How to create a favourable environment to new ventures and ICT

							  How to create a favourable
environment to new ventures
        and ICT investments
                Francesco Molinari,
           mail@francescomolinari.it

                 http://research.altec.gr/ariadne
Topics List

     “Lesson drawing” in public policy:
     inspiration more than imitation
     A case study from Massa-Carrara - a
     small province of Tuscany, Italy
     From concertation to innovation, the
     missing link with R&D policy
     Lessons learnt
     Discussion
Francesco Molinari   ENGAGE Indonesia Business Event 14th Sep 06   2
“Lesson drawing” in public policy
     Benchmarking is a favourite buzzword of our
     times
     In broad terms, it implies the continuous search
     for best practices, innovative ideas, efficient
     operative processes, to improve the
     performance of an organisation
     Translation: take a success story and try to do
     the same …
     But what does this mean? “Imitate” or just “get
     inspired”?

Francesco Molinari   ENGAGE Indonesia Business Event 14th Sep 06   3
“Lesson drawing” in public policy
     As a managerial technique, benchmarking
     promotes learning from the successful practices
     of others, by identifying our own gaps and the
     best ways to solve them
     It’s a way of innovating by imitation
     In public policy, benchmarking has also been
     supported by the recent proliferation of
     performance indicators as a tool for “giving
     account to the citizens”
     However, “transparency of targets” does not
     necessarily imply a “copycat approach” from the
     policy makers …
Francesco Molinari   ENGAGE Indonesia Business Event 14th Sep 06   4
“Lesson drawing” in public policy

     This behaviour revokes the Schumpeterian
     (1942) paradigm of “political entrepreneurs”,
     striving for the people’s votes through any kind
     of competitive advantage, including imitation of
     successful innovation …
     But as Schumpeter himself taught us, there may
     be a limited advantage in these efforts, due to
     the “decreasing profitability” of innovation, as the
     number of imitators goes up …

Francesco Molinari   ENGAGE Indonesia Business Event 14th Sep 06   5
“Lesson drawing” in public policy
     More recently, a list of 7 “contingencies for
     lesson drawing” has been provided by the
     literature (Rose 1993)
     These can be seen as preconditions for an
     effective transfer of policy initiatives from one
     place to another
     In general, the fewer conditions are met, the
     more difficult is benchmarking
     Going through the list, one finds increasingly
     difficult to fulfil the requirements of transferability

Francesco Molinari   ENGAGE Indonesia Business Event 14th Sep 06   6
Contingencies of Lesson Drawing
1.        Multiple targets for a same policy
2.        Adequate resources available
3.        Consolidated institutions involved
4.        Simple initiatives to be carried out
5.        Small scale of expected change
6.        Interdependency of programs
7.        Consistent values (of policy makers)
Source: Rose 1993



Francesco Molinari    ENGAGE Indonesia Business Event 14th Sep 06   7
The province of Massa-Carrara

     The north-western
     “tip” of Tuscany
     region, in central Italy,
     close to Lucca, Pisa,
     Florence and Sienna
     A small province with
     ~200,000 inhabitants
     and a ~140,000 high-
     to medium- skilled
     work force
Francesco Molinari   ENGAGE Indonesia Business Event 14th Sep 06   8
Strengths and Weaknesses
     High export/GDP ratio, with good technological                   The highest unemployment rate in north-central
     content                                                          Italy.
     A central, strategic location with respect to major              High percentage of women and white-collars among
     trade routes.                                                    the persons in search of employment.
     A commercial port with full support facilities.                  Historical and persistent economic, social, and
     Excellent access to lines of communication: roads,               demographic “dualism” between the coastal strip
     railways, other ports, and airports.                             and the inner area of Lunigiana.
     Above average level of instruction and schooling.                Structural crisis in the stone production sector.
     Proximity to national and international universities             Production and organizational shortcomings in the
     and research centers.                                            agricultural sector.
     High quality of life.                                            Residual problems of remediation of some industrial
     Very interesting historical, archaeological, artistic,           areas; in general, conflicts between environment
     natural, and cultural features and resources (incl.              and some economic/industrial activities.
     spa).                                                            Need to consolidate a development model based on
     Typically local agricultural and crafts products.                investments by local SMEs and on the increase of
                                                                      tourist-oriented activities.
     Seaside tourism attractions in the coastal areas,
     mountain and rural tourism in the Lunigiana area.
     Many public and private centers providing services
     to enterprises.
     A subcontracting network, particularly active in the
     mechanical and nautical industry.
     An area of 822 hectares, the so-called Zona
     Industriale Apuana (Apuan Industrial Zone), in
     which are located more than 800 SMEs, many of
     which technologically innovative.
     Availability of industrial sites in the coastal and
     Lunigiana areas.

Francesco Molinari                        ENGAGE Indonesia Business Event 14th Sep 06                                   9
Past and Present
     Up to 30 years ago, most of our people were employed
     as permanent staff in the Carrara marble district
     (quarries and laboratories) and in a few big industries
     (mainly belonging to the State); tourism was mainly seen
     a seasonal “income integrator”, especially for women
     (only a minority of which was available to work)
     30 years later, for different reasons, marble and State
     industry have left the stage to a wide variety of SMEs,
     most of which technologically advanced, esp. in the
     mechanical and nautical sectors; tourism is now
     perceived as a long term opportunity, but still not wide
     enough to host the whole “womanpower” unutilised

Francesco Molinari    ENGAGE Indonesia Business Event 14th Sep 06   10
What has been the bridge?




Francesco Molinari   ENGAGE Indonesia Business Event 14th Sep 06   11
Concertation as a policy tool
     If all the above transformations have occurred
     without social contrasts or tensions between
     conflicting interests, key was a special kind of
     decision making that involved all relevant
     stakeholders - from employers to trade unions,
     from industrialists to environmentalists, from
     public administration to the private sector
     Concertation does not stand for “concerted
     action” (as in the EU and other experiences)
     It unites two Latin words: “cum” and “certamen”,
     meaning “to fight with”, “to make war (=to tackle
     problems) together”
Francesco Molinari   ENGAGE Indonesia Business Event 14th Sep 06   12
Concertation: a bridge between …
     Big and Small, Foreign and Local: by dismantling the old
     State industries and investing on a proliferation of local
     SMEs (75% of which established in the last 30 years)
     Past and Present: at some point of time, it was decided
     to give priority to the interests of unemployed (or “fired”)
     fathers i/o their sons looking for first-time jobs (as a
     result, my generation is now largely missing from the top
     executives in the area)
     The Battle of Sexes: by investing on new industrial
     settlements i/o plain tourism, it was given priority to male
     i/o female unemployment reduction
     Environment and Production: one of the most beautiful
     natural sites of Italy had to save a high quality of life in
     spite of the industrial activities run there
Francesco Molinari     ENGAGE Indonesia Business Event 14th Sep 06   13
A noteworthy example
     The Territorial Pact of Massa-Carrara Province was
     approved and funded by Ministerial Decrees Nos. 981 &
     996 of 29th January 1999.
     The final draft of the Pact was signed in Florence on
     30th March 1999 by 74 entities (14 local government
     bodies, 14 enterprise and/or workers associations, 6
     banks and 40 private companies).
     47 projects of public (infrastructure) or private (business)
     initiative called for investments of about 183 billion Lire
     (today 94,5 million euros), with a corresponding funding
     from CIPE (the Committee of Ministers for Economic
     Planning) in the amount of about 57 billion Lire (more
     than 29 million euros).
Francesco Molinari     ENGAGE Indonesia Business Event 14th Sep 06   14
General Aims of Territorial Pact
     To re-industrialise 0,8 million sq.m. of unused industrial
     areas by strengthening the local system of SMEs.
     To improve environmental conditions and to reorganise
     production in the stone sector and the commercial port of
     Marina di Carrara.
     To increase and diversify agricultural production in the
     Lunigiana area by promoting its typical products.
     To implement and diversify tourism on the coastline by
     integrating it with new attractions, including spa facilities.
     To increase exports of added-value goods and services
     to the rest of Italy and the foreign countries.
     To match offer and demand for quality jobs in the area.
Francesco Molinari     ENGAGE Indonesia Business Event 14th Sep 06   15
“Context improving” actions
     Agreement on employment flexibility and labor cost
     On 18th December 1997, an agreement was signed by the social
     Parties, introducing elements of flexibility in the contractual relations
     and deferring the implementation of individual salary agreements in
     the private ventures of the Pact.
     Agreement on credit facilities
     On 16th January 1998, a Letter of intent was signed by the main
     private banks operating in the Massa-Carrara province, expressing
     their commitment to co-finance the public and private investments of
     the Pact, besides State funding and the proposers financial
     commitments.
     Agreement on simplification of administrative procedures
     On 10th March 1998, an agreement setting forth methods for
     simplifying the administrative procedures relative to the Territorial
     Pact investments, was signed by the Region of Tuscany, the
     Province of Massa-Carrara, and the local government bodies
     concerned.
Francesco Molinari         ENGAGE Indonesia Business Event 14th Sep 06       16
The missing link with R&D policy
     An explicit reference to R&D and ICT was lacking in the
     Pact … and is still a serious drawback of local industrial
     policy!
     Attempts are currently ongoing to identify a reference
     organisation with respect to technology transfer, but
     “competition” is prevailing over “coalition” …
     However, this can be more a peculiarity of the whole
     Tuscany than of the Massa-Carrara province in itself, as
     is testified by the Regional Law No. 1 of 2004, promoting
     an intensive and extended coordination of public policies
     to increase the ICT and RTD penetration rates and to
     build services for e-Inclusion and e-Participation

Francesco Molinari    ENGAGE Indonesia Business Event 14th Sep 06   17
Lessons learnt
     The Presidency Conclusions from the March 2006 European
     Council call for the links between R&D, innovation systems and
     business environments to be strengthened in order to improve the
     effectiveness of the innovation process.
     It’s now clear that innovation is largely a collaborative activity that
     may involve a multitude of organisations, and the links between the
     innovation actors are crucial if the system as a whole has to function
     effectively.
     However, a public system of incentives alone may not be able to
     manage the conflicting interests between stakeholders, unless a
     common and shared vision is reached about the desired “innovation
     orientation” of a community.
     This can be especially the case for the most valuable, knowledge-
     intensive, and complex technologies such as ICT, biotechnology,
     and advanced materials.
     Concertation may be a key to build consensus and improve the
     efficiency or effectiveness of new/existing knowledge networks.
Francesco Molinari        ENGAGE Indonesia Business Event 14th Sep 06      18
Comments and Discussion


     Thanks for your kind attention!




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Francesco Molinari        ENGAGE Indonesia Business Event 14th Sep 06   19
References
     Schumpeter, J.A. (1942) Capitalism, Socialism
     and Democracy. New York: Harper & Bros.
     Rose, R. (1993) Lesson-Drawing in Public
     Policy: A Guide to Learning Across Time and
     Space. Chatam: Chatam House Publishers
     Brussels European Council (23rd/24th March
     2006) Presidency Conclusions
     http://ue.eu.int/ueDocs/cms_Data/docs/pressDat
     a/en/ec/89013.pdf
     More on Massa-Carrara Territorial Pact:
     http://www.investmassacarrara.com/eng

Francesco Molinari   ENGAGE Indonesia Business Event 14th Sep 06   20