We are in a new digital post-world-war phase, and there is the need for a new digital Marshall Plan.
With the Italian Digital Agenda, Italy has accepted the challenge of developing the domestic digital media industry. On the other hand, Italian groups operating in the media industry – the main actors that should be involved in this process – are now facing the crisis of traditional media (and therefore a crisis of their business models,) which comes along with the entrance of new global players operating in the new media industry.
Enrico Gasperini, President of Digital Magics, introduced the D.SUMMIT, the Italian Summit on Digital Media, organised by Digital Magics and Grafo Venture, which took place on May 15, 2012. At the event were present the most relevant agents operating in the Digital Media Industry, big media groups, web companies and financial operators: 360 Capital Partners, 4w MarketPlace, Aegis Media Italia, Atlante Ventures, Connect Ventures, De Agostini, Gruppo 24 ORE, Gruppo Editoriale L’Espresso, Innogest, Matrix, Mediaset, Meta Group, Populis, Principia, RCS MediaGroup, Telecom Italia, Triboo, WPP.
We report Enrico Gasperini’s introductory speech, which highlights the main critical aspects of today’s Italian digital industry, and proposes some guidelines we should follow in order to strengthen the Italian ecosystem: sustaining the innovation industry and providing incentives to venture capital investing, as well as developing a stronger collaborative attitude of the actors operating in the Italian digital supply chain.
“In Italy only 2% of GDP comes from the digital industry, while in the European Northern Countries this percentage is about 6-7%. This gap is even more impressive if we consider that also in a developed sector such as the e-commerce industry, the Italian market is one half the size of the French one, one sixth of the British one, and one fourth of the German one.
Italian Venture Capital, in terms of per-capita early stage investments, is one sixth of the European average, which is, in turn, one sixth of the American Venture Capital Industry.
Recently, this gap in the digital industry has been explained by the fact that in Italy we are lacking in a widespread Internet broad band connection. On the other hand, in my opinion, this point cannot be considered as the most relevant problem in the development of the digital industry. Indeed, despite a slower Internet connection, in Italy there is a huge amount of Internet users, not distant from the European average.
In my opinion the real problem is the lack of investments in the innovation field: for example, the Italian market for couponing is about €500mln, which has rapidly grown, reaching in 2011 about 10mln users. However, this new market has been suddenly occupied by American big companies. The main reason for that is that we do not invest in projects which can scale and grow fast, so matching the rapidly growing demand for these new services: if our companies have no ability to scale, they will not be able to compete with big international companies. On the other hand, in the rest of Europe, differently from the Italian scenario, the market shares are divided between big companies from the Silicon Valley and their European domestic clones. In Italy, we do not create innovation, instead we suffer the disruption!
We are in a new digital post-world-war phase, and there is the need for a new digital Marshall Plan.
I am strongly convinced we have to start from start-ups: for instance, in US more than 40% of GDP is made by companies which did not exist before 1980. Indeed, nowadays start-ups are a mainstream topic, and play the most important role in Minister Passera’s recipes for supporting innovation in Italy and recover from the recession.
We have to start from the youth, from our young and talented human capital. The Engineer Carlo De Benedetti always tells of when he was president of Olivetti and rejected to buy 20% of shares of Apple Inc, proposed by the young Steve Jobs. He left “those two crazy people and concentrated on more important projects,” probably letting go the possibly most important deal of Olivetti and of his life. The moral of the story is that once Italy was one of the best country in the world about investing in research of young talents, while today we have lost this mentality.
Another important issue is about the innovation model we want to pursue in Italy: I believe that we should not copy the Silicon Valley style, but create our own innovation process, something more suitable to the Italian and European framework. In my opinion, the example we have to follow is instead the Berlin Valley, where big industrial companies invest in innovation, by directly supporting domestic start-ups and co-investing in venture capital funds. Moreover, these industrial groups buys the start-ups they help to grow, thus incorporating new innovative technologies and creating an exit for start-ups and investors operating in the innovation industry.
Moreover, I think that in order to compete in the global competitive environment, we have to invest in projects which involve the whole digital supply chain: for example, Italian big media groups, TVs and publishers, are now understanding that while facing the Internet they are little entities if compared to big global companies. If they want to challenge the global competitive environment, they have to build joint ventures in order to create platforms which can include more publishers and media partners. Similarly, in Italy we have nor an Italian easy digital payment system, neither an Italian platform for watching movies and series in streaming, and the main reason is that our big groups cannot afford the investments needed for developing such projects if they operate alone.
Finally, also the legislative point of view must be taken into account: in Italy the legislative system does not provide incentives towards the creation of new start-ups and investments in innovative start-ups. Moreover, the global groups (such as Google, Facebook, Apple and Microsoft) are privileged with respect to our domestic companies from the fiscal point of view: these big companies occupy our markets but, on the other hand, produce little fiscal revenues for the Italian Public Administration.
In conclusion, our legislator, together with venture capitalists and big industrial companies (especially those operating in the media industry) have to collaborate in order to make our ecosystem a new Berlin Valley, which will be able to reduce the gap with our global competitors with respect to the digital industry.”
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