Our view 2010

OurView’10

Bocconi. Empowering talent.

An exclusive collection of articles by the Bocconi Faculty

on the world economy,society, environment,

technology and more.

Copertina Our View:copertina.qxd 14/01/2011 15.20 Pagina 2

Contents*

World Economy Global Recession Is Affecting the World Food Program 3 by Leonardo Borlini EU vs US over Open Skies 5 by Stefano Riela Of Organic Apples and Oranges 7 by Enzo Baglieri The Underground Economy Slows Down the Integration of Immigrants 9 by Carlo Devillanova Five Months of Electoral Campaign in One of the World's Largest Democracies 11 by Antonella Mori China Rising 13 by Carlo Filippini A Dangerous Country with an Uncertain Future 15 by Giorgio Brunetti What If Obama Were the New FDR? 17 by Giuseppe Berta

Management Media Coverage Is for Sale 21 by Diego Rinallo ______________________________________ * Our View is a selection of articles previously published in the Bocconi Newsletter. Articles are available on the web on ViaSarfatti25.eu, the Bocconi online newsmagazine, at the following address: www.viasarfatti25.eu. Translations by Office of International Communication.

Europe Will Also Be Affected by US Healthcare Reform 23 by Giovanni Fattore Champions of Earnings 25 by Dino Ruta Drop the Mantras of Contemporary Management 27 by Francesco Castellaneta The Profile of Companies Weathering the Crisis 29 by Giovanni Valentini Getting Back to Basics Is Getting Business Back on Its Feet 31 by Paolo Preti Companies Are Still Investing in Promising Resources 33 by Claudia Tamarowski It's Not Only about Low-Cost: Prices Are Polarizing 35 by Sandro Castaldo Working as Business Innovation Manager 37 by Silvia Zamboni Super-Sponsored Sports 39 by Paolo Guenzi Institutional Factors and Competitiveness Determine Where Cars Are Made 41 by Carlo Alberto Carnevale Maffè Bringing Craftsmanship Back into Fashion 43 by Stefania Saviolo The Lone Man at the Top Doesn't Come Out on Top 45 by Beatrice Bauer and Massimo Magni Intangible Assets: You Can't Touch Them, but They Make the Difference 47 by Francesco Perrini Going to the Beach on the Other Side of Globe 49 by Magda Antonioli

Invention: Learning by Doing 51 by Raffaele Conti, Alfonso Gambardella, Myriam Mariani Europe, America, China: Each is Global in Its Own Way 53 by Margherita Pagani Revealing Secret Recipes 55 by Giada Di Stefano and Gianmario Verona Entrepreneurs, Listen to Lao Tzu 57 by Thanos Papadimitriou and Brett Martin

Society and Culture Work Turns Liquid and Overflows 61 by Vincenzo Perrone Moms Are Public Opinion 63 by Paola Dubini European Museums: A Common Idiom for the Contemporary 65 by Stefano Baia Curioni Stagnating? Certainly Not Culture! 67 by Anna Merlo Politics as a Profession in Italy 69 by Alex Turrini and Giovanni Valotti Sickness and Health Are Becoming Global 71 by Eduardo Missoni Art: The Usual Exaggeration 73 by Stefano Baia Curioni Once upon a Time There Was Photojournalism 75 by Marina Nicoli Italy Lags Behind in Women at Work 77 by Paola Profeta

The Economics of Influenza 79 by Guido Alfani and Alessia Melegaro

Energy, Environment & Infrastructure Climate Change: Everybody Waiting 83 by Luigi De Paoli Italian Infrastructure: Priorities for North and South Are Not the Same 85 by Lanfranco Senn Renewables, Golden Opportunity 87 by Clara Poletti and Arturo Lorenzoni Oil Safety: Lessons from the Nuclear Industry 89 by Emanuele Borgonovo

Technology and Innovation If Users No Longer Generate Content 93 by Luigi Proserpio Collaboration Is Now Making Hardware Easier 95 by Emanuela Prandelli and Gianmario Verona Control Freaks Fail Online 97 by Silvia Vianello Now that the E-book Is Here, Let's Make Books 99 by Paola Dubini Web 2.0 and Gen Y: the Hidden Truth 101 by Leonardo Caporarello and Giacomo Sarchioni

Finance Overly Expansionist Sovereigns 105 by Carlo Filippini Do We Really Know How to Measure Family Wealth? 107 by Stefano Gatti Why Young People No Longer Trust in the Honesty of Accountants 109 by Mara Cameran e Ariela Caglio The Altruism of Saving 111 by Brunella Bruno The Phenomenology of Business Scandals 113 by Alessandro Zattoni Calculating Regret 115 by Alessandra Cillo How to Hedge Your Bets for a Toast of Burgundy Pinot Noir 117 by Claudio Zara

Law The Crisis Has Broken a Convergent Path 121 by Maurizio del Conte Made in Italy Protected by Law 123 by Giorgio Sacerdoti The Union Has Only Blunt Tools to Impose Budget Discipline 125 by Claudio Dordi Can I Upload or Not? 127 by Oreste Pollicino

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Global Recession Is Affecting the World Food Program by Leonardo Borlini

After being in the limelight for much of the 2000s, the attention lavished on the UN program against planetary hunger and malnourishment seems to have vanished, as donor countries are retreating from their commitments.

The silence of global media has fallen over the implementation of the commitments made by countries within the scope of the UN World Food Program, which was established a decade ago to face the food crisis affecting a growing share of the world population. The lack of news over the last year is problematic. Although these are unilateral commitments by UN members and are at best forms of soft law, media gave the World Food Program attention until mid-2007. Also, job applicants to international development agencies, including the World Bank, were interviewed on the content and reach of the World Food Program. Fishing for data, one finds a telling figure: given the billions and billions of dollars spent to rescue banks and counter the financial crisis, the original $12.3 billion pledged to fight world hunger are being downscaled because of the macroeconomic difficulties many donor countries are facing. What can be done to reduce to a minimum the likelihood of another crisis as damaging as this one? Jacques Attali, George Soros and Joseph Stiglitz, i.e. a grand commis, a global financier and philantropist, and a Nobel economist, respectively, concur on a fairer distribution of income and wealth as the main preventive measure to be taken in order to avoid the recurrence of a world recession. A less unequal income distribution would obviate the need to take on large quantities of debt (which is then repackaged and sold by others on global financial markets) to finance primary needs. This would be a forward-looking policy to be collectively decided and widely implemented at the international level, along with the reforms in global governance listed by the recent UN Conference on the World Financial and Economic Crisis and Its Impact on Development. However, the political mechanisms leading to a collective framework orienting individual economic decision-making and self-interest have yet to be found. Recent UN reports are not even making the news, but they say the governments of donor countries are suspending the implementation of the program to feed the world’s hungry. The World Food Program was

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launched long before the global recession to guarantee one of the four fundamental freedoms listed by Franklin Delano Roosevelt in 1941: freedom from want. The Author Leonardo Borlini teaches International and European Law at Bocconi.

From Bocconi Newsletter no. 82/2010

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EU vs US over Open Skies by Stefano Riela

In the highly competitive global market for commercial aircraft, the clash between Boeing and Airbus inevitably ended up in the WTO court. An initial ruling was issued, but the transatlantic rivalry could end up providing a new framework agreement stipulating rules valid for all players.

The aircraft market is special because of its huge size and level of concentration. It’s also interesting for being at the center of a long-running feud between an American and a European company. The recently tested 787 Dreamliner by Boeing has been the American answer to Airbus A330, which has sold over 600 units to date and is being upgraded into the A350. The Airbus family has planned for an expansion of its offer, which includes the A380, the world’s biggest airliner and direct competitor of the best-selling Boeing 747, which is also being upgraded. The transatlantic battle started in the 1980s when Boeing acquired McDonnell Douglas. The Federal Trade Commission approved the deal, while the European Commission did only very partially. Brussels wanted more transparency and less reliance on government support, especially for military procurements, in order to prevent the abuse of market position on the European market by the new player. After Airbus was born, it soon emerged that the tie linking Boeing to the US federal government was as tight as the budding relationship between the new aircraft company and major European governments, so much that a bilateral agreement in 1992 committed both parties to reductions in government subsidies: Airbus should not receive aid in excess of one-third of the production costs for the new models, while indirect government aid to Boeing should not exceed 4% of its receipts. This threshold has been surpassed by Airbus, Boeing claims, for the manufacturing of certain components of the A300 family, since various EU countries gave subsidies for $4.7 billion to the aircraft maker. On 6 October 2004, Boeing decided to take Airbus and the EU to the WTO court. This occurred at the moment when Airbus

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was surpassing Boeing both in terms of orders (256 more in the 1998-2004 periods) and deliveries of new planes (59 more in the 2003-2004 period). It is true that the public-private nature of Airbus is self-evident. It a company regulated by French law which is owned by EADS, a Franco-German group (with lesser Spanish involvement) in which private companies and public actors (including the French and Spanish governments) hold stakes. In September 2009, the WTO sent its confidential ruling to the EU and the US. According to media leaks, the WTO appellate body ruled in favor of the claimants, the US and Boeing, in 30% of the instances and against government aid received by Airbus. So at halftime, Boeing seems to be ahead in the game. But this could end up being a pyrrhic victory, because the US company is seriously behind schedule with its new projects, by two years in the case of the Dreamliner, which could cost heavy penalties on its 800 orders. But the second half still needs to be played and final ruling has not yet been made. The game could even go into overtime, if Airbus appeals. On the same day that the US deposited its complaint, the EU fought back by denouncing the subsidies that the federal government is giving Boeing through NASA, the Department of Defense, the Department of Trade, several other government agencies, and also through export subsidies (forbidden by the WTO), tax exemptions, and the financing of infrastructure and product development. The lengthy process to arrive at a final WTO judicial ruling could favor the renegotiation of the 1992 bilateral agreement, by making it more flexible. The new agreement could go beyond the transatlantic relation and set rules for other countries currently developing their domestic aircraft industries. For instance, Canada’s Bombardier and Brazil’s Embraer are winning market share in the regional aircraft segment hitherto dominated by Boeing and Airbus, while Japan, Russia, and China are developing ambitious projects. Summing up: the duopoly ruling over global skies is alive and well, but new players are coming to the fore on the political and economic scene. The Author Stefano Riela teaches European Economic Policy at Bocconi.


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Of Organic Apples and Oranges by Enzo Baglieri

Localism and organic labelling are causing a lot of confusion, making it difficult even for the most scrupulous consumers to evaluate the overall environmental, health and community impact of their produce purchases, whether at the farmers’ market or the supermarket.

The fear of animal pathologies, higher sophistication in food purchases, the return to forms of local identity are all driving the demand for “sustainable” forms of consumption. For instance, “Zero-kilometer markets”, where local produce is exclusively sold are being introduced in the Veneto Region, under the sponsorship of Coldiretti, Italy’s biggest farmers’ organization. This has favored the emergence of a zero-kilometer supply chains and networks of producers, and many are pondering the introduction of a “sustainability label” in this regard. The Regional Law 7/2008 favors the purchase of local foods to feed nurseries, schools, hospitals, and the like. However, one should not consider “local” a synonym for “sustainable.” Over the last 50 years traditional methods of cultivation and rearing have been outmoded by the strong mechanization of agriculture, reliance on artificial fertilizers and chemical pesticides, selection of varieties for aesthetic appeal and transportability. These developments have been pulled by the need of higher productivity to supply supermarkets and urban and suburban consumers. The growth in large-scale retailing has in turn favored a globalization and concentration of agricultural suppliers, while supermarket chains have seen their bargaining power increase vis-à-vis agricultural producers. There is however no guarantee that a local product is by definition sustainable, because there only few producers that don’t rely on tractors and hydrocarbon-based fertilizers. Also “organic” food (biologico, in Italian) is not necessarily sustainable, if distribution chains are long and logistics is heavy in fossil fuels. The rise of farmer’s markets and home delivery of local foods will continue to blur the distinction between territoriality and sustainability, as long as an objective certification of the sustainability of the processes and technologies of cultivation, grazing, manufacturing and transportation is not available. The emphasis should those go on designing controls for zero-kilometer produce that have the same standards of safety and quality that the longer supply chains of agribusiness must satisfy, albeit at the cost of a lesser

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freshness and tastiness of their products. However, the consumer must also play her/his part in ensuring that production, transportation and distribution are sustainable, by not demanding cherries in January and oranges in June, for a start. The Author Enzo Baglieri is Assistant Professor of Corporate Economics and Management at Bocconi and Head of SDA Bocconi’s Operations and Technology Management Unit. He received the ITP diploma from the Stern School of Business of New York University, N.Y. (USA) and was Visiting Professor at the University of São Paulo (Brazil) in 2002. Research Areas Management of technological innovation processes. Management of new product development processes. Project management. Strategic management of relations with suppliers.


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The Underground Economy Slows Down the Integration of Immigrants by Carlo Devillanova

Immigrant workers are present in every region of Italy. Scattered empirical evidence points to a certain territorial disparity in integration processes. The imbalance could be due to the heterogeneity of social polices and to sharp differences in local tax bases.

Little has been written about territorial differences in integration among Italian immigrants. Recent events suggest that there are significant differences between the North and the South of the Peninsula. This impression seems to find confirmation in a recent study edited by Cesareo and Blangiardo on the “Indicators of integration”, which shows that an integration index displays lower values on average in Southern provinces. The factors behind territorial specificities in integration processes are manifold. One could be the difference in the ethnic composition of immigrants in various Italian regions. Very relevant are also disparities in social policy, both in general terms and relative to the plea of refugees, which are delegated to local administrations and are therefore an expression of their political decisions, as well as differences in tax bases. As far as I’m concerned, I’m persuaded that the integration of immigrants in its various dimensions is strongly favored by a correct entry into the labor market, in jobs that employ their skills and facilitate upward social mobility. It is worth noting that overeducated job candidates are much more frequent among immigrants than Italians. Recent ISTAT estimates that 12% of the labor force works under irregular or unlawful conditions; this figure doubles when referred to the South. Off-the-books, underground labor pushes immigrants toward low-skill, underpaid jobs and negatively affects their integration, in terms of housing, health, access to education and culture. Being an informal worker means not to have access to papers guaranteeing a legal presence on the territory, thus perpetuating conditions of irregularity. These in turn often generate blatant phenomena of social exclusion. This is all the more true in the areas of the country where the underground economy is more widespread.

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Concluding, I think that reducing informal labor can facilitate integration processes and, at the same time, reduce territorial differences in this domain. The absence of realistic channels of legal immigration into Italy, the emphasis on border controls, the strong link between having a labor contract and maintaining regular immigrant status, the recent introduction of the crime of clandestinity are all measures that make foreign workers easily vulnerable to blackmail on the labor market, with grave consequences for all other aspects of integration. The culture of the respect of labor laws must be heavily strengthened, increasing the number of workplace controls and devising a system of sanctions that provides an incentive for the immigrant (or Italian) irregular worker to cooperate with state authorities. The Author Carlo Devillanova is Associate Professor of Economics at Bocconi. He has also taught Macroeconomics for the Master of Business Administration at SDA Bocconi, and has worked as a researcher in Finance at the University of Trieste and an Associate Professor at the Pompeu Fabra University, Barcelona. Research Areas Public economics. Migration. Economics of labor.


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Five Months of Electoral Campaign in One of the World’s Largest Democracies by Antonella Mori

Brazil is projected to grow by 5% in 2010, but Lula is having problems projecting his personal popularity onto his own party’s candidate to succeed him. This difficulty allows the opposition candidate to make the unusual claim that change will bring continuity.

It will take months of fierce campaigning to win the minds of 130 million Brazilian voters in the presidential elections scheduled for October 3, 2010. The electoral contest is between Dilma Rousseff, candidate for the PT, Lula’s Workers’ Party, and José Serra, candidate of the PSDB, moderate social-democrats, the main opposition party. Polls have been consistently giving Serra an advantage, although the gap has closed in the last few weeks. Now Serra leads by 5 to 10 percentage points. But the opposition will have to fight hard to score a victory. Dilma Rousseff is Lula’s candidate, and Lula has 80% approval ratings. Brazil was among the last economies to be hit by the recession and among the first to resume growth: GDP grew by 1% in 2009 and is forecasted to grow by 5% in 2010. It’s not only good economic news that support the president’s popularity. Since the start of his mandate, Lula has put the struggle against poverty and social exclusion at the center of his government’s program. His welfare programs have had a huge impact on 11 million of Brazilian poor families. It’s only logical he wants to transfer this political capital to Rousseff: it’s not yet sure if and when it will occur. Serra presents himself to voters as the candidate that can ensure that Brazil stays on the growth path blazed by Lula (“Brazil can do more” is his slogan). Although in the opposition, Serra styles himself as a continuity candidate, building on his good record as governor of the Paulista state. Lula and the Workers’ party are trying to persuade voters is that the results obtained depend on a progressive political philosophy that only Dilma Rousseff can carry on. Lula is in fact highlighting the gulf separating him from his predecessor Cardoso, who

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belonged to same party as Serra. In order to show his penchant for leftist policies, Lula could energize industrial and social policy. There are growing signs of this in the last few months: the Vale mining company has been pressured into buying Brazilian steels and ships for its production needs; the proposal is on the table to constitute a sovereign fund fueled by oil receipts and investing in education and social and environmental protection. It’s not by chance that on March 29, just before Rousseff resigned from Lula’s cabinet (as the electoral law requires), Lula announced the second phase of the Program for Accelerating Growth (Pac2), which calls for infrastructural investment to the tune of $880 billion, 60% spent over the 2011-2014 period. If elected, Rousseff would be in charge of Pac2, after overseeing the first phase launched in 2007. The next presidential elections are also very important for Italy, not only for the cultural links connecting the two countries (30 million Brazilians have Italian origins), but also because on January 1, 2011, the year devoted to “Italy in Brazil” will start, together with the new presidency. It will be unique opportunity to strengthen the economic and cultural relations between the two countries. The Author Antonella Mori is a Researcher in Economics at Bocconi at the Department of Institutional Analysis and Public Management and the ISLA Center for Latin-American Studies and Transition Economies. She is part of the teaching faculty of the Master in Diplomacy at ISPI, the Institute for International Political Studies in Milan. From 1995 to 2001 she taught Macroeconomics at the SDA Bocconi MBA. Research Areas International economics. Economic development. Latin America.


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China Rising by Carlo Filippini

The country’s regained hegemony in East Asia is the latest chapter in its historical rivalry with Japan. From the promotion of an alternative economic model to the assertion of strategic and military security, China is re-establishing the leading position it has held over the millennia.

Eight hundred years ago China tried to consolidate its influence on Japan. It demanded that the neighboring nation pay a tribute and acknowledge imperial authority. In those times, that was the way of manifesting political and economic hegemony. But a typhoon – kamikaze, the divine wind –dispersed its fleet. Three hundred years later, it was the turn of Japan, just reunited, to attempt conquering China. This attempt also failed for a similar reason: failure to control the sea. The two great powers of East Asia have always had deep but competitive relations: China was the source of culture, philosophy, religion (ideograms, the arts, Buddhism, Confucianism). However Japan never really imported or copied them; it always adapted them to its mentality and needs. We can think of the “rewritten” ideograms, which became a new script of its own, while in other tributary nations of China they were left unvaried and used by cultivated elites in parallel to the vernacular. Since the end of the 1800s, the roles have been inverted: Japan fused Western techniques with the Japanese spirit, becoming the second economic power of the world. This rapid growth has almost cancelled the former sense of cultural dependence. Over the last years, China has been impetuously regaining the position of hegemonic power it occupied for centuries, historically in Asia and foreseeably in the world. Many are the symptoms of growing Chinese regional and global influence: the study and reappraisal of Confucius, of Mao, the system of socialist values with Chinese characteristics all underline the growing confidence in its cultural identity which accompanies the progressive distancing from either political (Marxism-Leninism) or economic (capitalism or the free market) ideologies imported from the West.

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The Western democratic model (a bit tarnished by the current crisis) is challenged by the Oriental developmental model of Confucian origin, where the boundaries between market and government, public and private are grey and uncertain: power must promote the welfare of subjects, and these in turn must give obedience to authorities. The concrete expression of such sentiments is the opening of hundreds of Confucius Institutes all over the world with the aim of spreading the knowledge of the Chinese language and promoting cultural, educational, and economic cooperation between China and overseas communities; the institutes are generously funded by Chinese authorities. At the opposite extreme there is the strengthening of the military navy and the creation of the “necklace of pearls”, installations of various kinds from China to the Suez Canal, which have the objective of securing the supply of oil and raw materials, without which China would see its growth strangled: as of 2009, half of China’s oil was imported. Countries and even continents that until recently had been considered hunting grounds reserved for Western powers, such as Africa, or even Latin America, now see a rapidly growing Chinese presence: the medium-low technological level of Chinese products seem to better fit the needs of African consumers; Chinese investments are not constrained by conditions on workers’ rights or the environment (unlike international organizations and Western nations investing there). Other aspects of the emerging Chinese leadership are better known and certainly more important: the extent of its foreign currency reserves, the size of its domestic market and its export capabilities. In the near future, a Chinese could well sit in the IMF’s control room. Naturally, today the world has become multipolar, and there are several strategic players. Right now a system with China at the center and a periphery of tributary states is unthinkable, but a few decades down the road... The Author Carlo Filippini is Full Professor of Economics at Bocconi, where he was Director of ISESAO, the Center for East Asian Economic and Social Studies and MEc, the Master in Economics. He is a Professor of Economics at SDA Bocconi, as well as a member of their Advisory Committee. He has also taught at Universtià degli Studi in Trento. He is a member of the American Economic Association, the Royal Economic Society, the Italian Societiy of Economists and Christ’s College in Cambridge, UK. Research Areas Economic development. Technical progress. The Japanese economy. Economic integration of Southeast Asia.


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A Dangerous Country with an Uncertain Future by Giorgio Brunetti

Guatemala: the Central American country is still under the uncomfortable influence of the United States, as can seen by its fleets of ancient American cars and buses. Drug trafficking and gang warfare have provoked more than 10,000 dead: more than its long civil war.

In Guatemala, the tormented republic in the heart of Mesoamerica, the casual visitor is struck by the quantity of yellow school buses roaring across the country’s roads. The foreign traveler could be led to believe that this is an expression of the national fight against illiteracy and poverty plaguing the country: nothing could be farther from the truth! These are vehicles bought on auction by enterprising individuals who refurbish them in order to provide rides at competitive rates to the general population. These former US school buses are then leased to drivers who push them to the max in order to take home a modest wage. They are jokingly called “chicken buses”, because peasants often bring their poultry on board in this predominantly rural nation. In addition to school buses, Guatemalans buy used cars from the US. They clog the roads of the country, which are perennially being repaired, especially in the plateau where landslides are frequent. From Puerto Barrios-Izabal, Guatemala’s only port on the Caribbean, they are imported into the country by locals and foreigners alike. These are noisy, polluting wrecks which feed a whole related industry, consisting of repair shops and spare parts resellers. Two maya kids being photographed by a gringo. This image sums up well the country’s position vis-à-vis the United States, which is not only a source of used buses and cars, but much else besides. The strong presence of US capital in the archetypal banana republic is one thing. Then there is the accumulated US demand for cocaine, since drug traffickers use the eastern regions of the country to transfer the product from Colombia up north. Not coincidentally, these are the regions that appear less poor. Lastly, the US is a prime destination for Guatemalan immigrants and a precious source of dollar remittances. The Obama administration is cracking down on illegal immigration, with the unstated aim of containing the growing Latino presence.

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Other problems worsen the country’s already precarious predicament. One is human trafficking, especially of women and children, which is as frequent as drug trafficking. According the UN, it will soon surpass the illegal drug and arms trade. Another is gang warfare, a bitter leftover of the civil war, which left behind many men whose only skill is firing weapons. On the side of the law or against it. In 2009, almost 10,000 murders were committed, more than the deaths caused by the civil war, which ended in 1995. Guatemala has long been prey of multinationals and businessmen with few scruples. The country is still a tax haven. After tourism and oil, coffee is the main export. Even Illy buys Guatemalan coffee. While Colombia and Venezuela are making strides, a solution to this country’s huge economic and social problems is not in sight. Guatemala suffers from a fragile and corrupt state, which is unable to fulfill its responsibilities in terms of democratic security and education of the younger generations. From Tegucigalpa, the future looks uncertain and dangerous! The Author Giorgio Brunetti is Professor Emeritus of Corporate Strategy and Policy at Bocconi, where he has taught since 1992. Up to then, he spent most of his academic career at the University of Ca’ Foscari in Venice, where he graduated in 1960. He has taught at SDA Bocconi, training companies and organizations such as CUOA, Politecnico of Milan, FIAT-Isvor, IFAP and IRI Management. He has also acted as a corporate consultant at large companies in leading industrial and banking groups, as well as board member for several companies. Research Areas Economics of small and medium enterprises. Corporate governance and controls. Policies of assistance for small and medium enterprises. Application of networking technologies by district.


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What If Obama Were the New FDR? by Giuseppe Berta

The task force led by Steven Rattner to rescue the American auto industry has parallels with the age of Franklin Roosevelt’s New Deal, as it encourages collaborative interdependence between business, labor and government rather than imposing regulation from the top down.

Are there traces of the New Deal in the current US administration? President Obama, so often reprimanded for his economic interventionism by the republican opposition to to the point of being accused of socialism, can he be seen as a heir of Franklin Delano Roosevelt? At first sight, the parallels are not obvious. The New Deal did not match the current Fed’s expansionary stance in monetary policy, and Obama, unlike FDR, has not launched major public spending programs. However, attitudes and proclivities of the Obama administration have elements of that tradition, since it revives the great democratic tradition of the 20th century. The latter aspect emerges from the pages of the book that describes the modus operandi of the Obama team, looking at the forms of government intervention achieved during the trough of the crisis. The book in question was authored by Steven Rattner and is titled Overhaul. An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry (Boston-New York, Houghton Mifflin Harcourt, 2010). Rattner, a former journalist who went to work on Wall Street, where he became a successful investment banker, is the man chosen to lead the task force appointed by Obama at the start of his mandate to rescue two of Detroit’s Big Three: General Motors and Chrysler, whose survival was seriously threatened. Rattner was put in charge of an agile organization with a time-limited mandate created within the Treasury, whose mission was to organize and manage the $82 billion bailout: the largest in US postwar history. It was a very difficult task which Rattner successfully accomplished, who renounced to a Wall Street’s million-dollar bonuses and burdened himself with huge responsibilities for a modest government salary. What puts the automotive industry task force in the tradition of the New Deal is the fact that it was a special agency, acting in relative autonomy with respect to the presidential administration and thus capable of rapid and flexible decision-making. Also, Rattner in a sense revived that triangular structure between Big Government, Big Business and Big Labor that was a feature of the New Deal, since he had to maneuver between the GM and Chrysler executives and the still powerful UAW, the union of auto workers born during the New Deal that had

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helped Obama win the election in the Midwest. And there were furious car dealers, stockholders and bondholders to be appeased, as they feared to lose everything. The system was not one of direct government regulation or control. It was in effect a system of bargaining among the various actors brokered by the task force. It was a method that stressed interdependence rather than coercive regulation. A forward-looking vision of an organized and dynamic pluralism, which revives the great lessons of the liberal tradition of the 1900s. The Author Giuseppe Berta is Associate Professor of Contemporary History at Bocconi, where he is Director of the ENTER Center for Research on Entrepreneurship and Entrepreneurs. He was one of the founders of ASSI Associazione di Storia e Studi sull’Impresa where he was President from 2001 to 2003. He was head of the Fiat Historical Archive from 1996 to 2002. He is also part of the steering committee of the Biographical Dictionary of Italian Entrepreneurs, edited by the Italian Encyclopedia Institute. Research Areas History of industry. History of the economic élite and representation of interest. Business and politics.


Management

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Media Coverage Is for Sale by Diego Rinallo

Fashion: the back door to high visibility. Buying ads warrants press attention and gets you on the front page.

The media pay attention to many categories of products and services, and the generated visibility significantly influences consumers and their spending behavior, since media are acknowledged as having information neutrality. If, however, we consider that most of media revenues are generated by paid ads, it’s natural to wonder whether decisions are free from bias within these organizations when they cover the products and services of advertisers. It’s a vital issue that impinges upon freedom of the press, the autonomy of journalists and objectivity in newsreporting. In to a recent study with Suman Basuroy of the University of Oklahoma, we have explored a sample of 291 Italian fashion companies, for which we have gathered data on advertising spending and editorial visibility in the magazines published by 123 Italian, French, English, German, and US publishers, in addition to a host of control variables. The findings point beyond doubt to the fact that corporate advertisers receive preferential treatment and obtain media visibility that is approximately proportional to their investment. The phenomenon is more marked in specialized fashion magazines. Apparently, general media are a bit freer in their editorial choices, because their advertising base is wider. There are however significant differences among various brands in their ability to obtain visibility for a given level of investment. It’s harder for smaller firms to be out there, even if they spend a lot for advertising. Conversely, more innovative firms get proportionately broader media coverage The implications of the study are manifold. Firstly, in capitalistic economies advertising is a major force able to shape media content. This does not necessarily damages the consumer, though. If big spenders, as it often happens, market good-quality products, consumer welfare could even be improved because of this. Only

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when inferior products enjoy high levels of “compensatory” advertising, are consumers penalized. The study also suggests that the impact of advertising on sales is probably underestimated. Insofar as media coverage drives sales, advertising campaigns have a direct effect on sales plus an indirect effect via media hype. Looking at managerial implications, firms have several strategies at hand to maximize media visibility for a given level of investment in advertising. Firstly, media pay greater attention to innovative products, which are a better source of news. It’s smaller firms that stand to benefit the most from this hunger for constant novelty. Secondly, firms should consider that there are differences among media outlets in terms of advertisers’ influence. Companies focusing on specialized media are likely to get more coverage, especially in certain markets: for instance, per euro spent, Italian companies got more extensive coverage in US fashion magazines than in French magazines The Author Diego Rinallo is Assistant Professor of Corporate Economics and Management at Bocconi, where he is also an analyst for CERMES, the Center for Research on Markets and the Industrial Sector and a faculty member of MiMec Master of Marketing and Communication. Research Areas Marketing communications and branding. Marketing events. Fashion trade events. Theory of consumer culture.


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Europe Will Also Be Affected by US Healthcare Reform by Giovanni Fattore

If Obama’s reform passes, universal coverage models will be rule among advanced economies, making it more likely that emergent economies will also embrace universal healthcare systems. However, Big Pharma raises the spectre of a drop in R&D spending due to lower prices.

Obama’s proposal for healthcare reform addresses two critical aspects of the US health system: controlling spending, which has gone out of control, and the absence of any form of health coverage for 15% of the population. Both issues are complex, and if Obama manages to solve both he will have pulled off an astounding feat and will have secured a place in American social history. On the other hand simple accounting shows that a system that spends 15% of GDP and leaves 40 million uninsured, is not only unfair, it’s highly inefficient. First of all, comparatively higher spending does not translate into comparatively better health. Higher US spending is mostly due to higher administrative and insurance costs, costlier factors of production (skilled labor, medical technologies and pharmaceuticals) and malpractice lawsuits (doctors need to buy costly insurance to protect themselves from them). It’s also a waste providing health care to uninsured people, who often have to be treated in emergency rooms at a higher cost. If common sense suggests that a reform is necessary, the analysis of the entrenched interests at play gives pause for thought. 15% of GDP going to healthcare also means that one seventh of the country’s incomes come from there, which means that enormous political stakes are involved. The majority of physicians, insurers, hospitals, pharma companies and medical suppliers are doing all they can to block the reform or diminish its impact. It also must be remembered that the uninsured are the poorer minority of the population, having little voice and less clout in American politics. On the other hand, the fear that the quality of healthcare provision will be lowered among those already insured makes many in the middle classes hostile to any vision of solidarity, which is traditionally not very strong in most of the United States. However, US healthcare not only has domestic repercussions, but also international implications. If Obama succeeds the policy spillovers could be considerable. If Obama were to warrant universal coverage in healthcare, the symbolic effect would be considerable, since the last bastion of private healthcare among

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advanced countries would fall. Universal systems would thus become the models to be imitated by emergent economies. For Europe, the effect would be to sanction existing government-funded universal healthcare systems to the detriment of those in Eastern Europe who still favor privatized healthcare. A second international effect would be on global health industries, Big Pharma in particular, which claims that the high prices it secures on the US market are vital to fund R&D. If Obama were to succeed in controlling prices, would it negatively affect biomedical research? Would there be repercussion on the prices of drugs on the European market? It’s hard to make forecasts on the global effects of Obama’s reform, but one thing it’s sure: it will have significant repercussions on the rest of the world. The Author Giovanni Fattore is Associate Professor at the Bocconi Department of Institutional Analysis and Public Management. He was Director of MIHMEP, the Master in International Healthcare Management Economics & Policy from 2002 to 2008. He is a member of the faculty of the PhD in Business Administration & Management and a Professor in the Public Management and Policy Department at SDA Bocconi. He is a member of the Management Committee of CERGAS, the Center for Research on Health and Social Care Management and the Carlo F. Dondena Center for Research on Social Dynamics. He is also member of the editorial board at Pharmacoeconomics Italian Research Articles and Politiche Sanitarie and is currently President of the Italian Association of Healthcare Economics. Research Areas Health management. Health policy. Comparative analysis of health systems. Pharmaceutical policy. Cost-effectiveness and cost-benefit analysis. Research methods for management. Performance management in public institutions. Governmentablity.


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Champions of Earnings by Dino Ruta

Winter Olympics in Vancouver: What will remain after 2010? The economic potential of sport has multiplied thanks to media and sponsors. The globalization of sports is big business, but the social and urban benefits of hosting games should not be underestimated.

In late months of 2009, notwithstanding the crisis, 1,000 delegates attended the London Sport Conference. Polls conducted on them have shown that revenues are on the increase, particularly sponsorships. Sports arrive ever more easily into people’s homes and each sporting event maximizes its economic return by exploiting the visibility of its protagonists. Sport is used a platform for national and international communication. For instance, Liverpool will promote Spain as “Official destination partner”, since its manager is a Spaniard, and so are many of its players. UEFA has just signed a €32 million agreement to broadcast the Champions League in Croatia, although the country does not have very strong football clubs. Giro d’Italia is internationalizing its appeal with sites and athletes that are well-known around the world to stimulate media purchases. The value of sporting events has grown dramatically with TV rights and the global popularity of certain sports whose appeal was recently only local. The globalization of sports events, which started with Olympic Games and the Soccer World Cup, is now spreading to other competitions. The study on the potential economic impact of having a Formula 1 Grand Prix in Rome, cites €1 billion in terms of value added and 10,000 jobs created. Rome recently hosted the World Swimming Championships and has made €45 million in revenues just for having hosed the Champions League finals last May. Hosting a major sport event requires large investments in infrastructure and often involves the revitalization of cities and neighborhoods. The planned investment of Chicago, had it won the competition to host the 2016 Olympic Games, would have been €3.3 billion, generating revenues for €3.8 billion. Milano was European sport capital in 2009, hosting 60 sport events where athletes from 120 nations competed.

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Sport events not only generate economic returns, but yield additional urban, social, and political benefits. The 2009 edition of the Tour de France was physically followed by 15 million people. After the Olympics, it is the world’s favorite live sport event. Milano’s candidacy to Expo 2015 is a byproduct of Olympic planning. Turin after the 2006 Winter Olympics has become specialized in managing big sport competions. Summing up, one need to look not only at the economic impact, but needs to consider the intangible effects that remain on the ground after the event is over. Vancouver, host of the currently unfolding 2010 Winter Olympics, has seen the foundation of “2010 Legacy now”, the first organization of its kind working on developing sustainable heritage in terms of sports, arts, entertainment, philanthropy. These are opportunities for cultural managers that are attentive to the needs of stakeholders. Of course they shall not forget that when it comes to sport, l’important c’est de participer. The Author Dino Ruta is SDA Bocconi Professor of Organization and Human Resources Management and Scientific Director of the International Master in Management, Law and Humanities of Sport (FIFA Master). He is also Assistant Professor of Organization and Human Resource Management at Bocconi, and Director of the MasterOP, Master in Organization and Human Resources Management. Research Areas Strategic HR. Sport management.


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Drop the Mantras of Contemporary Management by Francesco Castellaneta

Re-read classics by past experts like Peter Drucker, if you want to make sense of the current crisis and understand the unchanging elements of good corporate governance. Or follow management fashion and risk damage down the road to the company, shareholders and stock value.

Over the last two decades, management has been a bit like high fashion. From one year to the next you have to throw away expensive clothes because they have gone out of style. Management mantras end up being adopted by the majority of companies, but then fall out of fashion, and sometimes out of luck. The latest version of management by mantra says stock options and executive bonuses are bad, rather than understanding why and when have been misused or wrongly designed. Many managers, tired and disillusioned by management fads, have started to re-read last century’s management classics like Peter Drucker. One of his fundamental statements is that the objective function of a firm should be neither the shareholders’ nor the stockholders’, not any other simple objective: “The search for one objective is essentially a search for a magic formula that will make judgment unnecessary. But the attempt to replace judgment by formula is always an irrational act.” The compass for managers should be pursuing the good of the company, which means its short-term survival and long-term prosperity. The good of the firm must be should by looking at “what it’s right for the firm”, rather than what it’s right for shareholders, employees, or stockmarket value. If a decision is not right for the company, it is also not right for its stakeholders. Over twenty years ago, Drucker lambasted top management salaries that went beyond a 40:1 ratio with respect to wage-earners. Too large differences in personal earnings push executives to take decisions based on “partial optimizations” on a too-limited time horizon, thus endangering the long-term corporate health. When Drucker died in 2005, this ratio had skyrocketed to 400:1. He had come to believe such inflated compensations had become detached from the real value produced and had lost any relation with business

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measurements and long-term performance, and in the end would end up damaging shareholders themselves. Drucker’s most famous contribution to business literature, management by objectives, is based on the idea of linking compensation to performance. However this required a careful balancing of short-term profitability and long-term objectives. “Predictions concerning five, ten, fifteen years ahead a are always ‘guesses’. Still, there is a difference between an ‘educated guess’ and a ‘hunch’, between a guess that is based upon a rational appraisal of the range of possibilities and a guess that is simply a gamble.” Annual bonuses de-linked from long-term performance have pushed many managers to gamble with the money of shareholders. Eighteen months into the crisis, the nefarious consequences of management by mantra are clear for all to see. To get out of the present predicament, good advice for executives would be to re-read two fundamental books by Peter Drucker The practice of management (1954) and The effective executive (1966). Have a good read! The Author Francesco Castellaneta is a PhD candidate in Business Administration and Management at the Bocconi PhD School.


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The Profile of Companies Weathering the Crisis by Giovanni Valentini

Europe: the results of a poll conducted on 500 medium and large firms. Those who are managing to overcome the crisis have long invested in R&D as part of their corporate culture. Plus, a well-governed growth process appears more benefical than fast growth itself in resisting the downturn.

The crisis has been with us for a year and a half at least. Some say it is over, some fear it is not. It is unquestionable however that some companies have fared better than others, obtaining satisfactory economic performance where others are sinking. What makes them different from the rest? Which factors can explain their relative success and adaptability? With Laura Sobrero, I have looked at a sample of 500 medium-to-large European companies. Their 2008 profitability was put into relation with the strategic choices made by those firms over the previous four-year period. Checking for industry-related differences, we have found that regression analysis shows that two major factors are at the basis of these companies’ ability to weather the crisis. Firstly, the study highlighted the importance of sustaining sizable investments in R&D through time. It’s not enough to invest in R&D, even a lot, if it’s not part of a protracted effort. In fact, companies having lower variance in their investments have obtained better results. This means that innovation should not be limited to introducing a new product or a new service having an ever briefer lifespan on the market, but to develop internal skills over a longer period of time. This makes firms better able to withstand economic shocks. R&D must be a company policy which becomes a company’s culture. Secondly, more profitable companies have followed a peculiar growth path. One could be led to thinking that fast-growing companies prior to the crisis performed better than companies posting lower growth. The former could count on higher liquidity and stronger financial resources. Our research shows that there is an optimal growth rate for sales, beyond which negative effects prevail. There is a non-linear relationship between earnings and previous sales. The highest profitability is recorded for intermediate growth rates.

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Growing beyond mere survival is important, but growth is not the objective that should be maximized. Paradoxically, excessively high growth can undermine the bases of sustainable growth in the near future. These findings are useful in constructing strategies to steer business organizations out of the present crisis and be ready to face the next round of economic difficulties. The Author Giovanni Valentini is Assistant Professor of Strategy at Bocconi. Research Areas Competitive strategy. Innovative strategy.


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Getting Back to Basics Is Getting Business Back on Its Feet by Paolo Preti

When financial giants bite the dust, land onwership is restored to its former status and the value of quality basic products returns to the fore. A Sardinian shepherd turned entrepreneur shares some pearls of wisdom that tie into recent changes in the agricultural economy.

It was last September. As I was vacationing in Sardinia, I had found in a magazine the address of a farm shop which according to Slow Food was among the best on the island. The directions were sketchy: the turn-off for Portobello di Gallura was all I got at the phone, but was favorably impressed after talking to the owner. My wife and I got in the car for a 40-kilometer drive to what I thought was a normal retailer. We got lost and I had to call back a few times to ask for the way. When I found myself in the midst of nowhere and day was turning to dusk, I was finally told I was only a kilometer away. Behind a curve on the road, a lamp-post lit a two-floor building with a stocky man standing outside. On a wooden board, a hand-painted sign said: “Antichi Sapori di Sardegna” [Ancient Flavors of Sardinia]. Mario Usai is one of those entrepreneurs – although he would probably disagree with the definition – who are fun to meet. It wasn’t a shop, but a house of his property hosting one of his three retail points. Briefly, he told me his story. Sixty years of age, married to an accountant, eleven children ranging from thirty-two to twelve years. Usai lost both his parents as a child. With his grandfather (who went on to live until 107) he went to work as a servant-shepherd in remote Barbagia at the age of 14. He returned to Gallura years later with 25 sheep that were all his property. Today, he owns 200 hectares of pasture, and leases as many, 2000 milk sheep producing 300,000 liters of milk, 60,000 kilos of cheese, 250 cows, 50 goats, 30 horses, hundreds of pigs. The whole business, which includes a butchery, employs fifteen people and is worth a few million euros. In addition to a punitive work schedule since he was young, he followed two rules in life. One he heard from his grandfather: “Remember you have to

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buy either gold or land”, while the second he teaches to his children: “Value means your customers and the quality of your product.” With the crisis of tertiary sector, the primary sector is back in fashion: with financial markets at historical lows, ownership of the land goes back to its former status, not only in an economic sense but in a traditional sense. A brilliant agriculture minister, active farmers’ associations, firms run by young agricultural entrepreneurs, new modes of distribution such as “farmers’ markets” which match producers’ supply with consumer demand and yield significant savings, a renewed attention to service and product traceability, heightened interest in horticulture and organic vegetable gardens, which Michelle Obama has made highly fashionable, all these elements are driving a return to basics that is boosting the fortunes of the agricultural sector. The Author Paolo Preti is Professor of Organization and Human Resources Management at SDA Bocconi and Associate Professor of Corporate Organization at the University of Valle d’Aosta. Research Areas Organization of small and medium enterprises. Human resources management in SMEs. Entrepreneurship. international agreements. Growth and development of SMEs. Generational succession. Relations between families and companies.


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Companies Are Still Investing in Promising Resources by Claudia Tamarowski

Managerial education: a look at the evolution of business schools and their relations with companies, according to SDA Bocconi School of Management, which is in the top echelon of European executive education. The trend is toward tailor-made Corporate Master courses.

Companies increasingly demand managerial education which is both versatile and tailored to their specific needs: the necessity is to homogenize skills, deepen innovation and valorize talents. The common objective, via the personalization of content, is to give managers the right tools to deal with problematic situation, interpreting available data and information to support timely business decisions. One of the elements of tailored business education initiatives is the initial assessment conducted across the various corporate functions and continuous fine-tuning with the participants, aimed toward the facilitation of learning processes and the absorption of the models proposed. Usually, the first level of tailored business education is represented by non-specialist courses, which have the objective of creating an organizational culture oriented toward economic management. At the second level, there are educational tracks that are oriented to the various business professions and top managers. At this level, the stated objective of corporations is to develop long-term skills in managerial profiles. An indication of this development is the growing interest for Corporate Masters, the so-called Academies, i.e. long-term international programs having very ambitious objectives. These programs to develop corporate skills are usually two years in duration, and delve into interfunctional issues with tutored on-the-field projects. Corporate Masters are attraction and retention initiatives which show how, even during an economic crisis, companies are still willing to invest in their more promising human resources. An example is provided by Chiesi Farmaceutici SpA, a company which has decided to invest in customized executive education to cover the skills gap of its managers and make them more accountable with respect to economic performance. Thus,

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SDA Bocconi has strongly focused on the specificities of the pharma industry, by customizing issues and contents of the program accordingly. The Chiesi experience is a case in point about the value of continuous education, which is successful when it is stimulating, diffuse, and calibrated to the needs of the people and the requirements of the industry. The Author Claudia Tamarowski is a Researcher in Corporate Finance and Financial Analysis at Bocconi and a Professor of Accounting, Control, Corporate and Real Estate Finance at SDA Bocconi. Research Areas Corporate finance. Project financing. Asset allocation. Shareholders value. Financial communication.


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It’s Not Only about Low-Cost: Prices Are Polarizing by Sandro Castaldo

Market share of more expensive products is growing: in 2009, one out of three goods was priced 30% more than the average. In a context where cheap discount distribution is also gaining share, the middle ground is shrinking as consumer loyalty is courted by the extremes.

The logic of low-cost permeates many sectors of our economy. Low-cost has captured the growing interest of customers for no-frills goods and services. All you buy is an airplane ride: all other services are proposed separately (e.g. food, drinks), according to the logic of unbundling. In marketing, the phenomenon has been studied in terms of retail pricing policies, contrasting the Every Day Low Price (EDLP) with the High-Low (Hi-lo) pricing approach. The first characterizes the supply of retailers such as Wal-Mart, who have made low prices a key to their positioning. This way, long-term loyalty of consumers is usually encouraged, improving the company’s consumer levels. High-Low pricing is based on price promotion, by placing a discount premium only on certain products for a limited period of time. Hi-Lo rests on a weak assumption, though. It is about attracting customers with a few well-known branded products, often sold below cost, seeking to expand their in-store purchases on other, fully-priced products. This pricing policy could turn out to be dangerous for distributors and manufacturers if it is not well managed, since it rewards consumer opportunism and the segment of so-called cherry-pickers, who somehow benefit from value created by loyal customers. Cherry-pickers only buy products that are on sale, and thus maximize their advantage vis-à-vis the retailer. Summing up, the Hi-lo approach risks motivating infidels and demotivating loyalists. Over the long term, it negatively affects customer loyalty and business performance. In 2009, Nielsen highlighted the fact that more than 25% of the products sold by large-scale retailers where sold with price promotions, reaching 30% in giant supermarkets (hypermarchés). The EDLP approach instead offers the client a proportional return on the value of his/her purchases, warranting a good deal on each and every product, thus creating a solid and stable relationship of loyalty. This is the

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reason pushing many firms to adopt low-cost pricing policies. Another element highlighted by marketing studies is the apparent paradox of a low-cost economy. In fact, empirical studies show a polarization of markets, in which both low-cost goods and services and premium priced products expand their market share, with a consequent reduction of market share for the medium-priced ranged. Looking at mass consumption items, and setting at 100 the average price of each category, one can see that the market share of products priced at less than 70 represented 12.6% of the sales volume, while products with prices higher than 130 account for 30% of total sales. We can thus finally talk about product differentiation, from no frills to full frills good and services, which expands the consumer’s freedom of choice and his/her welfare. It is also good news for firms, which can innovate by knowing that customers will be able to seize on the elements of differentiation being offered. The Author Sandro Castaldo is Full Professor of Management at Bocconi. Between 2004 and 2009 he was Director of the SDA Bocconi Marketing Department, where he taught in various programs, including the Full Time MBA and the EMMS, the Executive Master in Marketing & Sales. Research Areas Trust in market relations. Industry-distribution relations and channel policies. Analysis of consumers and purchase processes. Innovation and new product development. E-commerce, loyalty and privacy.


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Working as Business Innovation Manager by Silvia Zamboni

Change is the norm nowadays, but pushing rather than following new events is a challenge every company faces. So this job position is meant to deal with the issues of change management: stimulating new ideas, interpreting market trends, negotiating path-breaking deals.

In a business environment ever more complex and competitive, it can be a significant challenge for organizations to give rapid answers to market changes. This involves issues like establishing a web of relations that exceeds the boundaries of the firm, and creating, organizing and managing the virtual links between the firm, its employees, external collaborators, suppliers, and customers. Innovation is not only about developing a new product or service: innovation embraces all business processes. It can be about either process or organizational innovation, in order to foster business growth by entering new markets and/or expanding existing ones, by introducing new and better products and services and implementing new ways of working. Thus in large companies the need has emerged to have a specific role devoted to the promotion and management of innovation, by creating the ad hoc position of Chief Innovation Officer (CIO), in Italy better labeled as Business Innovation Manager (BIM). That of the manager of innovation is an established company position in Anglo-Saxon countries which is currently emerging also in the Italian and European context. It originates from the evolution of other functional or process-related corporate functions, depending on the driving factor of innovation within the firm. According to this perspective, the BIM pushes business innovation through good strategic thinking and a related ability for economic and financial planning. This job profile calls for good organizational capabilities, in order to manage change and negotiate the projects and processes of innovation in a structured and continuous way, by favoring the emergence of a creative and forthcoming company environment. He/she must also possess high level marketing skills, in order to locate gaps in the existing supply range, stimulate the generation of new ideas and the market transfer of technological innovations, so that they can generate

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value for the customer and the firm. As corollary, a solid knowledge of ICT and its potential to establish internal and external collaborations complete the challenging profile of a desirable BIM. Over the last year, a research study conducted by SDA Bocconi School of Management, in collaboration with Progetti Manageriali (a service company owned by Federmanager), has looked into the skills required to fill this new job profile and considered whether existing managerial profiles managing innovation processes possess them. The study highlighted certain areas of comparative weakness with respect to the management of teams and external relations, in the dynamic management of core competence and competitive intelligence, and in the organization of the innovation process in a multi-project environment. The question of whichone will tend to be the career path for this new job position remains open, especially in Italy where managerial careers tend to be strictly vertical and specialized. The Author Silvia Zamboni is Professor of Operations and Technology Management at SDA Bocconi. Research Areas Models of network innovation and open innovation. Research, design and development management. Collaboration with customer and suppliers in new product development processes. Project management in settings of research and development of new products/services. Process analysis and management. Service innovation and operations management. Facility management and services’ purchasing management.


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Super-Sponsored Sports by Paolo Guenzi

86% of sponsorships are about sports, so huge marketing investments have been made for the 2010 World Cup. But the sponsorship sector in Europe differs widely from one country to another as soon as the discussion moves away from soccer and motor sports.

Europeans are very much into sports. In the five major countries of the Old Continent, 25% of the people polled say they are “very interested”. Add to that the “interested” 35%, and you have 6 out of 10 Europeans who watch sports. Such interest has led to ever-growing investments to sponsor teams, athletes, and whole competitions. In Europe, according to International Marketing Reports, sponsorships involve sports in 70% of the cases, and sport sponsorships account for 86% of the total value of sponsorship agreements. The growth of the sports business has led the development of investments in the industry by media and companies. According to many observers, sports sponsorships have reached a stage of maturity in Europe. Looking at sponsorship typologies, team sports weigh in for 62% of the total, followed by events (23%) and individual athletes (12%). Naming rights contracts for facilities such as stadiums and coliseums are spreading, buy they account for only 2% of the total. In the Old Continent, the sponsors focus on two sports: soccer (38%) and motoring (32%). Other sports get a lot a less in spite of their popularity: for instance, tennis is liked by 23% of the population, but attracts only 3% of sponsorships. Such a lower pulling factor is explained by the heterogeneity of interest into various sports across different European markets. In fact, while soccer, car and motorcycle racing are liked everywhere, track and field is appreciated by 30% of French, but only by 14% of Italians. Thus there are marked cultural and local specificities that heavily influence business potential for different sports in various countries. Other social profiles also matter. For instance, basketball is very much liked by people under 30, while skiing is uniformly liked by all age brackets. The concentration of interest in specific customer segments, while limiting investment opportunities for generic investors, offers the possibility of more targeted communication for potential sponsors, which is attractive for companies aiming at selected publics.

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For example, sailing attracts a lot of money from the fashion business, which is almost completely absent from other sports. Looking at the industry of provenance, among sponsoring firms dominate financial services (13% of the total value of sponsorship contracts), automotive companies (12%) and telecommunication firms (10%). The main challenges for the actors involved in sponsorships (the sponsor and the property owner) are optimizing return on investment for all side of the deal and improving the measuring of performance. To reach these objectives, ever more articulated and specialist marketing and brand management skills are required to optimize sponsors’ outlays. Market research needs to be deepened to gain a better understanding of sports consumers and their reactions to sponsorship initiatives. The Author Paolo Guenzi is Associate Professor of Corporate Economics and Management at Bocconi and Professor of Marketing at SDA Bocconi, where he is director of the courses on sales. Research Areas Sales management. Relationship marketing. Marketing of leisure.


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Institutional Factors and Competitiveness Determine Where Cars Are Made by Carlo Alberto Carnevale Maffè

FIAT and the others: the industry is changing; a careful balancing of institutional relations and production priorities is now the rule of the game. The national identity of a product is complicated by global supply chains, brand loyalty versus territorial presence and new twists in labor relations.

When somebody says “Made in Italy”, I say “Not so fast”. In the years of galloping globalization, the “Made in” concept underwent profound changes in cultural and economic terms: its territorial identity was progressively eroded, as it turned into an almost accidental organizational option, embedded into a complex and geographically distributed logistical chain. The corporate brand, this was the mantra of marketing, must replace geographic origin denomination as guarantee of quality: Made in had to become Made by; the reference was no longer a nationality and a territory, but a brand and an organization. But the worst economic crisis in years, with its pangs of protectionism and mercantilism, has taught sharp-minded managers to consider manufacturing labor as a fundamental arbitrage factor in national and international maneuvering for fiscal aid and company subsidies. For major manufacturing firms, today more than ever, labor is a bargaining chip in the institutional and political game. The great industrial challenge is to marry the constraints imposed by economies of scale and rationalization of production with the renewed role of national governments in protecting employment. The case of the auto industry is exemplary. During the period of most acute economic crisis, France, Germany, and then the other European counties, have come to the rescue of the national car industries with direct or indirect subsidies, blatantly disregarding EU regulations prohibiting government aid to business companies: the influence of competition authorities was effectively neutralized by global financial emergency. In an industry deeply in crisis, the protection of the “Made in” has become the political justification to shelter employment. In Italy, FIAT. dealing with a crisis too large to be compensated by the intervention of a too small national state, has immediately seized on the opportunity, with the acquisition of Chrysler, to propose a risky institutional

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deal to the US government, offering technological synergies and maintenance of employment levels in exchange for a company share with a total control option. And in recent weeks, with the “Fabbrica Italia” initiative illustrating the new industrial plan, Sergio Marchionne put on the table the doubling of car production in Italy, in exchange for the unions signing for additional flexibility on the assembly line. This smart move in terms of industrial relations is accompanied by the choice of unremitting standardization of car components, the sharing of technological platforms and modules and the pursuit of economies of scale through industrial collaborations that are global in scope. In car-making, however, the share of value added represented by the final assembly of the vehicle – i.e. what is considered “Made in” – has steadily declined through the years, to the benefit of upstream stages of manufacturing (components and platforms), as well as downstream stages such as selling formulas and financing schemes. In the automotive industry, the Made in Italy is reinventing itself: it will more and more be constituted by the optimal minimum perimeter of processes to ensure the right compromise between, on one side, the level of industrial relations and the national identity of the product, and on the other the rationalization imperatives of an irreversibly global production chain. The Author Carlo Alberto Carnevale Maffè is part of the teaching faculty in the Strategic and Entrepreneurial Management Department at SDA Bocconi, where he was also coordinator of the Master in Corporate Strategy (2003-2007). Research Areas Competitive intelligence. Non competitive strategies and international strategies. Strategies of technological innovation. Industry focus: technology, media, telecommunications, luxury goods.


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Bringing Craftsmanship Back into Fashion by Stefania Saviolo

The Italian touch is about acknowledging the value that artisans, tailors and seamstresses bring to the fashion product. Not easy in a globalized economy, but one company is putting craftspeople in its stores to show customers just how skilled a true artisan can be.

The current crisis has made the customer more selective on price and quality. Italian fashion companies can seize on this opportunity, by exploiting traditional values and skills, which today need to be re-emphasized with new vigor. Much of the debate on Made in Italy fashion has been on the traceability of production, a principle which was embodied in recent legislation. But in order to give real content to the Made in Italy initiative, underlying factors of craftsmanship, innovation and taste, the factors that have made Italian fashion great, need to become more apparent and better supported. High-end companies thus have a different role from mass-market companies. In mass fashion, the customer looks at the price and seeks emerging style trends. In high-end fashion, the customer expects high quality, in terms of creativity, touch, luscious materials, and connection to a country or landscape. Celebrating the sophisticated skills that are behind a fashion brand has recently become the communication strategy of choice for major fashion houses. “Forever now” is the claim of Gucci’s advertising campaign for 2010. It highlights the role of its artisans in interpreting the quality and tradition of the fashion firm. At Gucci’s Rome boutique, one can find the “Artisan Corner”, a project which will soon go the world round, where the artisanal process of making purses and accessories is made visible to the clients. Gucci has recently stated that its products will continue to be made 100% in Italy, and that it will continue to invest into the craftsmen that work for the company (7,000 in Tuscany alone). At their latest fashion show, Dolce & Gabbana have joined the trend toward a higher appreciation of craftsmanship, by showing the expert female hands of a tailor making an iconic D&G jacket.

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But there are companies that have always put the product and the human touch at the heart of their strategy. Brunello Cucinelli and Tod’s have always linked excellence of the product to excellence of the territory. Cucinelli received the 2010 Confindustria Award for Excellence as best company for territorial valorization. Cucinelli calls his employees “my 500 thinking souls.” Tod’s runs the biggest Western shoe factory, located in Italy, and puts the “Italian touch” at the heart of its brand philosophy. The crisis caused by the sorcerer’s apprentices of finance will perhaps give a renewed role to those artisanal masters whose creations can give new shine to the Italian fashion miracle. This would be the veritable innovation in a country where the factory shopfloor and artisanal labor have never been given their due. But it’s not a return to the past. Craftsmanship is today aided by technology and must find its niche within complex global chains of production and exchange. The new Made in Italy must offer value to the global customer, balancing tradition with innovation. To do this, two major problems still need to be solved. Firstly, we must make this culture attractive to our young people. In order to attract them toward these jobs of craft and skill, we need new forms of education and training and an adequate social status for those working in them. Secondly, business ethics needs to be restored in Italian fashion. The drive for lower costs, higher flexibility, and quicker time of delivery has generated a mass of subcontractors working under conditions of dubious legality, in order to be able to survive. It would be a paradox if the Made in Italy were to based on underground labor in clandestine sweatshops The Author Stefania Saviolo is a Lecturer in the Department of Management and Technology at Bocconi and Co-Director of SDA Bocconi’s MAFED, the Master in Fashion, Experience and Design Management. She is also Professor of Strategic and Entrepreneurial Management at SDA Bocconi. Research Areas Management of fashion firms. Brand management. Internationalization strategies.


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The Lone Man at the Top Doesn’t Come Out on Top by Beatrice Bauer and Massimo Magni

The model of the male manager taking all the decisions and overstressed by too many activities and too little time is not working. A Bocconi questionnaire outlines this managerial style and finds that the remedy for isolated individualism and poor communication is teamwork.

Over the last few years, more and more managers realize they don’t have the necessary skills to deal with problematic situations and abrupt changes, and are unable to face stressful situations with a cool and balanced mind. A recent research study conducted by the Bocconi Institute of Organization and Information Systems highlighted the fact that 56% of interviewed managers think they have too many activities to perform, while 57% feels they don’t have sufficient time to deal with all their tasks. It’s not surprising that the creation of a good team capable of overcoming exasperated individualism and integrating different skills and attitudes is one of the problems that are absorbing leaders’ energies. Leadership based on the image of the strong man who imposes his ideas and obtains uncritical obedience from his team is no longer a factor for success. Today, aside from knowledge of the market and of one’s business, it has become a fundamental quality for a leader to be able to stimulate the energy, participation and proactivity of his/her collaborators, in a careful balance between himself/herself and the others. This aspect is often given scant attention: leaders don’t know how to transmit their collaborators their vision for the future, are unable to express the objectives to be reached in an attractive way, often limiting themselves to defining the individual actions to be performed without providing a larger understanding of the context. From the results of our research, it emerges that 36% of the difference in the ability to innovate and 44% of the ability to face the unexpected by teams is attributable to the team leader. But what are the secrets of a leader who is able to manage a team effectively? The findings point toward certain essential elements which help the leader act with the right style at the right moment. First of all, self-knowledge. Good team leaders exhibit a high level of self-awareness regarding their own strengths and weaknesses. This aspect is important, because it leads the leader to realize when something is beyond his/her

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abilities, and understand what are the complementary skills that need to be brought on board to deal with highly complex situations. Secondly, scouting is essential. The team leader must be able to activate his/her network of relations to understand where the necessary expertise lies to build a good team on short notice, having the right mix of diversity and abilities to deal with complex problems. Thirdly, modulation. Self-knowledge and scouting are necessary but not sufficient conditions. In fact, the most effective team leaders are those that are able to modulate their style of leadership rapidly and coherently depending on the context, alternating between centralization and empowerment. The ability to modulate one’s own behavior is not innate and requires experience, exercise and constancy, above all because the tendency is to replicate the behavior of the “preferred style”. To test your own leadership style, the reader can compile the following online questionnaire: http://www.sdabocconi.it/leadingteams (available in Italian only). You will get real time feedback: a concise report offering an individual evaluation of his/her style of team leadership, and highlighting the contexts where such behavioral qualities are most effective. The Authors Beatrice Bauer teaches Organization and Human Resources Management at SDA Bocconi. Research Areas Cognition and behavior during change. Resistance to change, assertiveness, stress, health, and psychosomatic disorders. Leadership and team building in complex situations, organizational changes and development of organizations able to stimulate behavioral change, empowerment. Massimo Magni is Assistant Professor in the Department of Management and Technology at Bocconi. He was a Visiting Research Scholar at the University of Maryland and a Visiting Instructor at the University of Texas, Austin. Research Areas Implementation and development of IT systems. Organizational behavior in the IT area.


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Intangible Assets: You Can’t Touch Them, but They Make the Difference by Francesco Perrini

Strategy: the positive repercussions on the system of company relations that derive from adopting standards that are higher than what is required by law. A company’s endowment of human, intellectual, social, symbolic, and organizational capital is hard for competitors to imitate.

It is undeniable that in current competitive markets, value creation is the result of the strategic management of intangible skills and assets. The basic assumption on the superiority of intangible capital in ensuring lasting and sustainable competitive advantage is intuitive. Physical and financial tangible assets are only able to generate a modest return on investment, because they represent forms of capital that are common and easily reproducible. Only rare, valuable, hard-to-imitate resources, configured so that they can be effectively used within a specific business organization give rise to a positive return differential. And it’s precisely intangible assets that possess such characteristics. They thus are at the basis of value generation in modern economies. It is in the progressive strategic and organizational integration of CSR practices can make the difference. Adopting social and environmental standards that are higher than the legal norm must be motivated not so much by improving the bottom line, but rather as inevitable consequence of complex, dynamic system of relations that links the firm to its social environment. The step between socially responsible behaviors and strategies and the accumulation of intangible capital is not hard to make. The more the economic, social and environmental dimensions are integrated in long-term business processes, the more it will gain legitimacy with and approval by various categories of stakeholders, thus augmenting its stock of immaterial resources based on trust and good relations. Recent studies have shown that the accumulation of immaterial assets is the key to adopting CSR strategies that benefit the firm. According to this approach, relational assets (customer relations, labor relations and relations with other types of stakeholders), structural assets (the capacity to innovate through the

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development of technical abilities that are coherent with the corporate mission and culture) and intellectual assets (the set of behavioral, professional, cultural skills of employees) are the missing links between socio-environmental and economic-financial performance. One can think of how the implementation of programs and strategies geared toward the reduction of environmental impact requires the development of new corporate skills, which, by increasing the stock of intellectual and structural capital, in turn yield positive results in terms of operational efficiency and company results. Also, by improving stakeholder relations, firms are often able to venture into new markets and have access to new business opportunities. The necessary condition for this to happen remains the conviction that social responsibility be understood as integral part of corporate strategies and policies, by interacting with the management of all the other functional areas: production, marketing, human resources, corporate governance. Thus the point for companies is not so much to move generically toward CSR, but to understand the meaning and value of CSR of a specific firm and translate it into objectives that can be monitored, thus leading to concrete activities and measurable results. The Author Francesco Perrini is Full Professor of Economics and Business Administration at Bocconi, where he holds the SIF Chair of Social Entrepreneurship and Philanthropy Management and is also Director of CRESV, the Center for Research on Sustainability and Value and the Program Director for the Bachelor of Business Administration and Management. He teaches in the Corporate Finance and Real Estate Department at SDA Bocconi, where he has been co-director of the development of Corporate Social Responsibilities since 2002. He has taught Economics and Corporate Management at the Accademia della Guardia di Finanza of Bergamo and was Visiting Professor at EAE - Escuela de Administraccion de Empresa of Barcellona and at the Universidad de Chile in 2000-2001. He was also founder of the Finetica Observatory with the Pontificia Università del Laterano, Vatican City. Research Areas Decision analysis. Investment, start-up and corporate evaluation. Stock exchange listings. Project financing. Financial strategies for the development of SMEs. Ethical finance and ratings. Corporate social responsibility. Corporate governance. Social entrepreneurship.


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Going to the Beach on the Other Side of Globe by Magda Antonioli

Europe’s share in the global market for tourism has decreased from 55% to 45% over thirty years as new destinations became available. In this fully globalized market, it’s niche customers that matter, and mastery of online marketing is crucial to identifying them.

The globalization of tourism has raised the issue of national competitiveness. Over the last few years, new destinations have emerged on the global market, and more traditional destinations, while still growing, have seen their share of global tourist flows decline. This is the case of Italy and the rest of Europe, which accounted for more than 55 % of tourist destinations in the 1970s and now accounts for 45% of global tourism. A similar evolution calls for an understanding of the market structure, which in turn leads to assessing the configuration of the roles of business actors, such as air carriers and the development of web tourism, and in general all those who work with tourism (public agencies, operators, companies, as well as complementary industries such as culture, entertainment, sports etc). The first implication of globalization is that different societies, cultures and economies are increasingly linked and interrelated. Technological change, the liberalization of the world trade in goods and services, and heightened personal mobility have reduced, although not abolished, the barriers of space and time. Demographic change, especially in advanced countries, has led to the progressive aging of the population. This implies higher leisure and income, but also different needs in terms of destinations, products, services. Internet and personal communication technologies (cell phones, GPS) have changed the way of retrieving information and taking decisions. A higher supply of products and services makes it difficult for consumers to gauge their relative qualities. Thus they seek other factors on which they can base their choices and are increasingly attracted by solutions that are tailored to their individual needs and desires. It is thus harder to identify homogeneous targets for marketing campaigns. In other terms, we’re evolving toward ‘niche tourism’.

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There’s also growing demand for sustainable tourism, either ecologically, socially, or economically. The trend has been strengthened by recent legislative initiatives the provide incentives for individuals and societies to act in more sustainable ways. Both the Kyoto Protocol and recent EU directives set guidelines that affect agriculture, transport, and tourism. Also, the demand for health and well-being as leisure activities is growing, in order to compensate our increasingly sedentary lifestyle. Finally, the success of low-cost entrepreneurial models has reshaped the market, by reducing products and services to their basic components. Such business models work next to the more traditional models in the industry. China, India, Brazil are rapidly gaining ground both as “importers” and “exporters” of tourists. Operators must come to terms with the reality of a growing weight for emerging countries in world tourism. Europe is losing market share (see United Nations World Tourism Organization). China, for instance, in 2006 overtook Italy to become the fourth most visited country in the world. If Hong Kong is also factored in, then France sees its traditional position as the world’s leading destination threatened. The biggest challenge for many Italian and European firms is IT. Market fragmentation and the dominance of small companies do not help. Still, savvy web marketing and a good online reputation are major competitive assets for anybody operating in the tourism industry. The Author Magda Antonioli is Associate Professor of Economic Policy at Bocconi, where she is Director of the Master of Economics of Tourism and head of the tourism section at CERTeT, the Center for Research on Regional Economics, Transport and Tourism. She has taught at the Universities of Brescia, Venice and Florence and was Visiting Professor at the University of Kyoto (Japan, 1995), Chulalongkorn University in Bangkok (Thailand, 1999), ESADE in Barcelona (Spain, 1998) and the University of Federico Santa Maria in Santiago (Chile, 2001-2002). She is also Director of MIUR and CNR research project units, head of research projects for the EU and member of the Educational Council of the WTO. Research Areas Economics and policy of tourism. Environmental issues in economic policy. Industrial economics.


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Invention: Learning by Doing by Raffaele Conti, Alfonso Gambardella, Myriam Mariani

Young researchers tend to produce the most disruptive concepts, but senior scientists produce more ideas. Should management invest in the chance of a quick big breakthrough, or support a gradual process that could lead stepwise to similarly important results?

Most inventions are incremental and have limited technological value. Only a few inventions are truly radical, i.e. they constitute the basis for future innovation. Is an inventor learning from past experience when he produces new inventions? In other words, what’s the role of learning by doing in radical innovation? Our article (Learning to be Edison? The Effect of Individual Inventive Experience on the Likelihood of Breakthrough Inventions) shows that the amount of experience of an inventor (i.e. the number of inventions he made in the past) has a two-sided effect. On the one hand, it diminishes the probability for a given invention to be radical; on the other hand, it makes inventors more productive. The reason for this is that more experienced inventors tend to replicate what they have done in the past; for them it will be easier to make new inventions, but these will tend to be incremental, since they resemble past innovations. However, since radical breakthroughs are hard to predict, making many inventions is the safest method to achieve one. As a consequence, inventors who have acquired more experience are more likely to generate radical inventions, thanks to their higher productivity. In order to quantify the impact of past experience, it is possible to state that a 1% increase in the stock of inventive experience determines an almost proportional increase (around 1%) in the likelihood of an investor generating a breakthrough invention. Relevant managerial implications are not hard to see. Many firms invest major resources to generate radical inventions. The distribution of the economic value of invention is very skewed: there are many incremental innovations of little value or none, and very few radical inventions that have very significant value. For small firms and start-ups, to be able to make a radical invention means creating competitive advantage and potentially subtracting market share from major firms. But for the big corporation making a radical invention means maintaining competitive advantage and giving new impulse to its activities, as well entering new market segments.

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How do you then increase your chances of generating radical innovation? Our article suggests that in the case of a company having to choose among more than one invention, as happens in technology markets, it’s better to bet on the ideas of inexperienced inventors, which are more likely to be radical. However the advice is turned onto its head in the case of a company having to decide which inventor to hire, or which inventor to favor in the allocation of internal resources. In this case, the company would do better to invest in more experienced inventors. In fact, although each of their inventions has a lesser probability to be radical, expert investors are more likely to generate radical inventions, just because they are more productive. The Authors Raffaele Conti is a PhD candidate in Management at the Bocconi PhD School. Alfonso Gambardella is Full Professor of Corporate Management at Bocconi, where is Dean of the PhD School. He is editor of the European Management Review and serves on the editorial board of the Academy of Management Review, Global Strategy Journal, Industrial and Corporate Change, Research Policy and Strategic Management Journal. Research Areas Corporate economics and management. Industrial economics. Economics and management of technology. Myriam Mariani is an Associate Professor in the Department of Institutional Analysis and Public Management at Bocconi, where she is Vice Director and member of the Scientific Advisory Board of the KITES Center, Knowledge, Internationalization and Technology Studies. Research Areas Economics and policy of innovation. Life cycle of inventors. Spillovers of knowledge, economies of agglomeration and international opening of European regions: analysis of the economic effects.


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Europe, America, China: Each is Global in Its Own Way by Margherita Pagani

E-commerce is driven by digital technology, but different markets display widely varying consumer use of a number of devices as vehicles for purchasing. A good e-marketing strategy must start with consumer specificities to reach the machines they use.

Digital technologies, by cutting distance and costs, enable and intensify globalization. Information and telecommunication technologies continuously, almost instantaneously, transfer enormous quantities of information, further integrating economies and opening new markets and supply channels to the firms of the world. The globalization of goods and services, designed and manufactured to be sold all over the world, is particularly marked the in online world. Data on the global growth of electronic commerce show that digital distribution (Web, TV, cell phones) allows firms to increase their reach in terms of markets and their richness in terms of the catalog offered. The electronic market has offered new opportunities to existing firms to market and sell beyond national borders, and has led to the emergence of a whole new category of operators, like Dell or Amazon, exclusively selling online. Small and medium firms benefit from the possibilities the Web offer in terms of customer relationship management: lower cost and higher diffusion of promotional campaigns, more precise consumer targeting down to the level of one-to-one marketing, and more. Traditional and new media are expanding the globalization opportunities of small firms and big corporations alike. In addition to the Web, new digital TV shopping channels also allow the consumer to comfortably shop from home. QVC, the US shopping channel, is well established in Japan and Germany and is now being launched in Italy. Over the last year, QVC received more than 181 million phone calls in the US and sold over 166 million products in the world for total sales of $7 billion. Many firms are also exploiting the marketing potential of social networks like Facebook, MySpace, Twitter. While digital technologies are drivers of globalization on the supply side, it must be noticed that the consumer is not equally global in his/her patterns of technology use and consumption, so that global firms should carefully consider their strategic choices in terms of online commerce.

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According to an ongoing study by Università Bocconi and Northeastern University, significant cross-cultural differences emerge in the consumer’s adoption of technology in the three major economic regions of the world: America, Europe and China. The relative weight of individual vs collective values affect the attitude toward and use of technology. The perceived risk of online transactions biases purchasing behaviors and highlights a difference between the US and the EU. Differences also emerge in technology use: the US consumer is more PC-centric, while Europe is more TV-centric. The new wireless technologies are offering new opportunities for e-commerce in Europe and Asia. Technology is driving the globalization of many firms, but a correct e-marketing strategy should look at consumer specificities in terms of adoption and use of digital technologies in the various areas of the world. The Author Margherita Pagani is Assistant Professor of Marketing at the Bocconi Department of Marketing. She is an Affiliate at MIT Massachusetts Institute of Technology and a member of the Executive Faculty at the Lorange Institute of Business – Zurich. She was also Visiting Scientist at the MIT Sloan School of Management (2008), Visiting Scholar at the Massachusetts Institute of Technology (2003-2007) and Visiting Professor at the University of Redlands (California, 2004). She is associate editor the Journal of Information Science and Technology and member of the editorial review board for Industrial Marketing Management, the European Journal of Operational Research, the Journal of Interactive Marketing, the International Journal of Human-Computer Studies and the International Journal of Cases on Electronic Commerce (IJCEC). Research Areas Consumer behavior. Adoption models in the digital domain (digital TV, wireless web). E-marketing. Economics of digital media. System dynamics. Mobile wireless. Interactive digital advertising.


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Revealing Secret Recipes by Giada Di Stefano and Gianmario Verona

Social norms protect more than legal norms, especially in cases like the intellectual property of something as hard to copyright as a recipe. New forms of information exchange have emerged, each with its own strategic implications and set of checks and balances.

Over the last few years, we witness the growing media exposure of gourmet cuisine. To quote a famous Milanese chef: “Twenty years ago it wasn’t like today. The chef’s activity was not valorized and the final consumer was unable to appreciate all the research and effort that went into the dish served at the table.” Increasingly, the world of high cuisine is shown in books, symposia, and especially on dedicated cable and satellite channels. This growing media exposure has led to an interesting phenomenon: an intense private communication between chefs, who are more often than not competitors, right down to hitherto jealously protected recipes, cooking techniques and food suppliers. In certain cases, there are even swaps of waiting and kitchen personnel. This exchange among competing firms is a double paradox. On one side, competitive advantage in the industry largely depends on the uniqueness of good creations and continuous renewal of the supply offered to consumer. Exchanging information with competitors, or making it public, could potential undermine a chef’s creation of value. On the other hand, the industry in question is marked by the impossibility of securing intellectual property rights. As a highly regarded chef remarks: “How can you copyright your creation, when just a superficial recipe change can ward off any sanctions?”. Once it is out of the firm’s boundaries, information easily falls prey to imitators, losing value. In spite of this, information exchange is increasingly frequent. As one haute cuisine chef recounts: “Once chefs kept their recipes hidden. Today there’s constant interchange. There are events where we share the same kitchen and prepare the most renowned dishes side by side.” How can this phenomenon be explained? And what makes it sustainable? Answering these two questions has important implication for many high-innovation sectors. First of all, for those sectors characterized by low protection of intellectual property, which are precisely those where Italy excels: fashion, publishing, design. Secondly for those industries where the

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traditional protection of intellectual property rights no longer works, due to the speed of innovation (health care) or the growing involvement of third parties in the innovation process (software and the Web). In our work Kitchen Confidential? Knowledge Transfer and Social Norms in Gourmet Cuisine, co-authored by Andrew A. King of the Tuck School of Business, we provide two alternative explanations, on the basis of an experimental questionnaire which interviewed more than 500 Italian chefs included in the 2009 Michelin Guide. Chefs confirm the existence of an alternative system of intellectual property protection based on social norms. Chefs have developed a code of conduct which dictates behaviors for anyone wanting to be considered worthy of respect by his or her own peers. Faced with the exchange of a recipe, a technique, the information on an ingredient, chefs know what is allowed and what is not. There’s also the implementation of strategies that minimize the eventual damage coming from an improper use of information. Think about a very innovative chef: the value of a single recipe will be undoubtedly decrease in the case of copying. Or consider two chefs that share the same cuisine philosophy and want to promote it. In this case the exchange of information benefits both sides, enriching the knowledge of both and mutually supporting the new approach. Summing up: yes to the transfer of knowledge, but as a function of the transaction in question, of the competitive position occupied, and of the strategic value of the exchange. The Authors Giada Di Stefano is a Research Fellow at the Bocconi Department of Management and Technology. Research Areas Technology and innovation management. In particular: intellectual property rights, social norms, and knowledge transfer. Gianmario Verona is Full Professor of Economics and Business Administration and Director of the PhD in Business Administration and Management at Bocconi. He is a Professor in the Marketing Department at SDA Bocconi and holds the role of Program Chair of the Competitive Strategy Division of the Strategic Management Society. He teaches at the Tuck School of Business at Dartmouth College. He is also a member of the editorial board of the Strategic Management Journal and Vice Director of the journal Economia & Management. Research Areas Technology and innovation management. Dynamic capabilities. Knowledge integration. User innovation and entrepreneurship.


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Entrepreneurs, Listen to Lao Tzu by Thanos Papadimitriou and Brett Martin

A survey conducted by the Harvard Business Review shows that entepreneurs often do not know how to delegate. Thanos Papadimitriou (SDA Bocconi) and Brett Martin (entrepreneur) quote Lao Tzu: “Give a man a fish, feed him for a day. Teach a man to fish...”

Experienced entrepreneurs know full well that the secret of a successful start-up lies in its implacable capability to execute, according to a short and tight list of priorities. After all, it’s their relentless focus that allows new entrepreneurs to compete with vastly larger market incumbents. Let’s consider the case of MaritimeX (fictive name for a veritable shipping company). Built from scratch by two Greek childhood friends, Aris and Stavros, MaritimeX had grown from an office staffed by two people to a sizable company with 25 employees. There was only one problem: after sales had reached $9 million three years earlier, they had plateaued. Although they overworked themselves to exhaustion, the two founders were unable to go beyond the ten-million-dollar mark. A quick glance at MaritimeX’s workflow would have revealed where the problem was. Each individual customer order had to be assessed by one of the two founders first. Since it would take at least one week or two before Aris or Stavros could complete their evaluation, often potential customers gave up before somebody at MaritimeX seized the chance. Although they devoted themselves full-time to evaluate contracts, they could only manage a few at a time. So founders unintentionally ignored whole markets, letting the possibility of offering lucrative special transport services slip by. Aris and Stavros had become the bottlenecks of their own company! Entrepreneurs are obstacles to their own success, when their drive for perfection becomes enemy of the good, i.e. implementing the necessary steps for growth. When people asked them why they wanted to evaluate every single activity in person, the owners of MaritimeX answered that the task was incredibly complex and that it required a sophisticated understanding of costs and a lawyer’s knowledge of international law. The two founders were quicker and faster in identifying the better business propositions. How could they stand aside and let sloppy evaluations prevail?

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Aris and Stavros had to take important decisions from a financial and personal point of view. Did they want to grow, and risk jeopardizing the quality of service and relations so jealously held? Or did they prefer to stay small but successful, while impressing their customers with their personal touch? What was more important for them: growth or control? Actually, one thing does not necessarily exclude the other. A look at the more common excuses for micromanaging one’s own company reveals the mistaken thinking that holds back many successful entrepreneurs: “As final decision-maker, I must do everything, because I’ve got to know everything”. Entrepreneurs should not refrain from getting their hands dirty, but decisions and information gathering should be delegated every single time it’s possible, so that the entrepreneur can devote himself/herself to activities nobody else can do in his/her place, such as imagining new business scenarios. “Delegating to people less competent than me leads to inferior results”. Every founder hates seeing their collaborators making “avoidable” errors, but good entrepreneurs know that the best is enemy of the good, and in many cases of growth. Knowing your employees’ shortcomings is no excuse to do everything personally. Successful entrepreneurs know that the best was to employ their time is to prepare their employees to face difficulties and help them learn from mistakes. Many new entrepreneurs assert: “The time spent training your collaborators is time wasted (and cannot be invoiced)”. Lao Tzu instead said: “Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime”. Letting one person taking all decisions is source of delays and ultimately unsustainable. In a survey we have conducted with Harvard Business Review (http://bottlenecksurvey.chefsnotbakers.com), an astonishing 41% of respondents revealed that their business would “collapse”, or at best “slowly decay” without them! Even if you’re the best at what you do, it does not mean you should do everything. An entrepreneur who fails to refashion his/her style of management from “executor” to “educator” will never tap into available resources to seek new business opportunities. The Authors Thanos Papadimitriou is Professor of Operations and Technology Management at SDA Bocconi. Research Areas Operations. Information systems. Entrepreneurship. Brett Martin is an entrepreneur.


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Work Turns Liquid and Overflows by Vincenzo Perrone

The boundaries between work and leisure fade, but choice about one’s own time is an illusion if the office takes over the household.

2010 is the year of jobs. Jobs to cling to, jobs to be found, jobs to be sought. Social mobility, never strong in Italy, could decrease even further. To their dismay, young people could find they have to postpone yet further their hopes of being hired, while middle-aged people who have lost their jobs stand to suffer the most. But economic uncertainty will also affect those who haven’t been laid off: the crisis is making work ever more liquid and pervasive. Work is expanding in the lives of many. Like a liquid, it has lost its shape and structure, since its time and space have lost their predictability. Downsizings and restructurings force those who stay to do more with less resources. Thus the intensity of work grows and grows. At FIAT, many managers have accumulated a number of tasks they have to perform on both sides of the Atlantic. Flattened hierarchies and direct reporting are children of the idea by which only managers, and their direct vision and first-hand experience, can make a business grow. Whoever is entrusted with even minimal responsibility is expected to put in overtime, offer complete remote availability, take work home, and do weekend meetings. Work has long broken the 9-to-5 shackles which mores and unions had imposed after WWII. Aided by technology, work is intruding into times and spaces hitherto considered private and sheltered. We have seconded this trend out of fear, convenience, and sometimes out of boredom. Job uncertainty makes it more likely to give in to employers’ demands for higher commitment and productivity. But if it’s true that work encroaches on private life, the opposite is also valid. With respect to the past, today it’s technically possible and tacitly tolerated to organize one’s vacations by using the Internet connection at the office, as well as chatting online and making a few personal calls. In this mishmash of work and non-work, office life and private life, we gain from having more flexibility in the use of time, but we risk underestimating the price we are paying. Having become multitasking jugglers, we risk to be plagued by a sort of attention deficit syndrome, i.e.

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the inability to focus on one issue at the time, and devote all our energies in addressing it. We also risk losing our ability to navigate a complex world: the taste for fine distinctions, for patience, and listening. 2010 could well be the year of reckoning. People are already reacting. Those who understand that, in order to rule one’s life, one needs to master his/her own time, are downshifting toward jobs that allow a less frantic pace of work. Others are rediscovering the taste for working the land and growing produce. Another option is the one described by Richard Sennett, according to which there is a rediscovery of craftsmanship and the appreciation of skillful, autonomous manual labor. However 2010 won’t be the year of radical change, which we invoked when the crisis was more threatening and the folly of the system we have built was exposed in all its irrationality. Bankers, consultants, managers and entrepreneurs have started to go back to business as usual. Sarkozy’s idea that GDP had to shelved in favor of an indicator of human happiness no longer commands attention. But any complacence would be mistaken. What if the nightmarish scenario described by Matrix were not so distant from our everyday reality? How much happiness are we producing for ourselves, others, and the planet? These are uncomfortable questions, but they mark the difference between awareness and stupor. Working in the new world requires people with open eyes. So, do you want the blue or the red pill? The Author Vincenzo Perrone is Full Professor of Organization Theory at Bocconi, where he holds the position of Vice Rector for Research. He has been a member of the editorial board of Organization Science since 2003 and ad hoc reviewer for the Journal of International Business Studies, the Academy of Management Journal, and the Academy of Management Review. From 1992 to 1994 he taught and conducted research at the Carlson School of Management of the University of Minnesota (USA), as a Visiting Professor. He held the chair of Corporate Organization in the Business and Labor Department of the Università degli Studi di Cassino from 1994 to 1999 and was director of the SDA Bocconi Organisation and Human Resources Management Department from 1995 to 2001. He is the editor of Economia & Management, a SDA Bocconi journal, and editor-in-chief of Ticonzero - Knowledge and Ideas for Emerging Leaders. Research Areas Corporate theory. Relationship between strategy and organization. Organization networks. Change management. Organizational behavior. The role of trust in inter-organizational relations.


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Moms Are Public Opinion by Paola Dubini

In a media context of constant and confusing information bombardment coming from many directions, it’s mothers who select news. They accompany children in their life choices and are responsible for filtering information flows and picking media sources.

Many studies on information, media and entertainment industries focus on the supply side. They look at new product configurations, intellectual property regimes, the sustainability of business models, and the like. When such changes are analyzed from the demand side, they need to be embedded in a wider analytical framework that explores the changes in the formation of public opinion. The more the availability of media sources grows, the more their interchangeability increases during the day, the bigger the number of media aggregators and active users in the spreading of information, and the more the consumer must have an accurate knowledge in relation to media content in a day that can’t exceed the 24 hours allocated. More information does not necessarily make you more more informed. The dizzying increase in the availability of news and information has not gone hand in hand with a corresponding growth in public awareness and ability to select among news items. More often than not, information redundancy leads to media fatigue, and even close-mindedness. The unprepared consumer thus becomes the victim of media bomdardment and become less informed, as his/her attention falls prey to the latest piece of news. Conversely, if the consumer is an active user, information redundancy turns into a wealth of choices and each source provides specific possibilities to enlarge one’s information and knowledge. In the new media context, it is particularly interesting to study the behavior of moms. Mothers are very much aware of the effects that their choices have on the welfare of the household. They often are the family members who filter and preselect information, advising their children on media choices. Also, they usually are the critical decision-makers over purchases and are used to exchange, verify, and administer information in a selective manner within small groups of people. Even if they don’t use the Internet, moms are very much Web 2.0 in relation to content and people.

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A first study on the management of information redundancy conducted over a sample of 720 moms socially and culturally equipped to deal with a wealth of information stimuli show a correlation between the degree of information awareness and the consumption of information. Mothers who are better able to deal with redundancy are also those who consume comparatively more information coming from more disparate sources. More than half of the moms interviewed exhibit a proactive behavior vis-à-vis information redundancy, even if they differ about information strategies. However, even in a sample made by educated women using various media sources, we have found consumer profiles that betray a certain difficulty in dealing with growing information flows, so that defensive information strategies emerge. This is a sign that the research trail on people’s attitudes with respect to information flows is more promising than comparing different media types, and that apprehending the processes by which information is gathered and shared, by moms and within the family, is crucial when thinking about the evolution of information supply in the near future. The Author Paola Dubini is Associate Professor of Business Administration at Bocconi, where she is Director of the ASK (Art, Knowledge and Science) Center. She is a senior faculty member of the SDA Bocconi Strategic and Entrepreneurial Management Department, where she is also a fellow of the DIR Claudio Dematté Research Center. In addition, she teaches Economics of Culture and Economics of Editorial Companies at the Università degli Studi of Milan faculty for Literature and Philosophy and Coordinator of the Economics section of the Master for Publishers, offered by the Università degli Studi of Milan, the Italian Publishers Association, and the Mondadori Foundation. Research Areas Business models in the in information and communication industries. Economics of firms working in the arts, culture and tourism sectors. Attractiveness and competitiveness of territories. Entrepreneurship. Business Administration and Business/Corporate Strategy.


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European Museums: A Common Idiom for the Contemporary by Stefano Baia Curioni

Over the last ten years, more than 250 museums have opened in Europe, often in buildings of great historical and urban prestige. Differences between creative activities and other forms of production and exchange should occupy the minds of social scientists, if they are to fully understand the contemporary age.

Art is fashionable and is fashion, too. Over the last ten years, more than 250 museums and art centers have opened in Europe. Often set in costly and flashy buildings, these sites tell of overarching political, cultural, and urban ambitions. Art is being overexposed. It is often seen as a taumaturgic remedy vis-à-vis contemporary demoralization, as well as spur to economic recovery. Art is supposed to mend social illnesses and provide incentives to cognitive advancement. It is symbol and trait of an economy where wealth and beauty almost magically merge. At the same time, art is known extremely superficially. It is all too often treated as luxury and trophy to advance pitiless patterns of social competition and political dominance. But one should not be moralistic about this: the essential transformation of art into commodity is a problematic trait of modernity, that has been part of European society since the late 19th century. It is very important to investigate why such an ancient and risky expressive activity has undergone such a transformation. Whenever art mutates, this is a signal of far-reaching processes of social change. Social sciences can play an important role in acknowledging and conceptualizing this process, and in setting templates for art institutions and cultural policy. It is not a foregone conclusion, but a patient process of constructing a common research field. Engaging with art has been part of the intellectual history of economics, sociology and anthropology. At the same time, the complexity of the creative act and the structuring of dominant paradigms have led to a certain reductionism and consequent marginalization of the issue.

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This is the reason a major thread of debate has been started revolving around “Arts and social sciences” why at the Bocconi Art Science Knowledge (ASK) research center. It attracts geographers, urban planners and sociologists, economists, art historians and economic historians to the problem of finding a common ground around questions such as: how do arts change? What determines their transformation? What are the conditions for their development or decadence? A central point is to consider the difference of art with respect to other forms of production and exchange. This is a distinction that tends to be underplayed in social science, but which is strongly emphasized in critical studies. It’s not about the subjectivity of perception. On the contrary, investigating what is specific about art could help art transcend subjectivity and overcome paradigmatic constraints separating the various social disciplines, so that a common language can be found to do research on the contemporary. The Author Stefano Baia Curioni is Associate Professor of Economic History at Bocconi, where he is Program Director of the Master of Science in Economics and Management in Arts Culture, Media and Entertainment, as well as Vice President of the ASK (Arts, Science and Knowledge) Center, where he acted as Director between 2004 and 2009. He was General director of the ERGA Foundation, created by Università Bocconi and the Scuola Normale Superiore di Pisa, from 2005 to 2009, and a member of the advisory board of Palazzo Te in Mantova from 2008 to 2009. He was also a part of the Commission for the Valorization of Italian Heritage, appointed by the Italian Ministry for Artistic and Cultural Goods and Activities. Research Areas History of thought. Analysis of institutional development of Stock Markets in Italy. Cultural goods and activities.


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Stagnating? Certainly Not Culture! by Anna Merlo

Creative industries: certain definitions have been made obsolete in a post-industrial world. Purely quantitative assessments are fine for judging industrial productivity, but it is high time to restore value to the many contributions made by culture and the arts.

Stagnating productivity: this was the diagnosis put forward in the mid-1960s by two US economists in the Ford Foundation to define the productive capacity of the cultural sector as opposed to the productive capacity of the manufacturing sector. The two economists defined the latter as “progressive” because of its larger role in increased efficiency and technological advances. These kinds of progress do not affect artistic production, since it is characterized by manual skills and craftsmanship, and is thus less efficient in sheer quantitative terms. Low productivity, which, combined with high and rising costs generates a pathological relation between revenues and costs: as production grows, margins shrink. From an economic point of view this is a dangerously unsustainable situation, if external funders don’t step in. The low-productivity stigma does not only affect arts and culture, but also other industries where minds, hands and human bodies, rather than machines, are producing: crafts, sports, education, research, health, personal services. Isn’t it about time to change perspective on this issue? Only by looking at culture in purely quantitative terms can industrial sectors be seen as “dynamic”, as opposed to “stagnating” creative industries. But does it make sense in this post-industrial age to look only at quantity and efficiency? Shouldn’t we rather think in terms of effectiveness, quality, innovation and - why not - sustainability? We have to consider these new dimensions in the objectives being pursued, in the skills and resources commanded, in the complexity of processes employed, and in the standards for evaluating the results being obtained. Creative industries are among the most qualitatively important and innovative sectors: they are challenging, intriguing, and thus strategically competitive. Conversely, it’s the manufacturing industries now stagnating due to negative environmental externalities and the global crisis.

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Maybe the moment has come to stop seeing creative industries as characterized by “stagnating productivity” and start giving back their due after a century of industrialization, in terms of quality, innovation, competitiveness and economic value. Summing up, as we wait for the market to acknowledge and pay for the historical, social, and human value of culture and the arts, let’s stop refering to them as sectors with stagnant productivity. The Author Anna Merlo is coordinating supervisor of MASP, the Master in Entertainment Industry Management at Bocconi, Professor of Public Management and Policy at SDA Bocconi and Tenured Researcher at the Università of Valle d’Aosta. Research Areas Social economics. Non-profit organizations. Cultural organizations and public services. Entrepreneurship and responsibility.


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Politics as a Profession in Italy by Alex Turrini and Giovanni Valotti

Members of the Italian Senate and Parliament tend to be old, male professional politicians, leaving women and the young generally under-represented. A Bocconi study paints an unflattering portrait of a system that needs to change.

The latest report by the Bocconi Observatory on Change in Public Administration tries to sketch a profile of Italian parliamentarians, by drawing upon secondary sources to look at the individual characteristics of MP’s and Senators over the last 10 legislatures. Results show that the typical Italian parliamentarian has significantly aged over the last 35 years. In the VII legislature the average age of senators and representatives was 49.7, while in the last (XVI) legislature considered, the mean age had risen to 52.8. In particular, younger generations are grossly under-represented. While the share of the Italian population having less than 40 years of age is 23.6%, in Parliament only 8.4% of members are youngish. And it’s not because experience counts. Only about half (45.6% over the whole sample) of parliamentarians have previously served in lower-level institutional posts. But once elected, it’s likely the MP will stay in the House for additional legislatures: senators stay on average for two terms, and representatives even more than that (2.26). Another aspect concerns gender and income differences among parliamentarians. The research study highlights the fact that the share of women in Parliament has only reached 20% in the last legislature, while of course women are more than 50% of the Italian population. Women are even more under-represented in Italian businesses: in corporations with sales over €10 million, women comprise only 14% of those sitting on company boards. Lastly, apart from gender factor, the study highlights the fact that working as parliamentarian can bring gross earnings of as much as €200,000 (including bonuses and reimbursements). Paraphrasing Max Weber, it seems that in Italy Politik als Beruf is eminently possible: Italian parliamentarians can make a living off politics (so

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“plutocratic” recruitment of the political class seems a distant possibility), but in certain sectors of the population (youth and women) the sentiment of disaffection toward politics seems to be growing, limiting their willingness to pursue political careers, even for a limited period of time. The reasons for this phenomenon certainly depend on the existing mechanisms to select the members of the Italian political class (both in terms of training and electoral processes). As these are seriously biased, there needs to be reform and renewal concerning these crucial aspects. The Authors Alex Turrini is Assistant Professor of Public and Non-Profit Management at Bocconi and Professor of Management and Policy at SDA Bocconi. Research Areas Public networks, public governance, collaborative management (PNG). Behavior and demand of public policies. Policy fields: arts and education, social care. Public management reforms (PMR). Local government studies. Arts policies and management. Social policy and communication. Giovanni Valotti is Full Professor of Public Management at the Department of Institutional Analysis and Public Management at Bocconi, where he is Dean of the Undergraduate School. He is Professor of Public Management and Policy at SDA Bocconi, where he was Director of the Master Division. He is a member of the advisory board of the journals Azienda Pubblica and Management delle utilities. Research Areas Strategic management of local governments, public administrations and public utilities. Definition of institutional organization, evolution strategies and strategies for organizational models of public administrations. Analysis of forms of collaboration between private and public organizations. Innovative formulas for management of public institutions. Revision of personnel policies in public administrations and in public utilities. Personnel performance evaluation in public administrations. Control systems on results and quality of public services. Evaluation of the impact of decentralization processes in the public sector. Internationalization processes of public administrations. Modernization of the public sector in European countries.


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Sickness and Health Are Becoming Global by Eduardo Missoni

Is human health really considered a fundamental right all over the world? With the increase in human connectivity, governance of healthcare systems is becoming more complex and interdependent and a new discipline emerges that analyzes solutions to international healthcare policy.

The increase in human connectivity on a worldwide scale has produced an exceptional acceleration in the globalization process, with incredible consequences that are also relevant for human health. Health is recognized as a fundamental human right, inseparable from all human rights and interdependent on them. As such it is at the basis of the World Health Organization’s constitution, that defines it as “a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.” Recognizing its great variety of social motivators helps understand the interdependence between the right to health and all other fundamental rights, whose pursuit is the responsibility of society as a whole. Health makes up not only one of a person’s most intimate and vital goods, it is also a global and inalienable public good, such as the environment, the climate, security and peace, to which health is very connected. There are many elements for concern that bring about the necessity of a careful analysis of the relationship between globalization and health: new pathologies emerge and spread, a reduction of human resources for public healthcare and a crisis in healthcare systems is observed, access to treatment is more limited and the right to healthcare is often placed under discussion by opportunistic approaches and strong economic interests. In a general overview stressing the inequalities between the North and South of the world, in terms of health and other issues, the role of the World Health Organization has progressively decreased. The WHO is institutionally in charge of the promotion of health as well as, more in general, United Nations development programs and agencies. The relative weight of the actors traditionally active in the healthcare sector has

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changed, along with national and international public policies. Such policies are now more careful in creating environments favorable for investments instead of effects on the population’s conditions of life and health. Instead of being considered as an intrinsic value and one of the prerequisites for personal freedom and human development, health is often considered only one variable in the economic and financial system, a weight for the scales, an opportunity for the markets. Consequently, healthcare policies adopted in past decades, often dependent on macroeconomic policies of structural adjustment, have contributed to aggravating the situation in many parts of the world. Such as in many countries in Africa, where life expectancy has regressed after over a century of almost generalized improvement of the indicator. Given their importance, the effects of the process of globalization on human health have become the object of study for so-called “global health.” Along with social, economic and political motives for health, this emerging discipline also analyzes international and transnational solutions implemented on a political, strategic and operative level, considering their complex and intricate governance as well as the interaction of those processes with local and national healthcare and development systems. Managing global health requires the acquisition of new analytical and interdisciplinary abilities that transcend skills, as well as traditional public healthcare research and learning areas. Hence its natural inclusion as a research area at CERGAS and the need to introduce the subject in various university study programs, including economic studies, as has occurred this year at Bocconi. Along with new skills, future managers of global healthcare will need to also acquire the understanding that health should be defended and promoted as a fundamental human right and a common global good. The Author Eduardo Missoni, a physician specialized in tropical medicine, is Coordinator of the Research Group on Global Health and Development at CERGAS, the Center for Research on Health and Social Care Management at Bocconi. He was Secretary General for the World Organization of the Scout Movement (WOSM) from 2004 to 2007. He also teaches at Università Bicocca in Milan and is Visiting Professor of Ethics and International Organizations at the IOMBA of the Université de Genève (Geneva). Research Areas Global health and development. Management of international non-profit organizations and institutions. Development cooperation.


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Art: The Usual Exaggeration by Stefano Baia Curioni

An analysis of the three drivers for growth in the contemporary and modern art system after the recession. How things have changed in the market, how they’ve returned back to normal and why a tendency for unbelievable records is returning once again.

Blackout. When the financial crisis was exposed in 2008, the art market went from frenzied to petrified, as if it had looked Medusa in the eye. Liquidity dissolved in New York and London, but especially in emerging markets: it stopped. In 2009 ArtBasel was a triumph of small proposals and gallery owners unofficially halved prices for the great masters. Then the markets rediscovered a tendency for records and the “normal exaggeration” of international capitalism. Prices of tens of millions of euros reappeared for the work of individuals such as the Transylvanian Andy Warhol, the champion of a despairing and irredeemable marginality who is today on the altars of a value devoid of humanly comprehensible parameters. Is everything back to normal? Maybe, but was it normal before? Maybe not. The framework of the pre-recession contemporary and modern art system was characterized by three main drivers of change. Increase in demand: the number of collectors has changed over the past decade, along with their economic availability and their choices. The nouveau riche in finance and emerging countries have come into the limelight: first promoting European and American art and then projecting new artists from various countries to skyrocketing values. Market dynamics caused new actors (funds) to be created that emphasized the financialization of the art system. Transformation of the brokerage system: an increase in demand occurred along with technologies that could disintermediate the system’s traditional gatekeepers, that is, galleries, museums and critics. The particular nature of the art system has prevented this disintermediation from reducing the length of chains of distribution, increasing market efficiency. On the other hand, the role of galleries has increased with the creation of large international organizations capable of integrating production and promotion by increasing the overall supply of works. If other intermediaries capable of hybridizing museum and commercial areas have been developed

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they are trade fairs. Their presence on an international scale has multiplied, producing opportunities for dramatic presentations, collectors imitating behaviors, and new forms of expression. The third driver is the concentration on repertoire and icons. The complexity of the system that has increased both in size and the extent of its range of action in a short time has concentrated collective attention on a narrow repertoire of global icons, simplifying greatly. All three of these transformational elements are still active today. What has changed is the overall system, because the recession has reacted differently on the private sector of galleries compared to what has happened in the public area of museums. The scarcity of resources touches upon the public sector – partly due to the sheer number of institutions (over 200 new buildings in ten years) – much more drastically and less reversibly. In the medium term the system will be more private and more oriented toward the market. Will this be positive or negative? Research projects and experiments will plausibly focus on larger museums or they will get lost in independent projects with low budgets. Cultural institutions will be more bound to tasks of sophisticated entertainment. But the main challenge will remain in the background because the art market is not simply a trade system. It is a way of establishing art in the contemporary, making art possible and making it able to withstand (at least a little) the fierce game that extracts art from the artistic and philosophic fields. This reduces it to a simulacrum of the possibility of redeeming the interchangeable and provisory nature of the meaning of life, part of a time in which all metaphysical substances, from objects to everyday gestures, tend to be uprooted. Therefore, the question for the future is: Can the market be a cure for nihilism? For the answer, we have to wait for the fall sales... The Author Stefano Baia Curioni is Associate Professor of Economic History at Bocconi, where he is Program Director of the Master of Science in Economics and Management in Arts Culture, Media and Entertainment, as well as Vice President of the ASK (Arts, Science and Knowledge) Center, where he acted as Director between 2004 and 2009. He was General director of the ERGA Foundation, created by Università Bocconi and the Scuola Normale Superiore di Pisa, from 2005 to 2009, and a member of the advisory board of Palazzo Te in Mantova from 2008 to 2009. He was also a part of the Commission for the Valorization of Italian Heritage, appointed by the Italian Ministry for Artistic and Cultural Goods and Activities. Research Areas History of thought. Analysis of institutional development of Stock Markets in Italy. Cultural goods and activities.


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Once upon a Time There Was Photojournalism by Marina Nicoli

Is anyone still willing to show us children harmed by napalm and the tanks of Tiananmen Square? Some would like to, but traditional print media no longer fund pictorial reportage because new technologies and business models have changed the whole game.

When talking about photojournalism, we cannot help but remember the images which contributed to creating our visual historical memory: the child harmed by napalm in Vietnam, the student in Tiananmen Square standing in front of the tanks, or the survivors of 9/11 covered in a shroud of powder. We live in an age which is saturated with images, with a constantly expanding market (it is estimated that in 2013 the digital photo market will come close to 213 billion dollars), and yet paradoxically photographs seem to have become background noise. Photographic language in daily newspapers and magazines has been confined to simple characters, illustrations or space-fillers. Less frequently, editors will assume the risk of investing in the production of new photo reportage, since the web allows us to access an enormous database of images whose costs are a joke. According to the research study, The Commoditization of Images: The Changing Landscape of Photojournalism, the fact that some of the most important agencies have closed over the last few years (Gamma, Sygma, bought by Corbis, L’Oeil Public, Grazia Neri), competition from an increasing number of amateur photographers, and the spread of stock sites and royalty free offers (where one is able to buy an image for an infinite number of uses for less than 50 euro) have caused experts in the sector to sing the “de profundis” (psalm of penitence) with respect to the photojournalism profession, while they report that the visual information offered to readers is progressively worse in terms of quality. The state of crisis in the market for informational photography is generalized at the international level and is the result of changes that registered in the 90’s, when the technological standard moved to digital technology. While digital technology has both increased image production and beaten down development timeframes and costs, internet has also encouraged the speed of circulation.

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At the same time, the market has seen the birth of new kinds of online intermediaries like Getty, Corbis and Jupiter, which have progressively bought control of the market by offering images at competitive prices and taking over some of the most important traditional agencies. During the twentieth century, agencies played a fundamental role not only in intermediation between photographers and editors, but also in guaranteeing the quality of photojournalistic services. The editorial crisis then added another element to the story: a decrease in readers, the collapse of the press’ economic support base (classified ads) and the growing role of digital journalism as the main source of information all contributed to justifying the cuts which editorial teams made on staff photographers and on new reportage production. The questions which arise from such transformations are at the center of the debate about the future of photojournalism and more in general about traditional media: what will substitute all that we are losing? Will new information media guarantee that the iconographic content offered is reliable? Are photographic agencies still valid intermediaries or can that role be carried out by new technologies on the web? In order to survive agencies have tried to adapt themselves, sparking a price war which has brought about an increasing lower investment in the production of new photographic content. After some agencies closed their doors several alternatives have begun to sprout, which could represent the new economic model for photojournalism in the twenty-first century. These include the birth of photographic collectives, crowdfunding (financing through micro-donations), and financing offered by non-profits. So maybe it is time that we ask ourselves this question: Is photojournalism dead? The Author Marina Nicoli is a Research Affiliate at the ASK (Art, Science and Knowledge) Center at Bocconi.


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Italy Lags Behind in Women at Work by Paola Profeta

In Europe, only Malta does worse than Italy when in comes to female employment, so Lisbon’s objectives in terms of activity rates remain distant. And within Italy, great differences persist between North and South when it comes to matters of gender equality and social attitudes.

Italy trails behind in gender equality at work. The female employment rate is only 46%, next before last in Europe: only Malta does worse. Thus the objective, set in Lisbon, of a 60% employment rate by 2010 remains distant. Furthermore, the 75% objective for men’s and women’s employment rates by 2020 seems a mirage. But Italy is mixed and cross-regional gaps are large: while the North has a female employment rate of 56%, which is not too far away from the Lisbon targets, the South stays at a paltry 31%. However North-South differences are not as large when it comes to male employment rates. The same can be said for education rates. In South as in the North, women with a college degree have outnumbered men and the percentage of people having a university degree are similar in the two areas of the country. So it would seem that in the South there are factors holding women back and leading to low female employment and lack of valorization of their talent and educational capital. What are these factors? In my research studies with Alessandra Casarico, collected in the book Donne in attesa: l’Italia delle disparità di genere [Women in Waiting: Italy and Gender Disparity], published by Egea this year, in addition to features of the labor market and the role of institutions, we investigate the family factor: in Italy the division of labor within the couple is very unbalanced, with women devoting a lot more time to domestic labor and family care, while men are engaged in the labor market. This pronounced sexual division of labor depends on cultural values and social norms which tend to reproduce it and are daily reaffirmed in the attitudes of individuals and firms. We thus asked ourselves if the heterogeneity of gender employment differentials could be explained, in part at least, by cultural factors. It’s what we have done in a research study that draws data from the Italian provinces (Campa, Casarico, Profeta, Gender Culture and Gender Gap in Employment, CESifo Economic studies, forthcoming). In the study we tried to measure gender culture by using two complementary indicators.

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The first attempts to capture individual preferences and is based on the answers given to questions of the World Values Survey: To be a homemaker is as satisfying as to be in employment? Does a preschooler suffer when the mother works? When work is scarce, should men be given priority over women? Higher percentages of affirmative responses indicate a more women-adverse culture. To get an idea, 81% of Italians answered yes to the first question against a European average of 50%, with much higher percentages in the South with respect to the North. The second measure was based on the planned hirings and gender preferences in a sample of firms taken form each province, as polled by Excelsior for Unioncamere. According to the data, 41.4% of Italian firms state they’d rather hire men, only 17.4% prefer women, and the rest is indifferent. Again, the percentage of gender-neutral firms is much lower in the South than in the North of Italy. Our econometric analysis shows that, after controlling for a series of relevant factors (labor market characteristics, availability of part-time jobs, socio-demographic characteristics, institutional context), in the provinces where cultural indicators show openness to working women, gender employment differentials are lower. This is true when we consider both our indicators for culture, showing that the result is rather robust. The South is saddled with a culture which is more adverse to women in employment: people would rather maintain the division of labor within the couple, and firms are less ready to hire women. There’s still a long way to go for women to prove their worth at work. The Author Paola Profeta is Associate Professor of Public Finance at Bocconi. Research Areas Public economics. Welfare systems (pension, education). Gender economics. Comparative analysis of taxation systems.


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The Economics of Influenza by Guido Alfani and Alessia Melegaro

Global pandemics: it’s by looking at the past that you can plan for effective intervention, keeping in mind the differences between a deadly disease like bubonic plague and relatively benign maladies – as the swine flu turned out to be.

The word pandemics has caused much confusion during the recent crisis provoked by so-callled swine flu (A/H1N1). Alerted by the World Health Organization in June 2009 that pandemic contagion was in the making, the planet’s inhabitants were left to wonder how many victims the influenza would take. In fact, the etymology of the word pandemic refers to an epidemic potentially able to spread its contagion across all peoples in all continents. The historical record provides no comfort. In Italy, the 1347-49 Black Plague killed between 30% and 60% of the population. The 1630 bubonic plague portrayed by Manzoni in The Betrothed killed two million people in the Northern part of the peninsula only. The relatively benign 1918 influenza, now used as reference for the worst-case scenario of influenza pandemic, caused 300-400,000 deaths. What was to be expected from swine flu, then? Immediately after the alarm, people scrambled to stock up antivirals or organized swine flu parties to get immunization before the presumed breakdown of the health care system. In the end, the final death count did not go beyond a few hundred victims in Italy: less than those caused each year by the common winter flu. In fact, pandemic does not mean high mortality, but rather high diffusion of a disease. In this sense, the swine flu was really pandemic, with 7 million cases between July 2009 and July 2010 only, mostly caused by the A/H1N1 virus. However, after the experience of last year, there is debate about the appropriateness of grouping lethal and non-lethal diseases in the same category. Separating them could avoid spreading unjustified alarm, which sows panic among the population and damages the economy. If the last pandemic had a radically different demographic impact with respect to medieval plagues, the same can be said about economic impact. The black plague caused a paralysis in economic activity and

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permanently altered ownership structures and economic mindsets; it sharply increased levels of inequality. It also a had a somewhat positive effect, insofar as it increased per capita resources. But even discounting these countervailing effects, the huge drop in economic activity is nowhere comparable with that caused by the pig flu. However, if we look at the amount of resources invested by health authorities and governments to face global pandemic threats, and we compare it with the real level of risk faced by each individual during the crisis, the swine pandemic stands out for the enormity of invested resources with respect to a risk which turned out to be modest. True, influenzas are unpredictable and caution was certainly recommended. But the larger question of assessing, especially in times when the economy is not florid like today, whether existing national and international intervention strategies are economically sustainable remains open. The Authors Guido Alfani is Assistant Professor of Economic History at Bocconi, where he is also Fellow at the Carlo F. Dondena Center for Research and Social Dynamics and IGIER, the Innocenzo Gasparini Institute for Economic Research. He is head of the RDB Bocconi Distribution and Concentration of Wealth in Historical Perspective, as well as a member of the international research project Mobilités, Populations et Familles (MPF). He is Chief Editor of Popolazione e Storia and member of the editorial board of the journal Genus, as well as co-founder and organizer, along with Vincent Gourdon, of the international scientific network Patrinus. Research Areas Distribution and concentration and of wealth in the modern age. Economic and social inequality. Economic trends in pre-industrial Italy. Social alliance systems and social networks. Practices of god-parenthood and name-giving. Geography of customs. History of careers. Historical demography (history of plagues and famines). Alessia Melegaro is Research Fellow at the Carlo F. Dondena Center for Research on Social Dynamics at Bocconi. Research Areas Designing effective and cost-effective control programs against infectious diseases. Mathematical modeling, statistical and economic analysis, sociological studies in order to understand how individuals mix and thus how effective they are in transmitting infections. Focus on real-world problems to enable decision-makers to optimize the design-makers of public-health control programs.


Energy, Environment & Infrastructure


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Climate Change: Everybody Waiting by Luigi De Paoli

At the COP15 in Copenhagen in December 2009, an international agreement was reached to limit the increase of mean global temperatures to +2°C. But nobody knows the amount of greenhouse gas emissions this corresponds to, and so everybody is waiting for someone else to act.

Every year, the countries that have signed the 1992 UN Framework Convention on Climate Change meet to discuss its implementation. The number of countries (i.e. the “parties”) now convening is 196. The 15th Conference of Parties (COP15) gathered in Copenhagen in December, attracting the attention of the world’s media. The climate summit ended with the signing of the so-called Copenhagen Accord (some have dubbed it the “Copenhagen Discord” because the Conference was marred by disagreements). The concluding document says that the increase in global temperature must not exceed 2 °C; that cooperation must be strengthened for the peak in emissions to be reached as soon as possible (so that the actual decrease can start), acknowledging the fact that developing countries need extra time; that by the end of January 2010 OECE and EIT countries were supposed to set emissions targets. The accord foresees financing to reduce deforestation in developing countries and the a 30 billion commitment over the 2010-2012 three-year period, which would reach $100 billion by 2020, to help less developed countries to adapt to climate change. Finally there is the creation of a Copenhagen Green Climate Fund to manage the finance of climate aid. However this commitments are vague and have not been followed by concrete acts. Let’s start with the money promised to LDCs: who pays? Who will be the actual beneficiaries? Secondly, what’s the level of concentration of CO2 that corresponds to +2°C? We don’t know for sure, and the Copenhagen Accord, lacking operational aspects, doesn’t help to do something about that, either.


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Let’s take the Kyoto Protocol, which at least contains targets for emissions reductions. To date, no industrialized economy has presented emission reduction plans, as they were supposed to do, at the end January 2010. Neither have LDCs. It shows that the COP15 approach has led negotiations into a dead end, where nobody is willing to give concessions, if others don’t move first. The conclusion of the United Nations Climate Change Conference in Copenhagen has reasserted a few concepts. All countries must be involved in fight against climate change. Everybody must give its contribution, and the solution cannot be left to voluntary initiative of individual countries. Addressing climate change comes at a cost. But it can’t be 200 actors deciding what to do. It makes sense to restrict the number of key players to the major powers, and then aggregate the others. Europe could have shown strength in unity by sticking to its plan of a 20% reduction in greenhouse gases by 2020. However, when push came to shove, it made a show of its disunity in Copenhagen. European countries had better mend their ways, if the EU is to emerge as a key negotiator in climate policy. The Author Luigi De Paoli is Full Professor of Applied Economics at Bocconi. In the past he has taught at the University of Palermo, the University of Padova, Université des Sciences Sociales in Grenoble and SPRU, the University of Sussex in Brighton (UK). Research Areas Economics and policy of energy. Industrial regulation and policy. Public services. Economics of state-owned enterprises. Environmental economics.



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Italian Infrastructure: Priorities for North and South Are Not the Same by Lanfranco Senn

Public works respond to different needs according to the territory: roads, bridges and railways are usually built to match emerging demand. If the political imperative is to accelerate regional growth, proper sets of incentives need to be devised, with an eye on production and consumption levels.

The role of infrastructure in economic development is still controversial: there are research studies pointing toward very positive impact, and others that tend to demonstrate that infrastructure has almost no economic impact. In Italy the debate has focused on the appropriateness of investing more in infrastructure either in the South, because of its relative backwardness, or in the North, because it’s relatively more advanced and in need of removing external diseconomies that affect its international competitiveness. No matter if you talk transport, energy, water resources or telecommunications, infrastructure in the North and in the South respond to two different sets of development objectives. While in North the emphasis is on removing constraints impeding further development, in the South built infrastructure serves to create conditions of economic attractiveness for firms and citizens alike. However infrastructure alone is not able to accelerate Southern development in a self-sustaining process: highways and airports, harbors and railways do not trigger a virtuous circle if demand coming from production and consumption entities is insufficient. Betting on the development of infrastructure in the South must thus be accompanied by public incentives in terms of the cost of setting up and doing business, of security, good administration, services to companies and households. Otherwise the risk is to build infrastructure irrespective of the implicit or explicit demand for the services the local economy can express (for example, in relative terms, the South has a larger endowment of transport infrastructure than the North!). On the other hand, in the North reducing congestion and pollution in road networks, achieving security in energy supplies at reduced costs, better quality in water services are important for business competitiveness. In


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this case, demand is already existent and infrastructure aims at qualitative rather than quantitative improvement. Malpensa airport already exists and the challenge is not to build a new airport, but making its territory more accessible for global destinations; the high-speed train network must ensure faster international interlinking; development of clean energy sources must satisfy the objectives of environmental sustainability and lower energy costs, and so on. It is thus hard to imagine a single, common set of priorities between North and South in terms of infrastructure. What’s needed is to set distinctive objectives and deploy the right tools to evaluate them. For instance, cost-benefit analysis only makes sense in relative terms, but its usefulness is very limited if the political objective is to accelerate the economic development of a less advanced region. Otherwise the North will always end up being favored, and the South being penalized. We need more sophisticated tools, such as multi-criteria analyses, to frame the priorities for infrastructure in terms of the larger development needs of the country. The Author Lanfranco Senn is Full Professor of Regional Economics at Bocconi and Director of CERTET, the Center for Research on Regional Economics, Transport and Tourism. He is Professor of Economics at SDA Bocconi, where he has held the position of Director of the Economics Department. He has also taught at the Universities of Trento, Bari, Bergamo and Università Cattolica in Milan, as well as Visiting Professor at ETH Zurich and the University of Hitotsubashi in Tokyo. He is a member of the governing committee of Università della Svizzera Italiana in Lugano. He is an expert on regional and transport policies of the European Union and President of Metropolitana Milanese Spa. Research Areas Regional economics. Urban economics. Economics of transport. Economics of services. Valuation of regional policies. Input-output analysis. Public utilities.



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Renewables, Golden Opportunity by Clara Poletti and Arturo Lorenzoni

New energy sources: business and regions still have to set their minds to meet the 2020 EU objectives. The biggest potential for growth of renewables lies precisely where Italy needs most to see economic development - the sunny, breezy South.

According to EU commitments, Italy will have to increase the share of energy obtained from renewable sources from 5% in 2005 to 17% by 2020. This is a major technological and economic challenge, requiring significant investments across the national territory. Regional administrations will have to be directly involved, since it falls on them to regulate investment outlays according to principles of rationality and sustainability. If we look at the distribution of natural resources, we see that Central and Southern Italy have the biggest potential for wind and solar energy. The 2020 target could be a unique growth opportunity, as well, since it relies on local input (labor, capital, know-how). However, if we look at investment outlays we see that growth in renewables has not occurred in the most potentially favorable regions. Take for example photovoltaic solar energy: Northern regions show a more marked investment activity. In fact, Trentino-Alto Adige has by far the highest per capita wattage installed, thanks to a forward-looking policy which has spread skills and fostered entrepreneurial initiatives and administrative innovation. Soft factors, rather than technological factors, thus account for the relative diffusion of renewables. Those include the ability to seize new opportunities, readiness to adapt to the cultural change that needs to accompany the shift to a new energy model. In order to meet EU targets on renewable energy and emissions, firms will not be the only key actors. Administration, finance, the whole of civil society will determine the final outcome, by creating, or not creating, a favorable business environment. Although virtuous examples are more frequent in the North, a Southern region like Apulia was perfectly able to seize the advantages afforded by the new industry. The region has set a national standard to follow, while there are several Northern regions that are missing out. It is likely there will be cross-regional competition to attract investment in renewables. The extra capacity will have to be installed somewhere (the EU demands it), and more efficient and adaptive regional


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administrations will come out on top. Investment in solar and wind energy will generate major spillovers in host regions, in terms of labor, knowledge, return on capital. It’s a chance that Southern regions, especially, cannot afford to miss. The Authors Clara Poletti is Director of IEFE, the Center for Research on Energy and Environmental Economics and Policy at Bocconi. She was Director of the Markets and Competition Division for the Authorities for Electricity and Gas. Research Areas Regulation. Electricity markets design. Arturo Lorenzoni is Director of Research at IEFE, the Bocconi Center for Research on Energy and Environmental Economics and Policy and Associate Professor of Energy Economics and Electricity Market Economics at the Department of Electrical Engineering at Università di Padova. He is a consultant for various organizations and operators in the sector (Authorities for Electrical Energy and Gas, ENEA, the Association of Producers of Renewable Resources, Unindustria, the National Association of Real Estate Builders, Kyoto Club, various Municipalities and various companies), and he collaborates with a number of journals in the sector. Research Areas Economics applied to the energy sector and its regulation. Development of renewable energy resources. Management of the electric power sector.



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Oil Safety: Lessons from the Nuclear Industry by Emanuele Borgonovo

After the accidents at Three Mile Island and Chernobyl, nuclear plants adopted the philosophy of defense in depth. The British Petroleum oil platform disaster in the Gulf of Mexico could provide a useful push in a similar direction for safety in the oil industry in general.

History is punctuated by processes of learning and re-learning, no doubt. Early this summer, during a Senate debate on the sadly notorious British Petroleum platform, George Apostolakis, Commissioner of the Nuclear Regulatory Commission, testified. When asked what were the differences in terms of safety measures between the oil industry and the nuclear industry, he replied “The principle of defense in depth”. This principle establishes safety as the founding axiom for every operator in the nuclear field, and one of the ongoing debates that currently pervades nuclear risk analysis in North America centers on how to measure “safety culture”. How can we find indicators that will tell regulators whether an organization is truly dedicated to safety as a basic value, or if it is backsliding on the idea of defense in depth. We must note that the actions of American safety authorities are fully transparent. In the case of nuclear energy, attention to safety is obligatory, in view of the catastrophic consequences of an accident. I mentioned learning and re-learning because 30 years ago, after the disastrous accident at Chernobyl, the nuclear industry was the object of the same questions being asked of the oil industry today about safety. The problem with risk management is to find management answers that are large-scale and, if possible, definitive. Among risk managers, a joke that commonly circulates goes like this: A guy says to his friend “Yesterday I crashed my car into a tree, but I learned my lesson. From now on, when I go that way I’ll swerve and avoid it.” And his friend says, “But when you swerve, look out for all the other trees.” Sound advice. But the absence of major accidents in the last 20 years would seem to indicate that the terribly negative lessons of Chernobyl and Three Mile Island have been learned and transformed into deep re-thinking of nuclear risk management. This disaster-free record is also positively affecting public opinion to the point


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where some speak of a nuclear rennaissance, as several countries, including the USA, UK, Germany and Italy, prepare to review their policies. With respect to other countries, Italy finds itself in a position at once privileged and disadvantaged. The privilege consists in starting over from scratch, with the chance to apply current best practice to the whole system from the outset. The disadvantage lies in the scale of the undertaking for a system of Italy’s size. The technological complexity involved would require the restructuring of the entire system, from the establishment of a safety authority to the management of the nuclear waste. Such a program must feature total transparency, both in the step-by-step communication of the decision to return to nuclear energy and in the management and regulation of its functioning. The American experience of the Yucca Mountain nuclear waste site, a $9 billion project blocked at near-completion by local opposition, is another learning moment: without transparency, you cannot expect people to trust and accept nuclear power. The Author Emanuele Borgonovo is Associate Professor at the Department of Decision Sciences at Bocconi and Director of ELEUSI, Center for Research on Analysis and Systematic Use of Information. He is an honorary member of the Sigma XI, the Scientific Research Society of North America and Alpha Nu Sigma, the Honorary Society of the American Nuclear Society. He is a member of the editorial board of the International Journal of Mathematics in Operational Research and he collaborates with the editorial board of the European Journal of Operational Research. He is a referee for Risk Analysis, Annals of Operations Research, the European Journal of Operational Research, Theory and Decision, the International Journal of Production Economics, Finanza Marketing e Produzione, Reliability Engineering and System Safety, IIE Transactions, the International Journal of Numerical Methods in Engineering, the Journal of Risk and Reliability, and the International Journal of Geographical Information Science. Research Areas Mathematical methods for analysis of local and global sensitivity. Uncertainty analysis. Risk analysis. Financial modeling. Investment evaluation. Real options. Project financing. Decision theory.


Technology and Innovation


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If Users No Longer Generate Content by Luigi Proserpio

Without a Google-like search engine for amateur content, users could end up fleeing the social web.

The evolution of the Internet risks a setback, if users reduce the amount of content they contribute to the web. The highly-touted Web 2.0 is intimately linked to user-generated content, or UGC, in jargon. Let’s do a thought experiment in which users decrease or even cease posting videos, comments, pictures: this could undermine many of the social processes that are at the basis of the second age of the Internet. Today, UGC generates most of the information mass available daily on the Net and are behind most of the emotional involvement generated by new medium. However, the sheer mass of content makes Web use hard, or simply frustrating. In theory, the Internet is a mine for niche subjects that are absent from mainstream media. In practice, it’s hard to assess the quality of sources and, more importantly, existing search tools are inadequate for the job. Four variables could determine a drastic drop in contributed contents. First of all, the low quality and visibility of content generated by users. The excess noise present on the Web submerges UGC and prevents its full valorization. It’s not a problem if navigators are mature enough not to expect large pay-offs from their Internet uploads. But it could be a danger if it frustrates users who feel shortchanged by their pro bono contributions. Too many lo-fi videos cause quality videos to stand out, but it can also lead people to subsequently overlook user-generated videos because they’re usually bad. Since a large amount of content generates comments that are distributed according to a long-tail pattern, if frequency decreases, quality could soon follow. Secondly, it’s increasingly difficult to search for UGC online. Google’s algorithmic search is not a panacea, since it obviously underrates UGC with respect to more organized and institutional online presences. And search based on users’ tags and bookmarks is still in its infancy. Thirdly, there is the question of the non-erasability of digital identities. Digital reputation and digital identity are both opportunities and dangers. Many of the messages posted online do not share the audacity of oral


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conversations. As Jimmy Wales, Wikipedia’s founder, writes in his preface to Throwing sheep in the boardroom by Fraser and Dutta, you shouldn’t fence in users because you fear their behavior will be negative or unethical. However, this optimistic position does not consider the fact that when users damage their own digital identity, it’s hard to patch it up. Many display lower care for their digital identity with respect to their physical identity, and this also has an impact on office life, when colleagues find out about your online behavior off the job. Scorn is permanent, when it is memorized in social networks. Lastly, the decreasing appeal of social networks, which are becoming less attractive also to younger users. Internet users write a lot, but the tools that generate involvement are still rudimentary. If you are a recent Facebook user, and you have a sufficient number of friends, you get a positive feeling of augmented reality. But after a few months, the thing gets boring because of the quantity and repetitiveness of the information generated by “friends”. The so-called “Facebook suicide” (deleting one’s profile) has become rather frequent as of late, because the application no longer manages to generate the warmth and freshness that leads to users’ involvement. On the Internet the search is on for a new Google, for a search engine that can really add value to content generated by users. If this occurs, we could well be facing many more years of Internet prosperity and development. If it doesn’t, times could get bleak fast. The Author Luigi Proserpio is Assistant Professor at the Department of Management and Technology at Bocconi and Professor of Organization and Human Resources Management at SDA Bocconi. Research Areas Groupware. Distance learning. Knowledge management. Organizational change driven by information and communication technology.



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Collaboration Is Now Making Hardware Easier by Emanuela Prandelli e Gianmario Verona

New forms of collaborative innovation are breaking down the barriers of physicality and making open source philosophy applicable to hardware inventions. The design component of material products can be easily shared, enabling broad-based input for improvement.

Collaborative Innovation has been considered best practice in innovation for a few years now. By CI, we mean a philosophy for the design and development of products and services that abandons both traditional vision of the innovative start-up that enjoys temporary monopoly power on its innovations: The company thus overcomes the fears raised by sharing sensitive industrial information. In fact, this is a form of innovation that embraces the opportunities afforded by the sharing of information and knowledge. CI made its debut in R&D labs in the design and marketing functions of the companies that have been more open to change both locally and globally. Cases range from co-design occurring through a web of alliances (such in Big Pharma) or in industries where innovation occurs through customers and researchers sharing experience and knowledge (Procter & Gamble and L’Oreal), to integrally co-created forms of innovation (InnoCentive, Threadless and Lego) or co-creation by communities orchestrated by the users themselves (such as in Linux). Thus CI seems to have taken an irreversible path of industrial diffusion. Today there are only two factors slowing down diffusion: the cultural outlook of many operators and the material nature of products. Overcoming fears and risks associated with the sharing of a valuable asset such as innovation represents a challenge that will require many years to be metabolized. CI imposes the abandonment of the purely economic logic of exchange (as the 2009 Nobel Prize for Economics, Elinor Ostrom teaches), in favor of an approach linked to less rational aspects, which are not easy to accept for a generation used to a proprietary notion of innovation. The second aspect concerns instead the constraints on interaction affecting tangible products. The words that enable people to co-innovate on Wikipedia, and the codes that enable Linux to appropriate the knowledge of multiple users, are a lot more amenable to CI than the products and services of traditional industries. One of the first cases of Open Source Hardware (OSH) helps us understand how to overcame the latter obstacle.


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OSH is an emergent practice in the development of various products, from synthesizers to cell phones. Hundreds of hardware inventors have started to publish their product specifications, giving life to a stream of innovations unimagined at the source. From OSH new entrepreneurial ventures have emerged. One is Arduino, the first open-source microcontroller. The firm that created Arduino (http://tinker.it) makes available online all the commercial secrets of this new type of electronic circuit: in addition to software, the company makes available to users the specifics and original blueprints of the electronic parts. By downloading them, anybody can build an Arduino by themselves and customize it to implement it within their own product, be it a personal robot or a car engine. This way, OSH has characterized itself for being that process which enables the separation of the physicality of the object from its design component. You work starting from a source code which is then adapted to a variety of products for which a solution can be imagined. CI works by stimulating the creativity and entrepreneurship of individuals. Thanks to OSH, collaborative innovation starts enjoying credibility also in industrial contexts hitherto inaccessible because of physical constraints. By doing so, it opens yet other gates to the future of innovation. The Authors Emanuela Prandelli is Associate Professor of Management at Bocconi, where she is Vice Director of the KITES Center, Knowledge, Internationalization and Technology Studies, as well as Professor of Marketing at SDA Bocconi. Research Areas Internet marketing and e-commerce. Impact of digital technology on innovation processes. Fashion management. Management of publishing companies. Gianmario Verona is Full Professor of Economics and Business Administration and Director of the PhD in Business Administration and Management at Bocconi. He is a Professor in the Marketing Department at SDA Bocconi and holds the role of Program Chair of the Competitive Strategy Division of the Strategic Management Society. He teaches at the Tuck School of Business at Dartmouth College. He is also a member of the editorial board of the Strategic Management Journal and Vice Director of the journal Economia & Management. Research Areas Technology and innovation management. Dynamic capabilities. Knowledge integration. User innovation and entrepreneurship.



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Control Freaks Fail Online by Silvia Vianello

Winter Olympics in Vancouver: What will remain after 2010? The economic potential of sport has multiplied thanks to media and sponsors. The globalization of sports is big business, but the social and urban benefits of hosting games should not be underestimated.

Online brand communities that put consumers in relation with companies and among companies are powerful marketing tools, if correctly managed. However, many brand communities fail in their intent, because in their segmentation-targeting-positioning process they define an ex ante excessively restrictive target. Also, they emphasize discussions strictly correlated with existing products. In fact, the level of control over these communities by companies is often very high, with moderators that prevent consumers from posting comments if they do not meet rules that are just too stringent. The net result is that consumers participate (if they do at all) in these online communities for purely selfish purposes, i.e. if they have a problem from a product or stand to gain from a product promotion. Often in this context there is no bonding or formation of relations with customers and among them, so the collaborative environment that characterizes productive communities is no longer there. Conversely, consumer-managed communities are more effective, since there are no conflicts of interest (a company could hide product defects or the details of a product launch, for instance) they empower participants to express themselves more freely about a company’s goods as well as the competitors’. They also employ less technical language, which makes them more attractive to unspecialized users. Higher freedom of expression, higher user potential, incentives to users by managers to engage in a wider spectrum of activities are all conditions that facilitate community formation. In other words, consumers are more likely to participate in these communities, because they are passionate about the brands, for emotional reasons, as well as for socializing. A veritable online community is a boon for marketing purposes, at a very low cost. You can easily test product innovation, supply high-quality post-sale services, educate consumers and increase their brand loyalty. If


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companies want to benefit from such advantages, they will have to learn that the best online communities are those directly run by consumers. Otherwise they stand to lose out in a big way. The Author Silvia Vianello teaches E-Marketing and E-Commerce at Bocconi and is Assistant Professor of Marketing at SDA Bocconi. Research Areas Digital marketing. Pricing. Pharmaceutical marketing. Strategic marketing. Green marketing.



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Now that the E-book Is Here, Let’s Make Books by Paola Dubini

Five centuries after the dawn of printing, the publishing industry is undergoing radical changes. What is the future of e-books, on what devices will we read them and how will the writing, publication, sale and dissemination of books be affected by digitization?

With respect to other industries, the publishing industry has undergone slow transformations. Until now. The traditional and still dominant technology has consolidated over the space of five centuries extremely versatile support for three forms of fruition, which are now possible with specialized devices: relaxed reading (fiction and trade non-fiction), mobile reading (paperback travel reading), and interactive reading (research and learning). The recent diffusion of increasingly functional devices is bound to make reading on paper less and less appealing. Unitil recently I was skeptical of the potential of e-books, but there are now several trends pointing toward a fundamental discontinuity that alters the trajectory of the industry. The first is the emergence of “neutral” publishing formats enables the publisher to treat texts for reading across different platforms. Then there is the digital transformation of newspaper publishing and of classroom education, which are more potent agents of social and economic change, and push firms and consumers to ride the wave of innovation. And of course we see the marketing of dedicated readers and thus of catalogs of e-book titles creating market opportunities that force various actors in the supply chain to realign their behavioral patterns toward a new direction of business development. All this could be not enough, though. Certainly, the iPad will be the cool present of Christmas 2010, and publishers know it well, and they have filled their catalogs with fall e-book titles. Still, we shold keep in mind that half of the population doesn’t even read one book per year (school textbooks excluded). And half of those who read buy no more than three titles a year, hardly a justification to purchase a dedicated costly product which doesn’t provide a sustantially superior “relaxed” reading experience with respect to an e-reader. But if the only advantage of the e-book is letting the voracious reader carry with him dozens of texts without having to lug a heavy briefcase, then the change won’t be radical enough. But if we think about all the digital


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services that can enrich a travel guide or a college textbook, then the e-book opens the gates to a future of innovation and market expansion. It will take time to see written works that fully seize the opportunities offered by the new devices, but I think the time has come for a different economics of book publishing. Amazon and Apple have done their share. Now it’s for publishers to make their move. Or Google. The Author Paola Dubini is Associate Professor of Business Administration at Bocconi, where she is Director of the ASK (Art, Knowledge and Science) Center. She is a senior faculty member of the SDA Bocconi Strategic and Entrepreneurial Management Department, where she is also a fellow of the DIR Claudio Dematté Research Center. In addition, she teaches Economics of Culture and Economics of Editorial Companies at the Università degli Studi of Milan faculty for Literature and Philosophy and Coordinator of the Economics section of the Master for Publishers, offered by the Università degli Studi of Milan, the Italian Publishers Association, and the Mondadori Foundation. Research Areas Business models in the in information and communication industries. Economics of firms working in the arts, culture and tourism sectors. Attractiveness and competitiveness of territories. Entrepreneurship. Business Administration and Business/Corporate Strategy.



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Web 2.0 and Gen Y: the Hidden Truth by Leonardo Caporarello and Giacomo Sarchioni

The mere possession of a larger number of electronic gadgets doesn’t necessarily indicate better knowledge of them. In fact, a Bocconi study shows that technical understanding among younger users is surprisingly low - what’s new is their openness to interaction.

Talk of Web 2.0 has been around for a few years now. Newspapers, TV, Internet sites employ this term repeatedly. With respect to the 1.0 version, Web 2.0 represents a different mode of network behavior based on the active participation of and interaction among its users. There’s also a widespread view that individuals belonging to so-called Generation Y, also known as Millennials, i.e. people now having between 20 and 35 years of age, hold the key to the secrets of the new Web: but is it really so? At SDA Bocconi’s Learning Lab, we decided to conduct a study to verify the level of knowledge of the 2.0 phenomenon held by Gen Y youngsters. A preliminary analysis of the data gives pause for thought. First of all, it emerges that respondents have a rather superficial knowledge of the Web 2.0 pheonomen. They were able to correctly recognize logos of famous social networks, tell the difference between 1.0 and 2.0, what is meant by cloud computing, and what is a wiki collaborative environment, for instance. But regarding some typical 2.0 tools, such as RSS feeds and Google Docs, the percentage of correct answers dropped below 20% of the sample. We then asked interviewees to what extent they were equipped with digital technology. In particular, we asked whether they had: high-speed Internet (81.5% did), 3G/UMTS cell phones (74%), USB Internet access (63%), LCD/Plasma screens (67%), Pay-Per-View TV (48%). Is there a relation between the amount of techology you own and the level of Web 2.0 knowledge? To better answer this question, we divided the respondents in two groups, according to number of correct answers given, which we called “pioneers” and “traditionalists”. The interesting datum is that there is no correlation, as might have been expected, between the fact of belonging to one of the two groups and the number of technologies to which one has access. In other words, owning a lot of technology does not necessarily imply fluency in Web 2.0.


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This result was also reported by a 2009 Nielsen study, according to which the always online Gen-Yer is but a widespread myth. Also, the same study stated that young Americans in the 12-24 age bracket, although they have access to broadband in the vast majority (90%) of cases, they spend online an amount of time (13 hours per month) which is less than half the time spent on the Internet by Generation X (aged between 35 and 54, who on average spend 40 hours per month online). The image of the always connected young person does not seem to mirror reality. Another interesting result of our study was that pioneers tend to practice more hobbies and leisure activities (travel, culture, sports) than traditionalists. The preliminary evidence points to the fact the being 2.0 is more a type of behavior based on online interaction than an actual knowledge of 2.0 tools. The typical iPhone-equipped twentysomething who is perennially on Facebook could turn out to be a lot less 2.0 than expected. The Authors Leonardo Caporarello teaches Organization and Human Resources Management and is Director of the Learning Lab at SDA Bocconi. Research Areas Analysis and business process reengineering. Organizational planning and development based on the business strategic objectives. Organizational change. Organizational behavior in the new technologies implementation process. Giacomo Sarchioni is a Collaborator at the SDA Bocconi Learning Lab.


Finance

Finance

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Overly Expansionist Sovereigns by Carlo Filippini

International finance: the IMF and OECD have supplied guidelines on sovereign wealth funds. Along with many other countries, Italy harbors growing fears about the expanding role of these funds that manage huge sums and are controlled either by China or the Gulf states.

The news has recently been reported that in early 2010 the managers of the CIC sovereign fund will visit Italy to assess the acquisition of companies and evaluate forms of collaboration with the Italian Treasury (Cassa depositi e prestiti) to co-finance large projects and small and medium firms. China Investment Corporation, this is its full name, is an equity fund controlled by the Chinese government, i.e. by a sovereign state, hence the name “sovereign fund”. Its task is to invest profitably China’s huge reserves of foreign currency. CIC started its operations on 29 September 2007 with an initial endowment of $200 billion (its wealth has now grown to almost $300 billion). CIC has invested in financial holdings, oil and mining concerns, without taking on a direct management role. It has also invested in US bonds. The general idea is that it is interested in companies that either have strong ties with their governments or have made sizable investments in China. CIC is among the youngest of sovereign funds. The earliest sovereign wealth fund, Kuwait’s, was established in 1953. In the mid-1970s, Singapore, Abu Dhabi, and the State of Alaska joined the fray. CIC also has an elder and more influential brother: Safe Investment Company controlled by the Chinese Central Bank. Sovereign wealth funds are born to invest either oil-generated revenues (Kuwait, Abu Dhabi, Alaska) or chronic trade surpluses (Singapore, China). Thus, they fulfill the useful function of augmenting international liquidity. However, oil and many other raw materials soon will soon hit their supply peak. Since sudden wealth is often a cause of inflation and waste, it can easily turn into a curse if not used with a long-term horizon. Sovereign funds are a financial innovation akin to petrodollars thirty years ago, which were mostly put back into the international financial circuit by US banks.

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On the surface, sovereign funds act like traditional investment funds, seeking favorable opportunities and high returns. In this period of economic crisis, they are often invoked as white knights who come to the rescue of ailing firms. At the end of 2008, these funds managed almost $4 trillion and it is estimated this amount will double by 2015. There are however serious reservations about sovereign funds: their culture of low transparency, if not secrecy, and the fact that geopolitical objectives often prevail over financial ones. There have been cases where control of strategic industries was sought for political reasons. Thus there are qualms in letting sovereign funds invest freely in sensitive sectors such as defense, energy, ICT, airlines, and essential raw materials. It is also feared that proprietary technological or commercial information might be unlawfully and detrimentally disclosed. In May 2008, the Working Group on Sovereign Wealth Funds was started. It is managed by the IMP and has already produced a document setting voluntary rules for investors. Also the OECD has published guidelines for recipient countries, emphasizing the need to avoid financial protectionism and promote impartial and transparent behavior. The EU has taken a similar stance, reaffirming free capital movement but encouraging the adoption of rules by sovereign funds. The Author Carlo Filippini is Full Professor of Economics at Bocconi, where he was Director of ISESAO, the Center for East Asian Economic and Social Studies and MEc, the Master in Economics. He is a Professor of Economics at SDA Bocconi, as well as a member of their Advisory Committee. He has also taught at Universtià degli Studi in Trento. He is a member of the American Economic Association, the Royal Economic Society, the Italian Societiy of Economists and Christ’s College in Cambridge, UK. Research Areas Economic development. Technical progress. The Japanese economy. Economic integration of Southeast Asia.


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Do We Really Know How to Measure Family Wealth? by Stefano Gatti

The alternatives to GDP to measure the wealth of nations are growing, and national statistical agencies are taking note. Some take into account a broader notion of well-being that considers social and environmental factors as well as income and other standard economic indicators.

ISTAT president Enrico Giovannini recently said that the share of national wealth not going to households and going to banks has doubled between 1999 and il 2008, while the share going to firms has gone down by a third. Giovannini gives us the chance to discuss two current issues: changes in Italy’s financial balances among sectors; and the appropriateness of measuring a country’s welfare with an indicator such as GDP. Financial balances measure the saving capabilities of various institutional sectors (households, firms, financial holdings, public administrations and rest of the world) and the sectors where savings are invested. According the data of the Bank of Italy, Italian households have seen their financial balance going from 4.5% to 2.8% of GDP from 2005 to 2008. The balance with the rest of the world goes down from -0.8% to -3.1% of GDP over the same period, while firms see their negative balances similarly increase, from -2.1% to -3.6%. Using 2008 data limits the impact of the global recession over statistical data, since it was virulent in 2009. Summing up, Italian households show lesser saving propensity, firms have larger financial needs and the Italian economic systems must rely more heavily on the rest of the world to attain internal financial equilibrium. With respect to households, Giovannini argues the GDP has grown more than disposable income over the 1999-2008 period. Setting 1999 equal to 100, the GDP index reached 111 at the end of the period, while family income only grew to 107. By looking at GDP, we thus record a decrease in the welfare of Italian households. However, GDP as an indicator of social welfare is being increasingly contested. French president Nicolas Sarkozy has established a committee, presided by Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi to study alternative solutions to the

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measurement of economic performance, aggregate welfare, environmental conservation, and social sustainability. The three economists have drafted 12 recommendations to make governments improve welfare in terms that are wider than those measured by GDP. The first recommendation is that any assessment of well-being should be more based on income and consumption (as well as accumulated wealth) than on production. Family income and family consumption are more direct indicators to evaluate the welfare of citizens. Also, median rather than average values should be employed to capture representative situations. In addition, the committee proposes to also take into consideration quality of life indicators, such as the sense of personal security, the degree of political representation and social inequality, as well as environmental well-being. The Author Stefano Gatti is Associate Professor of Financial Intermediaries and Intermediaries at Bocconi, where he is Program Director of the Bachelor of Economics and Finance, and member of the faculty board for the PhD in Finance. He is an official member of the SDA Bocconi MBA faculty and the TACIS Banking Management – European Economic Community program for former states of the USSR. He was Visiting Fellow at the International Finance Corporation, the World Bank Group, Washington DC, in 2000. He also took part in the ITP International Teachers Program, Manchester Business School, 2003. Research Areas Merchant and investment banking. Infrastructure and corporate assessment. Benchmarking. Project management and BPR.


Finance

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Why Young People No Longer Trust in the Honesty of Accountants by Mara Cameran and Ariela Caglio

Accounting: the findings of a poll of 1,700 students and professionals are cause for thought. People who work in accounting have a limited sense of correctness with respect to norms, while many outside the field suspect that accountants’ technical skills alone are not sufficient for the task.

Recent accounting scandals have placed the issue of ethics squarely on the table: what impact have bloated balance-sheets, managers devoid of moral scruples and swindled investors had on the public perception of professionals in business administration? Is the the profession still perceived as able to protect and serve the public interest? To such questions, which are vital for the survival of the profession itself, some answers come from a recent study conducted through a questionnaire completed by over 1,700 university students and professional accountants. At first glance, the association between ‘accountants’ and ‘corruption’ is marginal among interviewees (3% of the sample). Scandals seem not to have dragged the reputation of the profession into the mud. Is all well, then? Honor is preserved and accountants are off the hook? A more attentive analysis highlights the fact that most opinions are close to neutrality (on a scale from 1 to 5, 3 is the indifference point and the mean of the sample is 3.3) and that opinions vary for subsets of the sample with respect to the accountants’ perceived integrity. For instance, women’s answers, when compared to men’s, give a more positive image of the profession, while older people tend to have a more favorable perception than younger people. Also, those who have studied accounting in high school are more sensitive to the ethical issue that those have studied accounting in college. Such evidence stresses the need to address the issue of professional ethics in a more explicit fashion, with the aim of providing tools to recognize morally ambiguous situations and act

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accordingly. Lastly, those who have longer experience working in accounting have a less favorable opinion of the profession compared to those who have just started working in business administration. Is this a matter of hands-on experience? Anyway, the signal is that ethics should the object of educational emphasis and continuous retraining. The study also looked into actual spheres of behavior that are associated with the abstract notion of ethics. At the aggregate level of the sample, these aspects not surprisingly include respect of the law, confidentiality and commitment to work. There is however a perception gap among those who are practitioners and those who are not. For instance, for those who work for auditing consultancies, to be ethical means respecting the law and being honest. However those who do not practice and do not have the intention of practicing accounting have a larger view of what it means to be ethical, adding personal traits that go beyond a generic call for the respect of norms. What’s being questioned is the idea of professionalism and correctness linked to the command of technical and specialist skills, as people underline the necessity of certain soft skills, such as team-building and the ability to share information and knowledge, to be put at the service of the rest of society. The Authors Mara Cameran is a Researcher in Financial Accounting at Bocconi where she is Director of the Specialized Master Program MAAC (Master in Accounting, Auditing and Control). She is a member of the advisory board of EARNet (European Auditing Research Network) and an editorial board member for Auditing: A Journal of Practice & Theory and Issues in Accounting Education. She is also a referee for the International Journal of Auditing, European Accounting Review, Family Business Review, The Service Industries Journal, Rivista dei Dottori Commercialisti, and the journal Financial Reporting (formerly Revisione Contabile). Research Areas The Italian auditing market with particular reference to the analysis of the dynamics between supply and demand and prices of services. The reputation of auditing firms in Italy. The image portrayed by accountants. Ariela Caglio is Assistant Professor and part of the teaching faculty of Planning and Control at Bocconi. Research Areas Management accounting in networks and in hybrid organizational forms. Cost measurement and management in supply chains. The impact of information technologies and communication on administrative systems and administrative professionalism. The business plan.


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The Altruism of Saving by Brunella Bruno

Recent studies have shown Italian savings rates on the decline, along with other economic indicators. But it is precisley in this time of crisis that we need to remember the social and moral benefits of saving, quite apart from economic factors.

Saving is income not spent, or deferred consumption. Savings have been under the spotlight since the crisis. Those most heavily affected by the global crisis were the individuals, companies and nations who had saved less. The tale of the ant and the grasshopper says as much: it’s in tough times that the grasshopper finds neither food nor shelter. In its latest reports, Bankitalia says the net position of Italian households is worth 2.8% of GDP, down from 4.5% three years earlier. Similarly, the drop in investment has not reduced the indebtedness of firms, which has instead climbed to 3.6% of GDP at the end 2008, from 2.1% at the end of 2005. In the spring of 2009, as they looked into the macroeconomic causes of the crisis, the Bank for International Settlements and Financial Services Authority highlighted the existence of global imbalances expressed by the differential in saving propensities between emerging economies (such as China) and advanced economies (such as the US). This imbalance in terms of saving rates led to capital movements from emerging economies toward capital-rich industrial economies, and consequently to an excessive current account deficit in the latter. This phenomenon, combined with low interest rates, triggered a credit boom which also involved the share of the population with low incomes and/or zero savings. Thus credit became a substitute for savings for the purchase of real estate property and the financing of consumer goods. Until a few years ago the emphasis, also in relatively parsimonious economies such as Italy, was on consumption. Even after the crisis, governments have highlighted the importance of consumption in driving domestic demand. To this day, there are those who are perplexed by economies (such as Germany) which defend their choice to save and refuse to take the place of the US as drivers of world demand. It is as if the act of saving were synonymous with a closed and selfish economic model, and the act of consuming signaled altruism and progress. However article 47 of the Italian Constitution states that the

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Republic protects savings and favors popular access to home ownership for families, and property of the land for farmers, and to the direct and indirect investment in the big production complexes of the country. This constitutional principle lends itself to the following comment: in a society such as ours, where the unspent part of cashed incomes goes into the financial system and thus is reinvested into the economy, individual savings do have the highest social meaning. The decision to save is inherently moral. To save means to care about your dear ones and to care about the future, which means fearing worse times and hoping for better times. In their first course in finance, students are taught that savings are worthy of protection, because they drive credit and economic growth. Financial savings are not about selfishness. To the contrary, they are about the future and about concern for oneself and the others, your family and your nation. The Author Brunella Bruno is Tenured Researcher in Financial Markets and Institutions at Bocconi and teaches in the Banking and Insurance Division at SDA Bocconi. Research Areas Banking. Credit risk management. Credit risk transfer. Art as investment.


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The Phenomenology of Business Scandals by Alessandro Zattoni

Six traits of corporate behavior can be warning signs of potential wrongdoing; among them are artificially fast growth, financial trickery, short-term thinking and plain old greed. It is easy to pinpoint such faults after a crisis, but regulators should monitor them as a preventive measure.

When a business scandal hits a major company, public opinion points the finger at models of corporate governance and calls for new legislation to strengthen ex ante controls and ex post sanctions. However, it takes only few years for other companies to become enmeshed in financial crisis. Illicit behavior seems to be able to escape all controls by becoming ever more sophisticated. Also, if corporate controls are pushed too far, they will end up stifling the animal spirits that propel companies toward growth. Is it then impossible to prevent mismanagement and fraud? No, it’s not. But the analysis of corporate scandals exhibits certain typical traits, whose presence should ring the bell for supervisory bodies. Firstly, rapid corporate growth by means of acquisitions. M&As are often disastrous for company accounts, but it takes years for their effect to become evident to investors. Also the blind pursuit of size can distract managers from current operations and the core business. Finally, acquisitions make a company’s balance sheet murkier and harder to compare with the past. Secondly, the heavy recourse to financial markets. Iffy companies often use financial leverage to feed corporate growth and achieve astounding short-term results on their stock. The enthusiasm of business analysts and the halo of success hovering over management push investors to buy stocks without asking too many questions and loosen the supervision of corporate governance. Thirdly, the excessive power of top management. Such companies are usually run by professional managers or major stockholders who dominate the decision-making process. They usually identify the company’s fortunes with their own personal success, personalize relations with stakeholders and are richly compensated in exchange. They care about reputation, but only because financial markets are skittish about it. Only aterwards do the nefarious effects of their excessive ambition become evident.

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Fourthly, lack of independence and competence among the supervisory board. Listed companies are subject to a multiplicity of controls that should stave off gross misbehavior. But the many cases of companies going bust because of financial wrongdoing show that this is not the case, because conflicts of interest prevent supervisors from working effectively. Supervisory boards require mutual collaboration and trust with respect to management. Excessive deference vis-à-vis top management can determine a breakdown of the whole system of controls. Fifthly, a company culture based on greed and strong emphasis on financial speculation. Not all scandals and wrongdoings amount to corporate crimes. Often risky moves are made in the hope that a difficult business predicament can improve in the near future. But once the bounds of legality are crossed, it’s hard to go back. The last telling factor is the overemphasis on short-term value and earnings, and the pressure on managers to achieve them quickly. Under such circumstances, corporate executives can be tempted to cut corners and pursue illicit solutions, in order to maintain performance and reputation. However, the prolonged fall of markets and stagnation of the economy makes all too evident the reckless moves made to prevent a corporate crisis from becoming apparent. In the end it’s the financial markets themselves, which, after facilitating its meteoric rise, hasten the downfall of corporate hubris, with devastating effects on all stakeholders. The Author Alessandro Zattoni is the Director of the Strategic and Entrepreneurial Management Department at SDA Bocconi and Full Professor of Business Administration at Università Parthenope in Naples. Research Areas Strategic management. Strategic management of small and medium enterprises. The business plan. Corporate governance, focusing on institutional organization of companies, corporate groups, board of directors and stock options.


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Calculating Regret by Alessandra Cillo

An experiment published in Management Science shows that emotions and regret play a surprisingly important role in decision making. But is it really possible to quantify just how much these irrational factors influence the choices of investors or managers?

The processes behind decisions, particularly financial decisions, are extremely complex. Rarely decisions are solely based on reason. Fear, anxiety and regret are come of the emotions that come into play when we have to make important decisions. Choices are made based on both economic and emotional evaluations: this explains why decisions are rarely optimal, or rather, different from what sound economic models would predict. Look at the current financial crisis: if investors had acted as rational agents the crisis would have probably never happened. Growing evidence suggests that decisions are also influenced by emotions. A recurrent phenomenon is this: investors are reluctant to take losses and want to make gains. There’s nothing wrong with this, save for the fact that this makes people hold on to a stock longer than necessary when its value drops (in the hope it might climb again) and, conversely, to sell it at the beginning of a steep rise, i.e. too early. Various studies have sought to uncover decision models able to capture this phenomenon. The theory of regret is one of these. Developed in the 1980s, this theory argues that the choice among alternatives springs from the minimization of regretting over choices wrongly made. Leaving philosophical considerations over the nature of rationality aside and whether emotions are part of it, there is a basic fact: most of the empirical evidence shows that emotions play a major role in decision-making. A practical question then emerges: if emotions play a key role, who can we quantify them? Although a hard and counterintuitive task, we have to try to calculate emotions. In a recent article, “A Quantitative Measurement of Regret Theory”, which I co-authored on Management Science with Han Bleichrodt if the Erasmus School of Economics and Enrico Diecidue of INSEAD, we have managed to measure the effects of regret. The research study propounds a methodology, by gathering and analyzing data coming from experiments conducted on economics students.

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The theory of regret is able to provide a rationale for attitudes that violate the transitivity property in preference theory (if I prefer A to B, and B to C, then I must prefer A to C). Investors that violate transitivity are more exposed to the phenomenon of so-called money pumps, i.e. dynamics that subtract money from the decision-maker without improving his situation, but rather leaving him in the initial situation. Consequently, a methodology able to measure regret, is also able to inform investors about the risks of making choices biased by it. The Author Alessandra Cillo is Assistant Professor at the Bocconi Department of Decision Sciences. Research Areas Theory and experiments in decision under risk and intertemporal decision making. Risk-value modeling.


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How to Hedge Your Bets for a Toast of Burgundy Pinot Noir by Claudio Zara

Weather derivatives are useful financial tools for protecting income in climate-sensitive industries. The case of the wine-making sector is instructive for any agricultural area that is subject to non-insurable weather risks, such as prolonged drought or an early frost.

There is a particular category, in the cauldron of derivatives, the financial instruments that have been accused of being the trigger cause of the financial crisis, which could be fundamental to protect income in weather-sensitive industries (30% of world GDP, source: WRMA). It’s weather derivatives. An example is provided by the wine-making industry. In vineyards, open-sky wine factories, the climate has a significant impact on the quality and quantity of grapes and thus affects wine production. In the context we are developing, there are two kinds of risks linked to climate events: catastrophic risk, i.e. a major-impact random event (e.g. hail), and systemic risk, which is highly recurrent (temperature variations with respect to the forecasting model. Catastrophic risk, when possible, is defrayed through an insurance contract (such as insurance against hail risk). Normally, systemic risk cannot be reduced through an insurance contract due to its being a recurrent hazard. Currently, wine-making firms can develop strategies to hedge against risk by implementing non-financial strategies, for instance installing irrigation systems to offset the lack of rain, or planting vineyards in areas that have complementary pedoclimatic conditions (for example, the region of Trento DOC in Italy or Napa Valley in California). These can run against constraints, both in terms of territorial limits which prevent geographic hedging (such is the case of Franciacorta DOCG), and in terms of the amount of investment that needs to be sustained. An alternative could be coverage against climate risk by using a hedging strategy based on the purchase of a weather derivative, as I proposed in an article of mine which was recently published on The International

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Journal of Wine Business, titled “Weather derivatives in the wine industry” and focusing on the production of world-famous Pinot Noir grapes in Burgundy. What type of risk per hectare linked to temperature and precipitation did a Burgundy vintner incur in the 1998-2008 period? Eight years out of eleven (i.e. in 73% of cases) the bioclimatic index which summarizes temperature and rain trends recorded occurrences which were significantly different from optimal values. This situation had effects in terms of actual with respect to theoretical yields, and of lower quality of the wine made. In economic terms, it translated into a loss of €3,354 per hectare and in the high volatility of yields. As a consequence, remaining uncovered meant not only losing money with respect to expected returns, but to be subjected to year-to-year variability of yields, creating uncertainty and undermining the planning of investment. A hedging strategy that employs weather derivatives provides coverage against temperature, rain, and wind hazards. In the case studied, a potential economic gain of €91 per hectare and a -21.43% decrease in yield volatility could be envisaged by purchasing a weather derivative. In particular, the financial coverage provided is optimal under the following combination of production factors: homogenous terrain and a single grape variety. The same strategy can be extended to other high-value-added harvests, such as fruit production, to stabilize agricultural income. Finance can thus supply a high-value service to weather-sensitive industries, because it is able to contribute to higher business income stability, and, consequently, to more favorable scenarios in terms of a firm’s management and development. The Author Claudio Zara is a Researcher of Financial Markets and Institutions at Bocconi and Professor of Banking and Finance at SDA Bocconi. She was a Visiting Fellow at the Research Bureau of the Warwick Business School, University of Warwick, and the Department of Accounting and Finance of the National University of Singapore and has completed the ITP Program at the London Business School. Research Areas Corporate and investment banking. Financial analysis, corporate valuation and intangible assets. Organization and management of financial investors.


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The Crisis Has Broken a Convergent Path by Maurizio del Conte

Since 2008, employment has dropped in the Southern regions, where the employment rate was already comparably lower. Without a concerted effort to rebuild labor relations and create incentives for manufacturers, the North-South gap will only widen.

Recent Italian labor force data put into stark relief the dramatic social gap between the Northern and the Southern regions of the peninsula. The slow progress toward convergence between North and South was brusquely interrupted with the crisis that started in 2008. As a result, employment dropped sharply in the Southern regions, three times faster than in the rest of Italy. And the employment rate was already dangerously low there before the crisis: in 2007, it was 46.5% in the South (people between 15 and 64 years of age) compared to 65.4% in the Center and Northern regions. The historical backwardness of the South can be seen by looking at the existing wage disparity, whereby wages are 20% lower than in the North. In this regard, the Bank of Italy has recently commented that “high unemployment and the informal economy suggest that the cost of labor, although lower than in the North, is still too high to balance labor demand and supply, given the accumulated productivity lag. In the absence of wage flexibility, migration is the force driving the equilibrium between supply and demand.” The problem is that today migration drains the more highly educated human resources from the South, while reinforcing the vicious circle of quantitative and qualitative depreciation of the “Mezzogiorno’s” labor and production assets. The symbol of South’s industrial decline is FIAT’s decision to shut down the Termini Imerese car assemby plant in Sicily, and to drastically downsize Pomigliano d’Arco in Campania, while at the same announcing €8 billion worth of investments, mostly going to the plants in Northern Italy. FIAT’s disengagement from the South is the tip of the iceberg of a much larger movement away from the region affecting small and medium firms. The country’s economy just can’t afford that. What is to be done, then? Since the political horizon still seems clouded, there needs to be a positive supply shock affecting the Southern manufacturing base, so that struggling companies can be allowed to survive.

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Industrial relations are key in this respect. Before the crisis many had observed that unions were a thing of the past, linked to the phase of large-scale manufacturing. But the current crisis shows that good industrial relations are fundamental to finding viable and effective solutions to the crisis. The problems of the South can only be solved by a new system of labor relations that binds private investment and public incentives to the local territory and experiments with new forms of manufacturing and compensation flexibility. It takes incentives to make employment in the South attractive to those seeking it. It takes unionists and managers that are less attentive to political factors and more focused on collective bargaining. All this requires that labor unions and associations of industrialists stop being paternalistic about the South and start delegating decision-making powers to their territorial actors, in the key areas of wages, labor organization and on-the-job training. The Author Maurizio Del Conte is Associate Professor of Labor Law at Bocconi. Previously, he worked in the Department of Education Sciences at the University of Milan-Bicocca. He was International Visiting Professor for the Comparative Labor Law program at the University of Richmond, School of Law (Virginia) in 1999-2000 and 2001-2002. He has also taught at the University of Tokyo, the University of Kyoto and the University of Kobe. He is editorial coordinator of the journal, Orientamenti della giurisprudenza del lavoro and a member of the editorial board of the journal Diritto delle relazioni industriali. Research Areas Labor law. Trade union law. Comparative labor law. Private law.


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Made in Italy Protected by Law by Giorgio Sacerdoti

Legislation has been passed to guarantee the origin of upscale Italian products, but it could end up having some unintended consequences. It also signals a siege mentality, a protectionist frame of mind that could ultimately run against the market priorities of Italian exporters.

The Italian Parliament has passed the Reguzzoni-Versace-Calearo bill, which responds to the pressing calls coming from Made in Italy manufacturers to obtain protection for high-quality goods manufactured in Italy. Producers are exposed to low-cost competition from developing countries, not to mention the threat of counterfeiting. The request was thus to introduce the compulsory labeling of imported goods to signal their origin to the consumer. This what many other advanced countries, including the US, require by law. It is however a matter of EU competence, and major economies such as the UK and Germany are resolutely opposed to such a move. Only an intervention of MEPs, recently empowered on the issue by the Lisbon Treaty, could break the stalemate. This is why Rome has taken a different route to compulsory labeling. On the one hand, the new law introduces a system of labeling for finished products in textile, leather and shoes, highlighting their origin at each stage of production and ensuring their traceability, according to modalities to be specified by implementation decrees. On the other hand, in a more precise and innovative way, the law reserves the “Made in Italy” label for those shoes, suits, dresses, belts, purses, couches etc., where at least two major stages of production have taken place in Italy. After so much discussion, Made in Italy is now finally protected. The objective is to enable consumers to distinguish between domestic and imported products; fake labeling will be severely punished. The implicit idea is that a higher price corresponds to higher “Italian quality”, which can then be advertised and marketed, in Italy and abroad. There are however two reasons for caution. The law will come into effect on October 1st, in order to give the European Commission the time to express its opinion on the compatibility of the new Italian legislation with EU legislation. Although the Italian Parliament has steered clear of imported products, its traceability requirements

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could go against European constraints. Also, there is the risk the that the Made in Italy label turns out to be either a boomerang or a flop, because of the complexity of managing the scheme or for market reasons. Products made by our companies abroad are not protected by the label and will thus be discriminated against. Furthermore, sporting a Made in Italy label is not tantamount to a guarantee of quality! Why should the consumer be wary a priori of products that are Made in China or Made in Peru? The idea that only a domestic product is worthy of purchase and that prices are secondary variables signals a protectionist frame of mind, which ends up losing in the long term. And the new legislation is introduced at the very time when many Italian producers are outsourcing and complaining of the trade barriers that many emergent economies are erecting against Italian exports in various sectors, including many not listed by the law. The Author Giorgio Sacerdoti is Full Professor of International Law and holds the Jean Monnet Chair in European Law at Bocconi. He is a member of the Committee on International Trade Law of the International Law Association. He was President of the Appellate Body of the World Trade Organization, of which he was a member from 2001 to 2009. He has taught as a Professor of International Law at the University of Milan, the University of Bergamo, the University of Bari and the University of Urbino. He was International Fellow at the Aspen Institute (1985) and Visiting Professor at the Institut des Hautes Etudes Internationales at the University of Paris (1987). He also taught at the Academy of International Law in The Hague (1994) and was Vice President of the OECD Working Group on Bribery in International Business Transactions (1989-2001). Research Areas International law. EU law. International trade. Investments. Arbitration. International contracts.


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The Union Has Only Blunt Tools to Impose Budget Discipline by Claudio Dordi

A number of factors contributed to the Greek financial crisis, most of them linked to the EU’s weak governance. Convergence of fiscal and budget policies among member nations was left to wishful thinking rather than enforceable policy, and the results are plain to see.

One cannot but concur with former Italian Prime Minister Giuliano Amato, when he highlighted the four major factors behind the Greek crisis: the Greek governments, which cooked the national accounts in the past to mask a worrisome budgetary situation; Germany, which was reluctant to grant financial assistance for electoral reasons; the EU itself, because it lacked adequate norms and procedures to deal with moments of crisis; and rating agencies, which were benevolent toward toxic assets, but strict toward the sovereign debt of a EU member. However, the main responsibility lies with all member countries, which have been reluctant about introducing in the EU Treaty adequate control mechanisms and sanctions to ensure convergence in fiscal and budget policies. The Maastricht system, left unchanged by the Lisbon Treaty, says that convergence should be ensured by the rules that constrain government budget deficits (the so-called “procedure for excessive deficits”) and by coordination of national economic policies. But, as we have seen it’s possible to trick Eurostat into publishing faulty national statistics, and recent EU experience show how hard it is to impose sanctions on unruly members. The point is that the European Court of Justice has no sway over political controls agreed among member states. It was thought more virtuous states would impose discipline on spenders. In practice, national governments prefer to ignore lack of compliance with Maastricht rules. In 2003, Germany and France avoided the well-deserved sanctions for breaking their budget promises, due to the absence of political consensus in the European Council, the organ where national governments discuss policy-making. That circumstance had in fact led to a revision of the stability pact to make the procedure more flexible.

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Also, coordination of macroeconomic policies has been more nominal than real: states remain fully in control of their fiscal prerogatives, and the worst they can get is that EU policy recommendations to an erring government be made public (!). The economic and financial crisis has unveiled all the weaknesses in EU governance. To add insult to injury, rating agencies, which have been accomplices in triggering the worst post-war crisis, still manage to influence financial market operators with their judgments on the quality of the debts of various actors, including sovereign states. But also in this case the EU has only itself to blame: why was no independent, publicly owned, credible European rating authority created? The Author Claudio Dordi is Associate Professor of International Law at Bocconi, where he is a member of the Faculty Board for the PhD in International Law and Economics. He is also head of the Economics of International Law program at LIUC in Castellanza. He has worked as Visiting Professional Fellow at Georgetown Law School, Washington DC and as a member of the faculty at the World Trade Institute in Bern. He has also taught International Trade at the University of Brescia. Research Areas International law (international commerce and international monetary relationships). EU law. Public international law. Law of international organizations.


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Can I Upload or Not? by Oreste Pollicino

After the Google ruling issued by the Court of Milan, one must secure the consent of featured third parties before putting a video online. Questions of privacy and the applicability of EU law on a foreign-based company have been called into play in a sector that is hard to control.

The ruling of the Court of Milan, whose motivations have recently become known, which found three Google managers guilty of six months of imprisonment for the unlawful handling of private data, has been hotly debated. The facts are known: an autistic child is verbally and physically abused by some schoolmates who film the whole thing with a cell phone and then upload it on Google Video. The video stays online for two months and gets to the top ten of the most fun videos (sic), before being removed due to the intervention of the Italian Postal Police. But what are the implications of the Italian judicial decision? The first is possibly the least interesting. It just confirms in what kind of esteem the giant from Mountain View holds our institutions. The comment by CEO Eric Schmidt on the Financial Times speaks for itself: “The judge was flat wrong. So let’s pick at random three people and shoot them. It’s bullshit. It offends me and it offends the company.” He didn’t take it well, did he? But Schmidt and others are in error when they dismiss the whole thing as a blunder made by Mr Magi, the Milanese judge. In fact, an important effect of the decision is that from now on it will be much harder for Google to elude the obligations imposed by Italian and EU regulations by claiming the principle of “no server, no law”. According to this principle, the fact the Google’s servers are located in Silicon Valley shelters them from Italian laws for the protection of privacy. The judge found that the laws are applicable and that the Italian judge is competent whenever the handling of personal data takes place in Italy, such as with the diffusion of videos on Google Italy. But if Italian and European norms are applicable, then providers from now own will have to take their obligations seriously when it comes to dealing with sensitive date. But the judge did not list among these

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obligations the preventive control of all the uploaded materials, contraary to what some have claimed. Not only because this is technically impossible, but because it would go against Italian and EU law which exempts Internet providers from the duty of surveillance on user activity. What Google should have done and should do is to make clear to users who want to upload videos where third persons are featured, that they must first obtain their written authorization before doing so. In spite of the rhetorical tones which have portrayed the decision of the Court of Milan as an attack on the freedom of expression, at the root of the case there is the problem of rebalancing a whole business model. In other words, how approriate and cost-effective is it for Google to spend more to respect Italian and EU law on the protection of personal data? Two considerations now, one legal, the other economic - knowing full well I’m swimming against the tide. First, I don’t think the exemption of responsibility of ISPs extends to all Google services. How can you say that Google video (and now YouTube) with its sophisticated systems of indexing and filtering have no control on the data of the service provider? Second, it’s likely that the e-commerce directive adopted in 2001 and which states the principle of the exemption of responsibility had in mind those ISPs which supplied a connection to the web in exchange for a fee, and not those, like Google, who make their money not from the connection service, which is free, but from the advertising hosted on the platform. The Author Oreste Pollicino is Associate Professor in Comparative Public Law at Bocconi. He is a member of the steering committees for Diritti comparati, comparare i diritti fondamentali in Europa (http://www.diritticomparati.it) and the International Journal of Communications Law and Policy (http://www.ijclp.net) and is on the editorial board for Diritto Pubblico Comparato ed Europeo (http://www.dpce.it), Osservatorio sul rispetto dei diritti fondamentali in Europa della Fondazione “L. Basso” (http://www.europeanrights.org), and Panoctica, Revista Eletrônica Acadêmica de Direito (http://www.panoptica.org). Research Areas European constitutional law. Media law. Internet law.


Our view 2010

Education

Transcript of Our view 2010