are likely to meet etc. Such a convergence is both very powerful and risky because it opens the door to abuse, fake news and other misuses of our data. It is also risky when we believe that algorithms actually‚ know’ the future, as their predictions may turn into self-fulfilling prophecies. We are in the midst of a very profound transformation process that unfolds through the evolutionary trajectory of machines created by humans and interacting with humans. There are two types of innovation: radical and incremental. The computational revolution is undoubtedly a radical type of innovation. However, it must be reiterated that innovation does not follow a linear model, which leads from basic research to applied and then to the market. Instead, we need to think of innovation in terms of an ecosystem. There are various ecosystems, such as those of business, universities and the healthcare system. Digitisation offers the potential to reach everyone, but pushes us even more forcefully to confront the persistence of a digital divide. We have to ensure that every child can learn on a digital platform and be ready, when growing up to face a world of work that will be very different. Given the complexity of such ecosystems, we must learn to further explore and practice inter- and even transdisciplinarity. It goes beyond academic disciplines, as various models of interaction between universities and business show. Take, for example, the MIT Media Lab: it enables companies, upon paying a small fee, to gain direct access to those who conduct research in the making. In the informal context of the Media Lab, a company may happen to find something of interest to them in a researcher's work, subsequently they may ask the researcher to explore it further together with the company. Another possible model involves companies to be contacted by researchers who offer a different approach from those who are already working within the sector. Direct interaction is key. The government of Singapore invites companies to be directly located on university campuses, again with the aim of making it easier to interact with research.
Luigi Gubitosi
Technology has played a key role during these months in the midst of the health emergency, as it did in 1918 during the so-called “Spanish flu” epidemic. An advertisement from that time for the Bell Telephone Company of Missouri stated: “You are never alone with a Bell telephone”. This was back when the telephone was the only way to maintain contact with the outside world. Of course, there were limitations: another advertisement for the New York Telephone Co. called for the telephone not to be used except in an emergency, due to the small number of operators. Nowadays, fortunately, technology not only allows us to make phone calls freely but also make video calls; people can talk to and see each other simultaneously through the screens of a smartphone. Italy has always been one step behind in terms of digitisation for several reasons. However, the last few months have forced us to take a big leap forward, a bit like when a safety car in Grand Prix limits the speed of all the cars, enabling those who had fallen behind to catch up with others. As a country, we must make sure we take advantage of this moment and follow up on the leap forward we have been called upon to make by extensively spreading digitisation through the development of both tangible (networks) and intangible (knowledge and skills) infrastructures. These are both necessary in order for Italy to turn into a completely digital country. Uncertainty is always around the corner and the exception seems to have become the rule. Everything goes faster: in the past, the plague took years to get from Asia to Europe, whereas now a plane ticket is enough to spread an epidemic. So we cannot afford not to simply keep up with events; on the contrary, we must try to anticipate them. In this sense, the pandemic has shown us the power of data, and the time has come to understand how to allow their use which, thanks to artificial intelligence and data analytics tools, can make them a strategic tool. This applies not only to management but, above all, the prediction/prevention of major phenomena, always having the privacy of the people who supply the data as a reference point. It is important that this is discussed; the GDPR (General Data Protection Regulation) has been a huge improvement, at least at the European level. However, it is necessary to understand the areas and methods of application in various cases, for instance, when it comes to a foreign website which is accessed from a European country. Laws must take into account what is happening. Ethical issues are another very important matter to take into consideration, such as that relating to the right to be forgotten: how long is it lawful for someone to keep our data? Technology, therefore, helps us, has always helped us and will continue to do so in the future. We must be quick to seize the opportunities while considering all aspects: technical, ethical and legal.
Helga Nowotny
During the pandemic, in Austria we could observe the presentation of various data sets on TV every night, which undoubtedly had an impact on public opinion. There was also discussion about the possibility of a voluntary or mandatory tracking app. It is important to involve citizens on such issues, to avoid creating a climate of fear that is counterproductive to any innovation, even if regulation is needed to keep up with the societal impact of technology. The theme of inter- and transdisciplinarity is back: politics, science and law must learn to collaborate in order for this to happen. Once adequate laws have been drawn up, it will be necessary to win the trust of citizens. Otherwise, we risk repeating the events surrounding the regulations on genetically modified organisms, which signified a great defeat for Europe, marked by chatter that led to nothing.
Luigi Gubitosi
The pandemic has led first at all to a qualitative leap in terms of partnerships. The most important example has been that of Apple and Google, which agreed to use the same standard, despite their historic rivalry between Android and iOS operating systems, an event that was perhaps only made possible by an extraordinary situation like the one that we are facing. But how can data be used to predict the future? In order to prevent certain phenomena in time, we must not neglect the “weak signals”, as they are called in technical jargon. We have the necessary tools to make appropriate use of data thanks to which, for example, regional systems can be coordinated. More generally, all of those measures that are needed to demonstrate that we have learned our lesson can be put in place.
Helga Nowotny
Cooperation between those working in computer science and social sciences, as well as humanities, will be decisive. People must learn to talk and listen to each other: this requires a shared mindset that leads to concerted approaches. For example, real-time data on remaining food stocks may prove necessary; this would require the collaboration of companies in real time, just as it happens when monitoring traffic. We need to create a general climate that makes communication and cooperation shared experiences.
Luigi Gubitosi
The barriers between disciplines seem to be collapsing. We need more STEM, information science and statistics graduates. TIM, for example, is constantly looking to recruit data scientists. At the same time, legal and political science studies must increasingly be transformed in order to take into account the developments and the pervasiveness of issues related to technology and innovation. There will be an increasing need for lawyers who are also computer science experts, as well as programmers who are competent in the field of law. Overall, universities must take up the challenge of a world that is changing, following the example of institutions like Luiss, which offers cybersecurity courses. * Luigi Gubitosi is Chief Executive Officer and General Manager of TIM and member of the Sustainability and Strategies Committee. He is Vice Chairman for Digital of Confindustria and member of the General Council of Unindustria. He was also CEO of Wind, Country Manager and Head of Corporate and Investment Banking of Bank of America Merrill Lynch Italy and General Manager of RAI. Helga Nowotny is Former President and founding member of the ERC and Professor Emerita of Science and Technology Studies at ETH Zurich. Paola Severino is Vice President of Luiss, where she is Professor of Criminal Law and a former Rector. She was Minister of Justice during the Mario Monti government. 16. The new normal after Covid-19 23 april 2020 *
Paola Severino
The deep wound inflicted on the country’s social fabric by the pandemic, the critical issues that have emerged within the healthcare system and the serious economic consequences forecast for the immediate future, which will burden the post-pandemic “new normal” situation, cannot be healed without wide-ranging and long- lasting planning. The data, in fact, are merciless and mark a common trend in every European and worldwide economy: enormous efforts will be needed to restore growth, protect businesses and families from the difficulties they must face and prevent the onset of social tensions, conflicts and increasing inequalities. Enterprises will be called upon to promote innovation, support institutions on issues such as welfare and collaborate with schools and universities on training initiatives, so as to implement a virtuous circle in which education is assigned a strategic role for the improvement of competitiveness and processes of both companies and the Public Administration. It will be equally important to guarantee generational change, with due protection for those who retire, and adequate specialized training for young people to prepare them for digital planning and the creation of dialectical interactions between the public and private spheres. This foundation is the only way to enable a regeneration of the economy and the public administration, leading to a concrete opportunity for change offered by the lessons of the health crisis. Part of this change will be made possible by the European Next Generation EU programme. This will unlock important potential while also providing a testing ground for the State’s management and planning skills. The latter will also be enhanced through joint public and private management training programmes. Sharing and collaboration represent the starting point and the key to the success of any recovery plan. Therefore, the opportunity presented to us is, above all, a challenge that the country must face, by channelling the energies and contributions of all social actors towards a concerted response. It has repeatedly been said that Italy’s “new normal” and “re start” must represent a break with the past. To reset the country, we must rethink the institutional aspects that have revealed critical issues and problematic inefficiencies during the crisis, such as bureaucracy or state-region relations. I would argue that the expression “integrated planning” can accurately render the concept. Ceding to improvization or the temptation to prioritize one of the interests at stake to the detriment of the others – health, freedom, work – would be an irreversible mistake. As far as the state administration is concerned, it is necessary to speed up public administration procedures and foster streamlined processes, based on the German model, featuring a simplified authorization phase but with very strict application of any sanctions. The emergency has, in fact, highlighted the disproportionate number of formal rules, to the detriment of the efficiency and transparency of public bodies (which, in turn, hesitate to make decisions because they are concerned by particularly alarming formalistic legal interpretations). This has been a long-standing problem for our country. On the other hand, from an economic perspective, rapid injections of liquidity are necessary in favour of companies, SMEs in particular. A delayed intervention would allow criminals to take advantage of the difficulties in the sector by loan-sharking or even by investing in and acquiring ownership of businesses at discount prices. To prevent this from happening, it is necessary to establish a legislation that integrates the framework of State-guaranteed loans, simplifying the credit distribution phase and intensifying verifications on its use. Italy’s battle against organized crime has provided us with one of the most comprehensive legislations to prevent the use of dirty money, identify instances of money laundering and hit back against examples of economic pollution. Nevertheless, we must continue to be vigilant and remember that criminality works much faster than the public system because it has immense and immediate liquidity deriving from its illegal activities. Those who now find themselves isolated and in financial difficulties can easily become prey to criminal organizations ready to provide money and food to make converts. The resources demonstrated by Italy during the lockdown must be systematized and become an integral part of the “new normal”. The emergency forced us to deal with pressing issues, which also brought us closer in terms of national unity and identity: combatting the epidemic, the sacrifices of doctors and nurses, the tragedy of falling ill and dying far from loved ones, the partial deprivation of liberty, the problem of social inequalities and the protection of the weakest classes. Now we can build a world that is more attentive to the needs of individuals and families, more focused on environmental and social sustainability, more oriented towards solidarity and more willing to exploit the great opportunities afforded by digital technology.
Aldo Bisio
The pandemic has brought us face-to-face with a series of difficult, painful events, as well as with an immediate and unexpected change in our habits and social relationships, at work and in many other aspects of everyday life. The weeks of lockdown, however, not only transformed people’s daily lives. There was an equally significant impact on the country’s infrastructure. Take the case of the telecommunications sector. In the space of about two weeks, Vodafone recorded an increase in data traffic on its networks with fixed and mobile data consumption risign 60% and 30% respectively. From this point of view, it was like leaping forward a year (in fact, the growth trend in telecommunications is constant with traffic increasing at an annual rate of 50-60%). What happened during the lockdown put the system under a huge amount of stress. Despite this, the system proved resilient, guaranteeing continuity of service and enabling many people to stay daily contact with their loved ones, friends, relatives and colleagues. The social fabric, which would undoubtedly have weakened otherwise, was held together. The speed of technological progress has certainly helped us. If we had experienced this situation a few years ago, before the 4G network had been rolled out, this type of response would not have been possible. However, this network’ resilience must not distract us from a necessary reflection on the transformation of the sector. It is also true that, in the medium term, the 4G network will not be able to handle the growing volume of traffic. Although the diffusion of devices that support 5G technology is currently limited, it will soon become clear that this is the only solution available to countries in order to manage change and adapt to the new reality imposed by developments in digital technology and the demand for more wide- ranging data. Conversely, rejecting the progress of information technology means denying access to new modernity and missing out on opportunities for development and growth that are essential for a country that seeks to remain on the cutting edge. This will be a central aspect of what is now called the “new normal”, namely how we will live our daily lives once the current emergency is over. One thing that I believe is certain, however, is that the so-called “restart” will only incorporate some of the changes that took place during the pandemic. This would be a virtuous process that – as a society – would see us take the good from the challenges we have faced, thus transforming difficulties into lessons learned. We did precisely this during the lockdown, modifying our behaviour and adapting to digital processes, thus releasing their potential. I see three main vectors: the first is that we will definitely move fewer and fewer atoms and more and more bits. Remote working, for example, was practically unheard of in Italy before the emergency. Yet it has now overwhelmingly forced its way into the workplace – as well as into the family and into domestic and personal spheres. It is conceivable that in the coming months and beyond, the health emergency will have a widespread across-the-board impact affecting private individuals, public administrations and businesses. This transformation of our habits into the “new normal” will require a qualitative and quantitative increase in networks. Network resilience and the cloud will become increasingly important. The second theme is that of the transition from “digital first” to “digital only”, or at least “digital by default”. All processes, services and the most common activities will move to the digital realm, in an extended and rapid process that will involve all sectors and not just telecommunications.
The third element is automation, which will be needed to create more resilient processes. For a company like Vodafone, with about six thousand employees plus ten thousand other people who work for us on a permanent basis, this transformation poses a huge issue: that of skills. It is pushing us to review the upskilling and reskilling plans that we already had in place, multiplying them tenfold. If we extrapolate this figure and project it onto the entire country, we arrive at ten million people; professionals and workers that Italy must help to achieve another level of digital literacy. Italy is in fourth last place in the Desi index (Digital Economy and Society Index), ahead only of Romania, Greece and Bulgaria in terms of digitalisation of its economy and society. While the crisis will increase the role and spread of digital technology, it is also true that the risk of Italy falling behind when it comes to training its young people and its workforce is real. In order to avoid this, institutions must be involved: companies, SMEs and the public administration, in particular, will not be able to take care of upgrading these skills alone; it will be necessary to formulate a national reskilling and upskilling plan. Such a plan would also have positive social effects, insofar as digital literacy will also protect against growing inequalities. Universities could also rethink their role in civil society, not limiting themselves to leading eighteen-year-olds to become worthwhile graduates, but also carrying out in-depth and extensive studies of the cycles of cognitive and professional obsolescence. Like all crises, the pandemic also brings with it an opportunity: allocation of the Next Generation EU funds already mentioned by Paola Severino will offer Italy a unique historical opportunity – perhaps even greater than the Marshall Plan – to redesign an improved development model and thus remake a more modern and equitable country. It will be up to us to give tangible form to a path that will see us take on a leading role at both European and global level.
Paola Severino
Echoing what Aldo Bisio rightly pointed out regarding the centrality of digital technology, I would like to add that it is important to pay specific attention to the phenomenon of hacking as the network grows. The widespread use of new technologies and the circulation of enormous volumes of data expose us to the potentially criminal attentions of a market that is greedy for precious information about our identities. It is clear that companies, banks and the world of finance must collaborate with the authorities to report any attacks received or possible threats. In order to do so, they must overcome an understandable reluctance resulting from the fear of damaging one’s reputation due to the revelation of having suffered a computer system attack – although the benefits of a timely report outweigh the losses.
Aldo Bisio
There is no doubt that in order to ensure a complete and secure digital experience, we need to pay close attention to the central issues in the digitalisation process, such as privacy and security. Calls for simplification, transparency and clear public and private management strategies, as previously mentioned by Paola Severino, are equally important, as is the need to focus on the customer experience. Digital technology is exceptional, but it always arouses concerns or suspicion in people. In Italy, in particular, it is difficult to provide a positive narrative. On the contrary, civil society must find an effective way to defend 5G from fake news, which alters the public’s perception. Appropriate information and clarity are also needed on this subject: far from being harmful to health, the frequencies that 5G uses are not dissimilar to 4G frequencies. 5G would be implemented in compliance with the restrictions imposed by Italian law, which are even more stringent than those provided for under European laws, which are already considered safe. Furthermore, 5G would include areas of application that could lead to exceptional improvements. Examples include road traffic management with autonomous driving systems, the possibility of carrying out remote surgical operations and health checks and the transformation of our cities into “smart cities” in order to simplify and improve the lives of citizens.
Paola Severino Serious and reliable information channels are vital to a modern country. For this reason, I believe that educating young people is of primary importance. Schools and universities have the arduous task of educating the new generations in order to create an informed and conscious society that is also capable of transmitting its culture to the rest of the population. Training is essential for the development of the country: a good model of private entrepreneurship requires, for example, an adequate level of dialogue with public institutions capable of understanding and assessing needs.
Aldo Bisio
Investment is another central issue that has rightly been addressed by Paola Severino. During the lockdown, Vodafone deployed substantial resources to ensure network’ stability; we spent what was initially meant to be our annual budget in just a few months. The pandemic highlighted how important it is for a country to have modern infrastructure. For our part, it has heightened our sense of social responsibility as we have come to understand the essential role our work plays in holding society together.
Paola Severino
I completely agree with Aldo Bisio when he recalls the need for a structural investment plan capable of redesigning the future of Italy. I also agree with his consideration of educational and human values as pivotal for recovery, which requires a reskilling and upskilling plan. We will have to be able to train and choose men and women capable of transforming these opportunities into stable realities, without forgetting what occurred and the underlying fragility of our previous economic and social security. * Aldo Bisio is the CEO of Vodafone Italy. He was previously Group Managing Director and Group CEO of Ariston Thermo Group, as well as General Manager and member of the Board of Directors of RCS Quotidiani. He also has extensive experience in the strategic consulting sector, with a focus on the telecommunications and media industry. Paola Severino is Vice President of Luiss, where she is Professor of Criminal Law and a former Rector. She was Minister of Justice during the Mario Monti government.