April 5, 2016 – Rai Radio 3 aired an interview with SEP Scientific Council member Stefano Manzocchi, in which he discusses delocalization. When asked why Italian exporters aren’t as competitive (relative to those in emerging economies such as China), he argues that exports make up a huge proportion of Italy’s overall economy, and that they have increased steadily over the past 7-8 years. However, the bulk of these exporters are small, family-owned enterprises. To make them price competitive overseas, they need to get bigger in order to enjoy the benefits of economies of scale. The country as a whole also needs to improve its human capital.
On the issue of mid-sized businesses expanding overseas instead of locally, he argues that having a footprint in another country is an important strategy to improve competitiveness. An entrepreneur’s role is to do what is best for his business, not worry about the larger effects his decision might have on overall employment. This means taking advantage of lower labor costs for certain portions of the productive chain. When Italian businesses get bigger and better, no matter where they choose to locate their manufacturing hubs, the overall economy still benefits.
- The original interview (in Italian) is available from Rai Radio 3.