Sergio DestefanisSergio Destefanisdestefanis@unisa.itdestefanis@unisa.it

(Università di Salerno and CSEF, Italy)(Università di Salerno and CSEF, Italy)

Local levels of skills and local initiatives to promote Local levels of skills and local initiatives to promote skills development in Italy’s small businessesskills development in Italy’s small businesses

International Workshop

Skills Development for SMEs and Entrepreneurship Danish Business Authority - OECD LEED Programme

Copenhagen, November 28th 2012

Outline of the presentationOutline of the presentation

- Italy's structural situation (- Italy's structural situation (DualismDualism, , DeclineDecline, , sizesize))- Mapping the skills policy framework in Italy- Mapping the skills policy framework in Italy- Some new evidence from 2 OECD-LEED projects- Some new evidence from 2 OECD-LEED projects

Skills for CompetitivenessSkills for Competitiveness: the : the diagnostic tooldiagnostic tool

Local Job Creation: Local Job Creation: a dashboarda dashboard

- Problems and Best Practices- Problems and Best Practices- Emerging policy issues- Emerging policy issues

Italy's structure:Italy's structure:the well-known dualism influences skills demand;the well-known dualism influences skills demand;

these are the hi-tech local districts these are the hi-tech local districts

Italy's structure: Italy's structure: the Declinethe DeclineGDP per hour worked, selected European countries:GDP per hour worked, selected European countries:

1997-2010 (average annual rate of change)1997-2010 (average annual rate of change)

0

0,5

1

1,5

2

2,5

3

3,5

Italy's structure:Italy's structure: growing share of temporary workers growing share of temporary workers

Italy's structure: Italy's structure: High share of (very) small firms, of self-employmentHigh share of (very) small firms, of self-employment

V a lu e -a d d ed , w o rkers a n d n . o f co m p a n ie s in m a jo r E u ro p ea n co u n trie s -Yea r 2 0 0 4 (p ercen ta g es)U K IT A F R A G E R SP A

N . F irm s 1 3 ,1 3 2 ,1 1 9 ,1 1 4 ,6 2 1 ,1N . E m ploy ees 2 2 ,4 1 8 ,2 1 7 ,7 2 5 ,7 1 6V A 2 5 ,5 1 5 1 9 2 8 ,3 1 2 ,1

S e lf-em p lo yed in m a jo r E u ro p ea n co u n trie s - Yea r 2 0 0 4 (p e rcen ta g es)U K IT A F R A G E R SP A

m a n u fa c tu rin g 3 ,4 16 ,6 2 ,2 2 ,2 5 ,5b u sin e ss se rv ic e s 1 0 ,8 43 ,8 4 1 3 ,9 1 9 ,3T o ta l 7 ,6 33 ,2 5 ,1 8 ,3 1 7 ,4

Source: Ista t e laborations on E urosta t S tructura l B usiness S ta tistics

% em p lo ym en t in firm s < 2 0 em p lo yees in m a jo r E u ro p ea n co u n trie sU K IT A F R A G E R D N K

m a n u fa c tu rin g 8 ,3 30 ,3 1 7 11 ,3 1 6 ,1b u sin e ss se rv ic e s -- 46 ,3 1 2 ,1 3 3 ,8 3 3 ,4Source: B arte lsm ann et a l. (O E C D E D w p 348 , 2003)

Mapping the skills policy framework in Italy (1)Mapping the skills policy framework in Italy (1)

National and, especially, regional policy makers have only recently begun to focus on skills in Italy, with varying degrees of success.Resources and attention are devoted to developing skills supply (training) and demand (R&D, innovation), rather than promoting a supply-demand balance. Indeed, the 2010 Labour Plan from the Ministry of Labour announced that Italy, more than other countries, presents a marked mismatch between labour demand and supply. Then went on blaming the “total inadequacy of the training system” for this state of affairs above anything else.The lack of a robust socio-economic infrastructure able to bring together workers and firms is also evoked but is seen as a lower contributing factor.

Mapping the skills policy framework in Italy (2)Mapping the skills policy framework in Italy (2)Ederer (2006): Ederer (2006): Human Capital Endowment is strongly determined by on-Human Capital Endowment is strongly determined by on-

the-job and adult learningthe-job and adult learning, both are relatively low in Italy, both are relatively low in Italy

Mapping the skills policy framework in Italy (3)Mapping the skills policy framework in Italy (3)skills supply (vocational training):

strong territorial differentiation in the workings of training levies

Mapping the skills policy framework in Italy (3)Mapping the skills policy framework in Italy (3)skills supply (apprenticeship training): similar territorial differentiation

Mapping the skills policy framework in Italy (4)Mapping the skills policy framework in Italy (4)SSkills demand (R&D, innovation)

Aid focuses on small firms, less developed regions (?), environment-related investments, R&D activities, applied research.

There are good funding opportunities for research commissioned to private and public entities, initiatives to promote the temporary in-house assignment of researchers and technicians, acquisition of patents.

Yet, the available evidence (Gabriele et al., 2006; Brancati, 2010; Martini & Trivellato, 2011) suggests that this kind of aid has no positive impact on profitability, technical change or productivity. The lack of effective selection procedures has often been blamed for this outcome.

Mapping the skills policy framework in Italy (5)Mapping the skills policy framework in Italy (5)Supply-demand balance & skills matching (PES):

relatively few resources are devoted to them in Italy.

The OECD-LEED ProjectsThe OECD-LEED Projects

Skills for Competitiveness Skills for Competitiveness &&Local Job CreationLocal Job Creation::for methodology and other features, please refer to:for methodology and other features, please refer to:

http://econpapers.repec.org/paper/oeccfeaaa/2012_2f9-en.htmhttp://econpapers.repec.org/paper/oeccfeaaa/2012_2f9-en.htm

http://econpapers.repec.org/paper/oeccfeaaa/2012_2f4-en.htmhttp://econpapers.repec.org/paper/oeccfeaaa/2012_2f4-en.htm

http://econpapers.repec.org/paper/oeccfeaaa/2012_2f17-en.htmhttp://econpapers.repec.org/paper/oeccfeaaa/2012_2f17-en.htm

Sk for C:Sk for C: the “OECD diagnostic tool” the “OECD diagnostic tool”Multinomial Logit evidence for Italian provinces (TL3), years 2001 and 2009.Multinomial Logit evidence for Italian provinces (TL3), years 2001 and 2009.

What determines a province's location in a given quadrant?What determines a province's location in a given quadrant?

SKILL SHORTAGE:Strong 2-ary sectorLarge population

HIGH-SKILL EQ.:Strong 3-ary sectorStrong 3-ary sectorLarge populationLarge population“Attractive University”“Attractive University”Lower share of tempsLower share of temps

LOW-SKILL EQ.:baseline

SKILL SURPLUS:““Attractive University”Attractive University”

Sk for C:Sk for C: taking stock of problems taking stock of problems There is still relatively little awareness about skills There is still relatively little awareness about skills

utilisation in Italy. The growth of temporary work utilisation in Italy. The growth of temporary work did not improve this state of affairs.did not improve this state of affairs.

Firms' small size makes R&D + innovation, policy, and Firms' small size makes R&D + innovation, policy, and inter-firm, co-ordination, diffusion of information, inter-firm, co-ordination, diffusion of information, more difficult. The famed more difficult. The famed distrettidistretti did not solve did not solve these problems. these problems.

Skills policy ineffectiveness is enhanced by lack of Skills policy ineffectiveness is enhanced by lack of effective selection procedures in aid provision, and effective selection procedures in aid provision, and by lengthiness of bureaucratic proceduresby lengthiness of bureaucratic procedures..

LJC: LJC: taking stock of problems taking stock of problems

The The Agenzia del LavoroAgenzia del Lavoro from Trento is doing fine, but from Trento is doing fine, but - more needs to be done about - more needs to be done about skills utilisationskills utilisation (even (even

in this rich and relatively dynamic area, virtually in this rich and relatively dynamic area, virtually nobody cares about high-performance work nobody cares about high-performance work practices).practices).

- Better - Better communication and co-ordination among communication and co-ordination among public entitiespublic entities, , ex-post evaluationex-post evaluation and and forward forward planningplanning of policies, should be put in place. of policies, should be put in place.

Best practices #1Best practices #1

The The Distretto Calzaturiero del BrentaDistretto Calzaturiero del Brenta..

A long-standing reality, characterised by ACRIB (a local A long-standing reality, characterised by ACRIB (a local employers' association) and by employers' association) and by Politecnico CalzaturieroPolitecnico Calzaturiero (a (a very important very important privateprivate school of arts and crafts). school of arts and crafts).

Highly successful product innovation, enacted by a network of Highly successful product innovation, enacted by a network of fairly small firms.fairly small firms.

it tied firms from the provinces of Venezia and Padova in one it tied firms from the provinces of Venezia and Padova in one single organisation, opened the way for co-operative single organisation, opened the way for co-operative mechanisms uniting employers and workers, and for the mechanisms uniting employers and workers, and for the establishment of an innovative Territorial Council (establishment of an innovative Territorial Council (Consulta Consulta TerritorialeTerritoriale).).

Best practices #2Best practices #2

The 2011 Development Pact (The 2011 Development Pact (Patto per lo Patto per lo SviluppoSviluppo...) from Treviso province....) from Treviso province.

This is a young reality, also exemplifying what is happening in This is a young reality, also exemplifying what is happening in other areas (especially in Italy's North-east).other areas (especially in Italy's North-east).

It is characterised by territorial joint (NOT firm-level) wage It is characterised by territorial joint (NOT firm-level) wage bargaining and from a co-operative employers-worker bargaining and from a co-operative employers-worker approach to employment and development.approach to employment and development.

Best practices #3Best practices #3

The The Borsino delle professioniBorsino delle professioni (Stock Exchange (Stock Exchange of Occupations).of Occupations).

Employment agencies in Veneto and Trento's province provide a Employment agencies in Veneto and Trento's province provide a dynamic tool following the evolution of the labour market, dynamic tool following the evolution of the labour market, facilitating supply - demand matching and simplifying bureaucratic facilitating supply - demand matching and simplifying bureaucratic procedures.procedures.

Firms and potential workers lodge on-line their job vacancies and CVs. Firms and potential workers lodge on-line their job vacancies and CVs. The The BorsinoBorsino offers monthly information on local labor market offers monthly information on local labor market trends and developments detailed by occupational profile. trends and developments detailed by occupational profile.

In the near future the agencies are planning to use this service to In the near future the agencies are planning to use this service to assist career choice and job-search guidance.assist career choice and job-search guidance.

Best practices #4Best practices #4 Dual ApprenticeshipDual ApprenticeshipA dual system of apprenticeship combines workplace practice with A dual system of apprenticeship combines workplace practice with

vocational education in training schools. It exists in several countries, vocational education in training schools. It exists in several countries, notably Germany, Austria and Switzerland. Apprentices are trained in a notably Germany, Austria and Switzerland. Apprentices are trained in a company 3-5 days a week. The other part of the dual system involves off-company 3-5 days a week. The other part of the dual system involves off-the-job education at a vocational school.the-job education at a vocational school.

This system appears to have worked well across European countries. This system appears to have worked well across European countries. Interestingly, a similar system is enacted in Trento's neighbouring Interestingly, a similar system is enacted in Trento's neighbouring province, Bolzano, possibily beingprovince, Bolzano, possibily being one contributing factor to its current one contributing factor to its current low rates of youth unemployment.low rates of youth unemployment.

A potential disadvantage of starting dual training too early is that young A potential disadvantage of starting dual training too early is that young people may fail to pick up the generic transferable skills which will help people may fail to pick up the generic transferable skills which will help them in being mobile later in their careers. Support for employment them in being mobile later in their careers. Support for employment progression from Labour Agency should also be provided.progression from Labour Agency should also be provided.

Emerging policy issues (1)Emerging policy issues (1)

In Italy, successful traing and higher skills utilisation In Italy, successful traing and higher skills utilisation needs co-operative worker-employer approach with needs co-operative worker-employer approach with strong role of local employers' associations. strong role of local employers' associations. A current A current reform of industrial relations is going somehow in this reform of industrial relations is going somehow in this direction.direction.

More decentralisation More decentralisation couldcould help in achieving a closer help in achieving a closer relationship between local public authorities and local relationship between local public authorities and local development. However, if social capital is scarce, development. However, if social capital is scarce, giving a freer rein to local public authorities may be giving a freer rein to local public authorities may be conducive to more rent-seeking rather than to more conducive to more rent-seeking rather than to more proactive behaviour. proactive behaviour. North-South divide???North-South divide???

Emerging policy issues (2)Emerging policy issues (2)The public sector can in any case fulfil an important role in The public sector can in any case fulfil an important role in

providing more information at a territorially disaggregated providing more information at a territorially disaggregated level. There is in Italy a lack of local data on skills supply and level. There is in Italy a lack of local data on skills supply and demand of skills. demand of skills. The The BorsinoBorsino IS very useful IS very useful..

Reconciliation of a more flexible and decentralised public sector Reconciliation of a more flexible and decentralised public sector with some control over rent-seeking practices could be with some control over rent-seeking practices could be attempted by finding a new and stronger role for public attempted by finding a new and stronger role for public employment service at the local level. employment service at the local level. The current reform of The current reform of labour-market policies MAY be useful (introducing much more labour-market policies MAY be useful (introducing much more pervasive unemployment insurance and making job centres pervasive unemployment insurance and making job centres responsible for it).responsible for it).