Last call for the future
The fourth digital revolution, based on Big Data and Artificial Intelligence, is accelerating exponentially, driven by technologies and innovations that mostly come from China and the US. For now, the EU is trudging in the rear, held back by prudence, bureaucracy and slowness, to the point it now seems condemned to the role of spectator. Not all, however, is lost. The Old Continent still has the chance to recover the lost ground. Carlo Purassanta, formerly an IBM executive, then CEO of Microsoft Italy and Microsoft France, and today Executive Vice President of ION, explains how to do it in his book Lo slancio decisivo (A Crucial Impetus), published by Egea. He argues that in next decade will be decisive to re-orient Europe's industrial destiny towards the new frontiers of technological development. Because the future is going to materialize, whether the EU takes part in it or not, but the values of our Continent could certainly make it more inclusive and sustainable.
The premise for Europe's restart is carved in the prologue of your volume: "We must make peace with technology". Did you often have this perception of ostracism towards technology during your mandates as CEO in Europe?
Yes, very obviously. But not only in Italy, also in France and Southern Europe in general. Behind this attitude, I believe, there is frustration with the fact that digital technology is not developed by us and for this reason there is a prudent tendency to delay its adoption to first verify its 360-degree impact. This approach is not wrong as such, but takes way too much time and we are off of the right pace on innovation. We have already seen how radical industrial revolutions, such as the digital tech shift, operate: a century ago, around electricity, not only production was reorganized but all of industry, geography, urban planning, and finally society. Data today is a factor of this caliber, and in a hyperscale world, whoever starts building value on data first acquires a competitive advantage that is then difficult to bridge.
Yet you outline for Europe a short horizon to fill this gap: ten years, perhaps five.
It took IBM 50 years to become hegemonic in its industry; Microsoft and Apple, born in the 1970s, did it in thirty, Google or Amazon in fifteen, TikTok did it in three. Today, by making the right choices, it only takes a couple of years to become an industry leader. Europe has the skills, best practices and can draw on a technology that is already "ready to use", so the goal is attainable, it is not utopian endeavor.
However, Europe has different industrial traditions, more linked to vertical skills and less to services. Where to start from?
For me the frontier of innovation is in manufacturing industries and the great opportunity for Europe is to be found right here. We have to infuse the new business models with our values, reinterpreting the "vertical" excellence that we have consolidated over a century to ensure it remains such also in a digital world. Over the next ten years, the giants who have developed horizontal technology will want to become hegemonic in various sectors. Do we want to wait for Amazon to teach us how to build a bank, Apple how to build a health care system, or Google on how to build autonomous vehicles?
How much of this redemption is possible without going through the creation of a major company exerting global hegemony? Successful firms of this caliber are lacking in Europe
This is our weak point. There are no hegemonic companies in Europe, while both the US and China have at least 5 or 6 in various industries. Americans and Chinese have models of value construction that favor the creation of corporate behemoths, on the contrary we in Europe have a culture and an industrial policy that prevent us from growing beyond a certain scale, in addition to the fact that there are 27 countries and that, whatever innovation is proposed, one must conquer every single country's heart, one at a time. And yet, we have know-how in many sectors, big players in every industry, we have culture, educated youth, university and research; if there were agreement on the objectives on which to focus investments, we could create a positive asymmetry similar to what happened in the past, in Israel or Silicon Valley, to provide two examples.
How should EU policy change in this regard?
First of all, reaction times should change. You can't find out now, for example, that Facebook has too much influence over people's opinions. The problem of social responsibility has been known for years, yet still today Telecom and the like must have a regular license to act in telecommunications while no one knows why Twitter of Facebook do not need one, with associated rules and responsibilities, to operate as a social network. But, in addition to fast decision-making, I believe that the way of conceiving relationships between companies and institutions must change. In 2013, when I returned to Italy as CEO of Microsoft, I naively thought that the Italian government would immediately call me to establish a dialogue. But nothing happened. There were meetings related to technical aspects, but never a high-level discussion on development models or mutual needs there should be an understanding of. As if the companies are too biased to participate in the debate about policymaking. In my opinion, however, it would be the responsibility of a government to convene technology companies, as well as other strategic industries from energy to health, and turn those working groups into permanent task forces that elaborate a common strategy suggesting what should be done and how to do it in every country or at the EU level.
You dedicate a long letter to young people on these issues. Your book, however, speaks above all to the generation that holds the levers of power today
Today's ruling class can either make major mistakes or lead us towards the solution. The best way to make the right decisions is to open up to dialog, not to shut it down. The pyramidal model that has dominated companies for 50 years is now outdated and continuing to think of companies this way is like wanting to drive a car while looking in the rearview mirror. On the contrary, flat organizations must be favored, aware that everyone has knowledge, not only those at the top but those who are around them, and those that are involved with the key activities of the organization, thus at the heart of the value chain. We need to draw from everyone, and above all from young people who are the consumers of the future.
In a chapter on the frontiers of ethics you write that "for digital players, the discussion soon won't be about what are the activities they do to comply with existing rules, but rather what are the businesses they should decide not to enter". How did you behave in this respect at Microsoft or IBM and what perspectives do you see on this issue in the long term?
In both the companies I led, the sense of ethics was profound, the rules were particularly strict and for this reason certain businesses were rejected. The question I ask, however, is another: is it normal for these issues to be the responsibility of companies? This scares me a little. For this reason, in the book I propose a solution similar to the one identified by the French government with the Sapin II Law, which oversees the governance of anti-corruption processes in companies: a highly competent team is created, which carries out audits in companies, assessing their maturity on certain parameters and indicating the aspects to be corrected and those to be sanctioned. While carrying out this activity, however, the same team interrogates companies to learn in what direction they are moving, so that in the next audit the verification parameters are increased and updated. Therefore, positive models are crystallized, becoming a shared asset and a benchmark that pushes the entire industrial system to move in that direction. The same thing should happen to AI at the European level. Public powers shouldn't tell companies exactly what to do or how to do it, but how they should position themselves in a virtuous circle of continuous improvement.
This should also help remember that the real goal of the digital revolution, and more generally of technology, is to improve the quality of life and not just the economic system
This is why I argue that Europe does indeed have a chance to be a world leader. Because from the point of view of philosophical values, its contribution is so important, that Europe deserves to become a vehicle for knowledge for the creation of new business standards for the future, in order to make them more equitable, inclusive and sustainable.
What role do you see yourself in in the next decade?
After two American multinationals, I wanted to dedicate myself to a European company, and I chose ION Group, that helps companies use data and algorithms to change the way they make decisions and transform their operating models. In the meantime, I am always happy to share ideas and perspectives about innovation with other companies and with governments, all those who are willing to understand how these digital models work. It is the theme that I know best and that I am most passionate about.
Would you accept if they offered you the post of commissioner to guide the Italian or European digital transformation?
Now is not the time. But in the next decades who knows!