Productivity and birth rate: the GSSI study on mSMEs

The scientific core of the comparison coincided with the preview presentation of the research entitled “When productivity slows down the birth rate: the case of mSMEs in Italy“, developed in collaboration with the GSSI – Gran Sasso Science Institute of L’Aquila. The survey examined a massive sample made up of 6,828 Italian municipalities and 51,447 longitudinal statistical observations in the period between 2015 and 2022.. From a methodological point of view, the main innovation of the study lies in the application of a rigorous computational strategy to instrumental variables, an advanced mathematical model which made it possible to isolate the causal direction of the phenomena, excluding disturbing factors. The research outputs demonstrate that the total factor productivity within micro and small businesses has a direct impact on the local fertility index: for every increase of 1,000 euros in added value per single worker in mSMEs, the following year there is an average increase of 2% in fertilitywith a statistically more marked incidence in internal and peripheral municipalities. The study also highlights how traditional passive welfare interventions, such as the provision of nursery schools alone, are not sufficient to change birth rates in the absence of employment stability for young adults.

The transition towards production models with greater added value requires a profound review of the ways in which work is organised, an aspect analyzed by Marco Travaglini, President of the Centro Studi ProducivItalia: “Productivity isn’t just about machines or processes, it’s about how we work together, how we communicate and how we build collective value. It is the first real social problem in our country. Talking about productivity means addressing the issues that weigh on people’s lives: real wages, the emigration of young people and the future of work. There is a profound misalignment between the world of those who manage technology and finance and the world of those who produce every day in the area, the main cause of low productivity”. According to this systemic approach, low Italian efficiency does not depend on the quantity of hours worked, but on the lack of investments in enabling technologies and in the training of advanced skills necessary to retain qualified human capital.

In the sessions dedicated to technological innovation, the debate highlighted how digital transformation and the adoption of artificial intelligence architectures represent the main levers for reversing the trend of stagnation, especially in knowledge-intensive sectors such as advanced manufacturing, chemistry and pharmaceuticals. Productivity as an object of research and not just as a statistical data was at the center of the contribution of Professor Alessandro Giudici, Full Professor of Business Strategy and Dean of the Faculty of Management at the Bayes Business School. Italy, made up of very different hyperlocal entrepreneurial systems, needs differentiated policies and tools capable of helping companies attract talent, innovate and grow.

Digital transformation has emerged as one of the decisive conditions for this leap in quality. Gabriele Ferrieri, ANGI President, recalled the Italian gap in investments in research and development and the need to put young people at the center of entrepreneurial processes. Innovating also means combating brain drain, encouraging the repopulation of territories and making public administration simpler, faster and closer to those who create businesses.

The link with the local economy was reported to the Rieti case by Marco Pezzopane, President of the Small Industry Committee of Unindustria Rieti, who indicated possible trajectories to reverse the negative development trend in sectors with greater added value, such as energy, pharmaceutical and chemical manufacturing.

Technologies and artificial intelligence can reduce administrative times, standardize procedures and free up energy for more qualified activities. The implementation of predictive algorithms and automation tools in the processes of mSMEs and professional firms allows us to drastically reduce the times of repetitive administrative procedures, standardizing ordinary workflows and freeing cognitive and economic resources to be allocated to activities with higher strategic value. However, as underlined by the systems theory and data governance experts present at the table, the introduction of artificial intelligence and satellite monitoring systems for complex territories, such as the Apennine area, requires the development of a solid logical backend infrastructure and the expansion of the critical capacity of management, to prevent administrative fragmentation from neutralizing the effectiveness of investments in research and development.

The contributions that emerged during the meeting will flow into a multidisciplinary strategic document that will integrate seven other lines of research active with various Italian universities, focused on digitalisation with the Polytechnic of Milan, safety at work with the La Sapienza University, innovation with the University of Tuscia and the development of services with the University of Molise. This overall action plan, entirely based on empirical evidence and standardized econometric data, will be formally delivered to the institutions and the next government executive as a policy framework for planning the country’s infrastructural and industrial investments.