Economy - published on 04 May 2023

Since the 2008 financial crisis, Europe and even more so Italy have suffered the greatest difficulties in at least half a century due to the occurrence of countless negative events, mostly due to causes external to our territories and passed on to us as a result of globalisation, while we have obtained very few opportunities from the latter, except for a few cheap imports and an expansion (which is, moreover, deserved) of exports. This situation has led to an insignificant growth of the economy until about two years ago, interspersed with several periods of recession and still not fully reaching pre-crisis levels: all this accompanied by countless economic, social and environmental difficulties.

With the advent of the last three shocks (pandemic; increases in energy and raw materials with consequent inflation and rising interest rates; war in Ukraine) paradoxically, things are changing. Everyone (from the political classes to the ruling classes, from workers to citizens in general) has begun to change their attitude, i.e. to react to adversity with a proactive and collaborative spirit in the right direction of resilience, which involves a twofold behaviour: reacting to adverse factors and adapting to those that cannot be controlled.

In this way, despite the adversities mentioned above, we managed to:

  • overcome the pandemic faster with discipline and effective new drugs;
  • trigger recovery by intercepting all unmet needs from the lockdown;
  • successfully search for alternative energy sources to Russian gas and other internationally scarce raw materials;
  • curb rampant inflation, especially with energy savings that are lowering price tension (even if some trends have not yet been contained);
  • occupy new commercial spaces abroad by virtue of the global recovery and a reborn interest in Italian-made products;
  • resuming investment in development and innovation, despite rising interest rates, even following the PNRR guidelines.

All the gloomiest forecasts for an Italy prey to the disasters of the aforementioned calamities, affirmed by the most authoritative international institutions, have been drastically belied by our first widespread resilience in history. Of course, all the difficulties are not over, and perhaps some of the predictions of crises may still be overdue, but this was a sign of the system’s will, which is uncommon in our country and which bodes well for the future, because certainly the uncertainties and dysfunctions of globalisation will still make their effects felt even here.

What we have not yet managed to do concerns the transition to sustainable development. In fact, we have not made significant progress in this area compared to before the pandemic, and the Alliance for Sustainable Development (ASVIS) has assessed improvements in only two of the 17 goals of the UN 2030 Agenda. Yet the medium- to long-term social and environmental risks are many and will increase in the future until they become irreversible.

At this point, even greater resilience is needed, because it is clear that we need to reset our economic, social and environmental system to more connected and synergetic solutions. But to do this requires capital and, above all, a greater commitment to quality work, i.e. higher skills and determination in the pursuit of desired results (i.e. human capital development is essential).

In reality, the operational resilience that has characterised us in recent times is still not enough for sustainable development, because a planned and coordinated design by all is needed, and clear strategies by each organisation are indispensable. While there are already many virtuous structures capable of pursuing such an arduous and far-sighted path, the majority of them still lack sufficient skills and determination to take such a challenging step, in a system that still offers little encouragement to the deserving or those who wish to become so. In other words, it is a question of incentivising current sacrifices in order to obtain much greater benefits in the future and to avoid new disasters, which will certainly occur if we continue in the direction of traditional development, as we have conceived it in the past.

To give a striking example, Objective 8 (decent work and economic growth) cannot be avoided as a priority in the social sphere, but the social and economic antithesis of this objective makes it difficult to achieve, as the actual result of guaranteeing decent work (in terms of remuneration and operating conditions) is very costly for companies and this is detrimental to economic growth (thus limiting the increase in GDP). In fact, growth often takes place at the expense of decent work, or it is dampened as decent work expands.

Even recently, such phenomena have occurred:

  • as growth has increased, unemployment has indeed decreased (indeed, in the first quarter of 2023 new jobs were high, especially in the Veneto region), but for some time now there has also been a new trend of job rejection by those who do not accept a job that is inadequate to their expectations, partly nullifying the net employment expansion (which could have been greater);
  • despite the concomitant increase in both employment and economic growth, the poor have also increased, because some jobs do not provide sufficient income for a minimum standard of living (only as decent employment increases do the poor decrease);
  • average wages have remained more or less stable since the 1990s, despite the fact that price increases over more than two decades have lowered their purchasing power, and thus the most modest improvement in labour income has only been possible through career advancement.

Yet remedies to such a stalemate and vicious circle exist and are possible, but certainly require greater commitment from all. Given the need for a clear illustration of the subject, this discussion is postponed to a future article.

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