How strong is Italy’s urge to change?
By Madeleine Johnson
Published: 2009-11-10
Whether expatriates or tourists, few have come to Italy and not wondered at some point about the country’s wasted potential. With its enviable climate, historic culture, creative people, and key role in the European Union, why is Italy repeatedly perceived as falling short of fulfilling its considerable national potential?

Roger Abravanel, a former consultant for multinational McKinsey & Company who came to Milan in 1968 from Libya to study engineering at Milan’s Polytechnic University, has done more than just wonder. He methodically studied the problem, emerging both with convincing theory to explain it and offering concrete proposals for how to defeat the doldrums.

Students protest, but to they want an overhaul?

In his 2008 book “Meritocrazia. 4 proposte concrete per valorizzare il talento e rendere il nostro paese più ricco e più giusto” (“Meritocracy: Four Concerte Proposals for How to Take Talent Seriously and Make Our Country a Richer and More Just Place”), he traces Italy’s shortcomings to its failure to emphasize the importance of a meritocracy, or a society in which excellence is systematically rewarded.

Instead, he writes, both the public and private sectors all but ignore merit. So does an educational system that fails to encourage superior performances from students, encouraging the perpetuation of a longstanding patronage system that prizes personal connections. This widespread apathy toward noticing the best people, nurturing their talents, and rewarding their gifts, drags down the economy and culture of a country that on paper should hold a winning global hand.

Abravanel, 63, makes his case based on studying Italian success stories, including the successful reorganization of the Turin court system and the growth of private, eyewear designer Luxottica. He is now an advisor to Education Minister Mariastella Gelmini, helping to develop a national, standardized test similar to the American Scholastic Aptitude Test (SAT) for college enrollment. Madeleine Johnson chatted with him about what’s happened since his book appeared. These are excerpts from their conversation.

Your book really took off. You have a blog, you lecture and you consult on educational reform…

It’s sold more than 40,000 copies, fantastic for Italy. I give all proceeds to a religious institution and a nursing home.

What about your lecturing?

Roger Abravanel.

I’ve been surprised by the number of requests. I like to go where there are young people or places where people seem willing to act. It’s amazing when I look around and see who wants to change and doesn’t.

Who does?

Women. Many are on the warpath. But their efforts are often dispersive, which doesn’t help. Teachers also. A third of them are fed up, a third are awful, and the rest don’t know. Some company managers are out of patience with the insider, patronage system.

Who doesn’t want change?

University professors and entrepreneurs — old and young. The young ones don’t want it because their company protects their lack of skills; the old generation resists because if they do change, they’ll have to sell their company.

Then there are young people — particularly young Italian males; the young men are a disaster.

Why?

Values. They don’t like to compete. They … enjoy being protected by their families and family jobs. Their role models are soccer players and starlets. In the U.S. it’s Bill Gates, Barack Obama. Who do you have here? Giovanni Agnelli? [Editor's note: Agnelli was chairman of Fiat. He died in 2003].

Now what?

There’s been a lot of interest in my book outside Italy … The topic of meritocracy isn’t covered in the Anglo-Saxon world, because it’s second nature. I’m now working on a second book called “Freedom and Growth.”

There has been a lot of criticism of capitalism and the Anglo-Saxon way, based on the idea that there are not rules or regulations, only de-regulation. I go back to the history of capitalism and Milton Friedman to explain that capitalism has a lot of rules. Friedman said you couldn’t have capitalism without the rule of law, which is essential for regulation. But the problem with Italy is that no one observes the rule of law so you can’t have capitalism; you can’t have a free market because there are no rules.

You mean you need an institution that upholds rules…

That institution is the justice system. Think about civil justice, which is essential. Italy ranks 74th internationally in economic freedom, at the same level as Namibia. Think about the Mondadori decision [the legal battle between businessman Carlo de Benedetti and Prime Minister Silvio Berlusconi over the purchase of the Mondadori publishing group].

It took 15 years for a ruling. In terms of how long justice takes, Italy ranks below Gabon and New Guinea. It’s 156th.

The single biggest reason for these low rankings is the civil justice system and the fact that commercial transactions are not honored. People write a contract, which no one observes. Property rights are also essential. People talk about justice a lot these days, mentioning magistrates and so on. But they’re referring to criminal justice. The one that has a real impact is the civil side.

One statistic in struck me: 68 percent of Italians think their culture is superior to others, compared with 47 percent of Americans and 32 percent of French.

It’s amazing. It my next book I contrast this with the life skills survey. Ten years ago, scientists from ETS [Educational Testing Service] and the OECD decided to redefine literacy to beyond just reading. Literacy is what you need to understand, to think and elaborate documents, and problem solve – all essential for training people for jobs and citizens for life. Without life skills, the public is uneducated; people can’t perform jobs and citizens aren’t informed.

They studied five democracies: Italy, the U.S., Norway, Switzerland, Bermuda and Nuevo León, which is the poorest state of Mexico. In Italy they examined both north and south and ran tests in four categories with five levels of difficulty.

I just saw the results because of working with Gelmini. It’s appalling. Eighty percent of Italians are illiterate by these standards. A literate country should be around level 3. Norway has 75 percent above level 3. The U.S. and Switzerland has 50 percent above. Italy has 20 percent and Nuevo León is at 19.

Your work with Gelmini suggests that a desire exists to do something about this. But what about at the practical level?

One of my proposals was the launching of an SAT-type exam. I have been debating this with Gelmini for about a year … as [the] chairman of an advisory committee on how to use meritocracy to reform schools and universities.

In early October there was supposed to be a press conference on it, which she postponed because TAR [Italy's administrative court] blocked other parts of the reform and froze the test along with it. TAR could paralyze country. If one university test were contested, it would block the entire testing system…. In other words, everyone wants reform but it’s difficult to get to deeds. The moment Gelmini has to do something, she doesn’t do it.

It sounds like you you’re coming in from outside and working from the top, like you did as a management consultant. Is that right?

Only at McKinsey I was paid quite a lot to do it! This is all pro bono work… I try to stimulate. I see a big need to educate Italians. School is the lowest priority for Italians, who are happy with their school system. They are happy because the important thing is to get buoni voti, good grades.

They get good grades, but their degree is not worth a lot. The important thing is that children are in school and mothers can work. Education reform is the most difficult of all reforms, because you touch human beings, their values. So you can’t do anything unless it comes from the top.

Remember Tony Blair’s priorities? Education, education, education. Why could he do it? Because English parents were fed up, test results were bad and children were doing poorly. So he had the support of the population in fighting the unions. Why should Gelmini, or any other minister fight against thousands of professors and the unions if people don’t care?

So how do you convince them?

You need to start with trust. I’ve seen it in large companies. You start to do small things, and through word of mouth people begin to feel something is changing. You need to plant the seeds and things will happen. It is going to take a lot of time and you need some early wins.

When the SAT-type test we hope to introduce in Italy is in place, we hope to introduce a program called mille migliori. The thousand students with the highest scores will get a generous scholarship for a top university. They will be automatically admitted…

The best Italian companies will fund it and will follow these students giving them internships and eventually jobs. With luck, people will see that education pays, and so does hard work.

Shouldn’t you start younger?

That is another story. The problem with Italian schools is that on average, the PISA (an existing national test) scores are bad. But if you separate north and south, the north is okay while the south is level with Uruguay.

Equal opportunity? There is none if you are born in the south. So the idea is to take 500 pilot schools in the south that have low PISA scores and give them a math test at the prima media level (junior high school).

Then, with help from MIT for example, we select a group of very good math teachers who we dispatch to these schools on temporary basis – not to teach students, but teachers. Quality of the schools is about the quality of the teachers. Did you know that in Finland the teachers all come from top five percent of graduates? In Italy half aren’t even university graduates.

After a year, another test will show who’s improved and who hasn’t. This pilot program will try to show how you can improve things. It will help select the best students. Normally if these are from a poor family, they end up in a poor high school instead of a liceo (high school). With this method we can identify these kids early on and send them to the best schools.

In your book you mention the Catholic Church’s misgivings about material consumption. How important is this?

Fundamental. What is the purpose of an economy? Production. But no one considers that to produce something, you have to have a consumer. In Italy, there’s this Catholic-Communist notion that consumption is a bad thing.

Of course it’s true that statistics show that growing wealth by itself doesn’t make people happier. Of course there is a limit to what you can have. But this is a personal issue. Most true consumers are already at high-income levels. There are a lot of people who can’t even afford to buy more than their needs. If you don’t have consumption, and consumers, you don’t have producers.

I sense that many Italians just don’t feel responsible for their own destiny…

In Protestant culture there is an idea that state will help give you an education, after which you’re on your own. Essentially, future is a function of what you do now. You have a responsibility. That’s why the U.S. has the highest number of prisons: You make a mistake, you pay.

In Italy, this sense of responsibility doesn’t exist. It’s the Catholic mentality about being nice – buonismo. Make a mistake and we’ll forgive you. The extreme of such thinking is not following rules, not being responsible.

You tread lightly on the Church’s responsibility for Italy’s immobility.

I’m Jewish…

One of the major issues of your book is the role of women in Italy, or the absence of such a role.

Right now there is a proposal on the table, based on a Norwegian one where a company listed on the stock exchange will be dismantled if it does not have a certain percentage of women on its board.

I proposed modifying the Italian self-disciplinary code for companies listed on the stock exchange to require two women on each board. Though the chairman of the Milan stock exchange favors this, wording of the proposal is under constant negotiation. Now, there must be an “adequate” number.

The most frustrating thing is that more than 30 women’s associations have called me about it. Here is something they can agree on, but these associations aren’t aligned or focused. They have meetings, put things in the newspaper…

Now the wording has been changed yet again. The stock exchange chairman called me and said “You will be upset when you see it….”

You haven’t lost faith though.

Well, in this case [women] something is being done. Not as much as I would like, though it was really such an easy thing to do. But I was optimistic when I wrote the book and I remain optimistic because I believe Italians are ready to change.

On the other hand, I tell you, I see so few champions [of change] that I wonder who is going to do this. The politicians are what they are…. In the Anglo-Saxon world, capitalism has generated most radical changes. People in business will want change; even if is not in the interest of some of them. Here the entrepreneurs are a disaster. They evade taxes. So you can’t count on capitalism for change.

With so much bureaucracy in Italy, your book’s proposal to create another “authority” seems crazy.

The “authority,” or administrative panel, I proposed was for local services. Italy’s current authorities regulate competition only in certain areas of the public sector; national banks telecoms, energy. But no authority regulates local services such as taxis, retail or construction.

When [former Transportation Minister Giovanni] Bersani recommended the liberalizing of taxi licenses, the mayor of Milan, Letizia Moratti, said she didn’t want to go ahead with it because of pressure from Milan’s taxi drivers.

What I want is an authority that has the same power over mayors that the EU has on Italian government. Remember how Italy was forced to liberalize the energy sector by an EU directive? So this authority would tell Mayor Moratti if she doesn’t liberalize taxi licenses, she’ll have to appear in court, like the Italian government, which the EU fined. It is a good idea, but has never gotten anywhere.

What about immigrants? Many of them are ambitious for their children. Will they change things?

Immigration is a positive thing. It will not cause the change but it will facilitate. It depends on which kind of immigration and integration. Islamic integration is not like this. In the U.S. you have immigration from Europe, Asia and Latin America. Muslim immigration is only a small part. Here, the Muslim part is greater, and it is not going to be easy. So immigration may be less have less of an impact. But it will be positive.

This makes me wonder if Italians really do want to change.

The problem is the country, the system. When Italians go abroad, they become responsible. But what can you do?

I’ve met a lot Italians I would never normally have met, like teachers, and I was amazed to see that Italians are very prone to change. They can adapt. The problem is the lack of information and education. This is disturbing. This country has great resources, smart people, tradition, art and culture. It has beautiful landscapes. Tourism could be great.

Think of Singapore, which has no resources, nothing. Look what it did, thanks to meritocracy. So think of what we could do with better leadership. There are so many opportunities. Italy could do fantastic things. This is why meritocracy is so important for getting proper leadership in place. That’s why I wrote the book.