Four years in Italy – The paradox of unexpressed potential: who wants to join forces to make a difference?

In a few weeks I will celebrate two important moments for me. First, at the beginning of February I will close my fourth year in Italy as the Country Manager for Microsoft Italia; two weeks later, on February 15th, I will kick-off a fantastic launch ceremony for our new Headquarter in Milan. This is a good moment to reflect back on these four years, share my thoughts around the business impact we have had and what we want to do for the Country going forward.

I still remember very clearly the feedback I received in February 2013 when I arrived in Milan. There was for sure curiosity toward a person coming back to his home country after 18 years abroad: in fact there was and still is an ongoing discussion in Italy about people leaving the country for lack of business opportunities. I am one of those who left and came back, and this was the trigger event for several discussions: colleagues, partners and journalists were all asking the same question: why? Why are you coming back to Italy? This country does not work properly, it’s broken, it’s not growing, it’s not creating opportunities, why didn’t you continue your career where those possibilities exist?

I was astonished by the question, and at the same time I had to ask the question myself. I came back exactly because I knew the Country was not in perfect health, I did it because I felt I wanted to contribute to changing the situation from a position where I believe I could make a difference and I wanted to give back to my home country what I had learned. I strongly believe that technology is a powerful lever for the transformation needed, Microsoft is a driving force for the digital transformation globally, and with a strong ecosystem we can do it in Italy even more and faster then ever. That was the ambition, and that is what we are doing!

The Status of the Business

Italy is the developed country that has suffered the most from the financial crisis of 2008, with a GDP that is today only 76% of what it used to be prior to the crisis. Other countries have been able to recover more quickly than Italy post the crisis: France’s current GDP is 82% of what it was in 2008, Japan is 85%, Germany 89%, UK and Canada got back to the same level, therefore around 100% and the United States GDP in 2015 has been 22% higher than in 2008. [WorldBank Data]

Another way to look at the problem is the market capitalization of the listed domestic companies. If we look at the period of time from 2006 to 2014, the WorldBank Data shows that in spite of the crisis most countries have increased the market capitalization of their domestic companies listed in the stock market, with the USA leading the pack with a growth of 36% in 8 years. Only three countries are showing issues: Japan decreased by 6%, France decrased by 14%, and in Italy the decline is just incredible, with the total market cap being only 57% of what it used to be 8 years before. This means that the largest Companies in this country, are worth today almost half of their worth in 2006.

This macro-economic situation has created for Italians something I would call a “confidence-trap”, meaning that people, students, managers, entrepreneurs, all suffer from a lack of confidence and belief in what the country can do. This surprised me as I was used to a country where in spite of everything people were extremely resilient and optimistic. The last 10 years have undermined this asset, and are creating a self-fulfilling prophecy of “national decay” with everybody contributing, including media and political elites.

The impact of this is very visible as we have a significant “investment-gap” in all sectors and across business sizes, therefore our entrepreneurs have somehow lost the view on where and how to create new sources of growth. In particular in the technology sector Italy had a ratio between IT investments and GDP that has been consistent with the same indicator for other Developed countries until the 90s, but since then this investment has lowered constantly and is now almost half of that of the other countries. Difficult not to relate this indicator to the total market cap, and extrapolate a lack of vision in the last 20 years in this country about how technology-based transformation can create business value. R&D indicators are not an exception, and show that the global expenditure in Italy has always been low, but instead of increasing it has decreased even further in the last years.

The ultimate result of this situation is the fact that Italy is experiencing the highest unemployment rate ever in the country’s history, especially high among the youngest generations (and growing again to an incredible 40% this month).

The Stakeholders are stuck

Entrepreneurship, in spite of decades of success and flourishing international business in many sectors, has unfortunately been declining: we lack product and services innovation, we lack international ambition, we lack global projects, we lack investments both within the Country and abroad.

The Public Administration is working with organizations, skills, processes and assets that are exactly the same as 20 years ago (or more) and there has not been any visible impact in terms of transformation of the services to the citizens. Fragmentation and obsolescence are neutralizing any kind of possible innovation; therefore, in spite of local, individual initiative (we still see great examples of innovation, and leaders with vision and willingness to transform), it is extremely complicated to change the final output visible from the Citizen standpoint.

In 4 years, I have already seen 4 changes in Governments (Monti, Letta, Renzi, Gentiloni): trying their best to mobilize energy and people in the right direction. For sure we can say we solved some several issues, but unfortunately we cannot say we created any new, sustainable competitive advantage for the Country. The Jobs Act is probably one of the best examples of progress made towards eliminating a competitive-gap, but Italy needs more than this. We need to create a path for economic growth, and this requires a quantum leap in both the vision and the execution capabilities of our political elites.

Media is not helping either. Day in and day out an important portion of what I read in the newspapers, see on television, and read in blogs and social is criticism about what doesn’t work. This type of negative media permeates negative messages across the country. How can younger generations have confidence in their future if all we do is point fingers on what doesn’t work? Why do we always believe the others are not doing their job? What about ourselves? What about sharing ideas on how to solve the issues? What about talking about facts and people who are already creating a positive impact and role modeling their behavior? It is interesting to rather think about the percentage of positive messages we have in our media and to try to foster an environment where more positive messages are sent to mobilize people and to help with the ‘confidence gap’.

The Country has Unexpressed Potential

In spite of all the negative data, I still strongly believe that in Italy there is a tremendous “unexpressed potential”.

Firstly, some of our most significant gaps can be considered as low-hanging fruits: as the country is behind on so many basics, focusing on these biggest gaps can achieve incredible results. Investments in R&D, and in the Digital Transformation including IOT and CLOUD are in my opinion the levers we should push because of the positive impact they can have on GDP. The solutions are mature and the local ecosystem to transform the opportunities into real benefits is ready. This is a race we should be running as fast as we can.

If we have been able to create business momentum in the last 50 years through individual entrepreneurship, and with the creation of Industrial Districts, we need now to reinvent ourselves into a future-focused system where we invest heavily in open and collaborative innovation. We need to understand that working together and cross-collaborating with a larger ecosystem we are stronger. This has become the standard everywhere. We need to make it work here in Italy.

In order to boost the Country we need to find ways to leverage our number one asset, the individual intelligence of the Italian people. We can gain a competitive advantage if:

-       We give more power to the younger generations

-       We invest more in education and skills development in all the phases of everyone’s life

-       We multiply the opportunities for women entrepreneurship and women’s participation in the workforce in general

-       We amplify the good messages of individual and collective success with a positive “pedagogic” approach

This undoubtedly requires focus, responsibility and collaboration from Entrepreneurs, Public Administration, Governments & Media. Collectively they can design and help shape our future.

How Microsoft and its Ecosystem are doing

At Microsoft we love looking at facts and numbers, and benchmarking ourselves both within the local marketplace and internally versus our peers. What Microsoft Italy has accomplished in the last four years is actually very strong.

-       Firstly, we went from being a low-single-digit-growth country within our internal Microsoft ecosystem, to a recurring-double-digit-growth country, with a solid track record in terms of performance and strategic products scorecard.

-       Second, we work with an ecosystem of partners for whom we put the bar of excellence at a rhythm of 20% yearly growth. Initially this was perceived as unattainable, some of our 200 “managed partners” are still working to achieve this goal, while many are now growing with this rhythm, and the best of them are growing more than 30%. This is creating not only traction in the marketplace, but also a significant number of jobs opportunities. We had to develop ad-hoc platforms including partnerships with startups and Business Schools to help our ecosystem recruit the right skills for these opportunities.

-       Third, we are proactively participating to a “cloud miracle” in the Country. This is a paradigm where any organization, large or small, can leverage IT infrastructures, platforms and services at incredible (quality+security)/costs rates, and transform their business into a digital-driven business. Our growth in the last four year has a CAGR of 96%, which means we have doubled our business every year for four years. This great performance is 10% higher than the average in Europe, which is a great result in a Country that is usually considered a follower on innovation. Our cloud services on Collaboration (Office365), Digital Transformation (Dynamics365) and Cloud Platforms (Azure) are booming in the market, and this means the market is ready for adopting, faster than other countries, this new paradigm of computing. We can be proud of this result.

Why we should continue to invest

With these results, and encouraged by what we see daily from our Customers, Partners, Startups and Students around the Country, we believe it’s time to invest more than ever and to bring technology-driven opportunities for growth … for everybody!

The move we are making of our Italian Headquarter to the center of Milan is a symbol of this investment as we want to show in a visible and useful way our commitment to be a significant and impactful engine for growth for the country.

The new building, called Microsoft House, will be a showcase of how smart work will have a positive impact on our life. It will be a platform for innovation within our ecosystem. It will be a platform to enhance the use of digital assets in the Education system. It will become an “agora” for innovation. It will be a place where any individual can get inspired by the opportunities created by the technologies that are transforming our life: Artificial Intelligence, Bots, Data-driven platforms, 3D and Mixed Reality. It will create a real positive boost for ideas and innovation.

Of course we do not want to do this as a single company: we want to be a catalyst for all those individuals and those organizations that belive that joining forces we can make a difference for the growth of the Country.

-       If you are a student and you are looking for growth opportunities, start using the Microsoft Virtual Academy (MVA) contents, navigate the Skills4You portal to learn about job opportunities in our Partners’ Ecosystem, explore the opportunity to become a technology specialist with CTO4Startup and look at BizSpark resources if you think entrepreneurship in the digital space can be a path.

-       If you are a Startupper learn how you can grow more at an international level through the program that we are sponsoring with Fondazione Cariplo called growITup

-       If you are a Microsoft Partner or want to enter into our Partner Network you can leverage resources to improve your business through Microsoft Technology in our Microsoft Partner Network  

-       If you are a Microsoft Client visit the new Microsoft Technology Center of Microsoft House in Milan is the new platform for Innovation

-       If you are an organization interested in the Digital Transformation you can navigate in our Stories Portal where other companies have experienced the advantages of technology to innovate processes, products&services and collaboration

-       If you are in Public Administration you will find useful resources here with the CityNext stories

-       If you are in education we have created a special community to share experiences on digital Education and you can visit the Animatori Digitali Community

If you are a Journalist or influencer, you can find the latest local stories on our Newscenter or follow us on Microsoft Italy Linkedin page

We believe in the future of Italy, we invest to create opportunities, and we partner with all those who share this vision. Collectively we can be a transformational force that helps ignite what should be a new self-fulfilling national desire for renewal, growth and well-being.