The ItalianArab Chamber of Commerce

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The Italian-Arab Chamber of Commerce
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MARCELLO COLITTI

• Pre-requisites for technological modernization
  and production
• Khartoum 27 November 2005

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Technology as a concept

• Technology is a wide ranging concept.
  Technologies can be hard and soft suited
  to small and large plants and companies and to
  various levels of development of economic forces
  , and of human environment.

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Village technologies

• are the soft ones. They deal with water
  management , crop choices, solar energy , food
  transformation and storage, use of fertilizers
  and chemicals etc, and improve the productivity
  of a village. They must be implemented by the
  agriculturist themselves, who can adapt them to
  their specific environment.

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Hard technologies

• are those of modern industry, applicable
  wherever there are the requirements of
  industrial production raw materials , energy,
  infrastructure, educated labor force, etc. Some
  require heavy investment and are of interest of
  large companies others are suited for small
  scale enterprises.

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Small enterprises(1)

• Small enterprises are often the primers of
  economic development. The craftsmen working for
  the local market have the basic skills needed
  for manufacturing. The craftsmen shops can grow
  into small manufacturing entities, which ,
  given the right market conditions, can in due
  time become industrial establishments.

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Small enterprises (2) Technological change
Modern materials (plastic, fibres, rubber etc.)
convert easily into finished products.
Machine-tools for metals and plastics are small
and cheap, automatic, highly productive and
flexible. There is no need to assemble great rows
of machines in huge workrooms. In this
environment the small enterprise can produce at
lower cost than the bigger ones. Small
enterprises are very important , for example, in
the Italian economy, both in old sectors , like
textile and mechanics , and in new ones , like
plastic products.
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The Italian Example
Small enterprises are very relevant in the
Italian economy. The development of such
enterprises in mechanical engineering and woollen
garments, which took place in the mid sixties
in Northern Italy, can be used as an example
for a possible development path of an emerging
country.
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The new energy source
The development of industry in Northern Italy was
greatly encouraged by the discovery and
development of natural gas which, for the first
time in its modern history, gave Italy - a
country without coal- a cheap energy source. Gas
is a very good fuel for small consumers it is
clean, so that its flame can be put into contact
with the objects to be produced it is easy and
cheap to use, and does not need tank farms or
deposits. It was sold with a tariff based on
parity with alternative fuels, which left to the
consumers the advantages of its superior quality,
plus a discount, which produced a very
competitive price.
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Mechanical engineering
After the war, big factories could not be
converted to peace production and were shut
down, amid strong social unrest. A great number
of skilled workers went to work abroad. Few
years after, they came back and invested their
savings in small factories. They took advantage
from the State-launched programs for agricultural
mechanisation to create a new generation of
small, tailor-made agricultural machinery, which
had a great success on the market.
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Woollen garments
In the thirties, women of peasant or working
class supplemented the family income by working
a hand-operated knitting machine, which also
took care of family needs. When electric
machines increased productivity, some rural
communities became centres for finished woollen
garments. The existing wool garment industries
were quite happy to depend on their superior
flexibility, sensitivity to fashion, and cheaper
products.
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The consequence of it all
The new entrepreneurs were not helped by the
State, but got some help from the local
authorities of the cities. Moreover, the low
visibility of these enterprises reduced their
fiscal pressure. Networks of small enterprises
were created for mutual support in marketing and
finance. They absorbed part of the surplus
labour in agriculture and, in due time,
developed in a new economic environment of
diffused industrialisation, where the
advantages of new technology were exploited to
the full.
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The Italian example From this
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TO THIS
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Can the Italian experience be replicated?

• Each country has its specific human and cultural
  conditions, and the experience of one might not
  be replicable in others. However, the basic
  conditions of the development of small
  enterprise can often be found wherever there is
  a urban nucleus with a market supplied by
  craftsmen manufacturing and selling traditional
  goods.

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The traditional crafts

• Leather , metal and wood working are present
  almost everywhere , and so are food and textile
  basic productions. They are often connected with
  trading , and live on the local market ,
  surviving on the traditional system of exchange
  with agricultural or cattle raising activities.

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Technical education

• These activities could be encouraged, supplied
  with their basic requirements of energy sources,
  natural gas and electricity , and offered cheap
  loans to obtain modern machinery . The first
  pre-requisite is however, technical education,
  especially for the young sons and daughters of
  traditional craftsmen, who must become the
  actors of modernization.

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A state-run program

• A state run program for developing of small
  enterprises could be launched with the
  following elements
• technical education
• soft loans for machinery and shop modernization
• affordable prices for energy and low fiscal
  pressure
• inducements like trade fairs , prizes for best
  products, and the like.

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Running such a program

• Experience shows that such programs have better
  effects if the are run locally , rather than
  from the Capital. The authorities of the
  cities have better knowledge of their own human
  and material conditions, are nearer to their
  requirements, and tend to be less bureaucratic.

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International cooperation

• Such a program could easily be supported by donor
  countries, with capital and teaching abilities.
  It could very well flank bigger and more
  ambitious development plans , giving probably
  quicker and more effective positive results.

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Facilities offered by Italy

• SIMEST, an Italian State-owned company , strictly
  cooperates with the Italian Arab Chamber of
  Commerce to support the acquisition by Italian
  privates of equity in foreign companies
  especially in small and medium enterprises

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THE END