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the Italian industrialization crisis case isn't that hard to crack: there are many factors leading to it, for sure, but the central choke point was the subdivis

the Italian industrialization crisis case isn't that hard to crack: there are many factors leading to it, for sure, but the central choke point was the subdivision(=lottizzazione? I don't think subdivision really renders the term) of banks for local political interests. the push from local industries to large conglomerates to global multinationals was sustained by a strong economy and easy access to large banking institution that could finance their operations at reasonable risk for themselves. the small local banks in Italy could never sustain such a growth, and production remained local, with few notable exception. sure politicking, corruption and mafia had a part in it, as they will reduce competitiveness of a company compared to others having none of such issues (i.e. the state deciding where to build factories based on unemployment and not efficiency) but a large enough company can absorb that in the bottom line and continue operating. Medium companies are, however, completely suffocated from this. the Italian startup stagnation is more confounding, but my personal belief is that it's likely a result of the absurd taxation the middle class gets. It's basically impossible to build up any saving to start entrepreneurship around here, as everything in welfare comes from the middle class. And existing entrepreneurs have little incentive in branching off to new unexplored areas. Without the fuel and ferment from solo founders making it, there's no culture and no substrate to fall into if a business fails. Everyone is just grabbing at their own chair, hoping not to be knocked into poverty by the next round of financial crises.

eecc 6y ago
I’ll also add the pitiful condition of the judiciary. “Well then, sue me” is as middle-finger as it gets when quarreling with underhanded competitors or non compliant parties. Getting justice - whatever that is, in Italy laws constantly change to favor whatever is the current favorite in power - is an such an excruciatingly long process that most will just give up and take the loss.
ChuckMcM 6y ago
Thank you for this. It does sound like some systemic issues are at work here. That said, this "my personal belief is that it's likely a result of the absurd taxation the middle class gets. It's basically impossible to build up any saving to start entrepreneurship around here" reminded me that many of the people who start new companies in the Bay Area have often accumulated a bit of wealth from the equity sale of the previous company they worked for. For example, estimates vary on how many millionaires Facebook created when it went public and its stock value grew, on the low side it is a one to two thousand. Of those, over 200 according to Crunchbase have founded or co-founded new companies on their own. I'm more familiar with Sun Micro since I joined the day after they went public and was in the first 2000 employees. Of the 1999 that came before me, over half started new companies. At least 8 that I know of became general partners in VC firms that went on to fund hundreds a companies. There are also outliers like Eric Schmidt who got both the Sun boost, the Novell boost, and then the Google boost after that. The point being that spreading out the success of a company widely is likely a big component as well.

eecc 6y ago

I’ll also add the pitiful condition of the judiciary. “Well then, sue me” is as middle-finger as it gets when quarreling with underhanded competitors or non compliant parties. Getting justice - whatever that is, in Italy laws constantly change to favor whatever is the current favorite in power - is an such an excruciatingly long process that most will just give up and take the loss.

ChuckMcM 6y ago

Thank you for this. It does sound like some systemic issues are at work here. That said, this "my personal belief is that it's likely a result of the absurd taxation the middle class gets. It's basically impossible to build up any saving to start entrepreneurship around here" reminded me that many of the people who start new companies in the Bay Area have often accumulated a bit of wealth from the equity sale of the previous company they worked for. For example, estimates vary on how many millionaires Facebook created when it went public and its stock value grew, on the low side it is a one to two thousand. Of those, over 200 according to Crunchbase have founded or co-founded new companies on their own. I'm more familiar with Sun Micro since I joined the day after they went public and was in the first 2000 employees. Of the 1999 that came before me, over half started new companies. At least 8 that I know of became general partners in VC firms that went on to fund hundreds a companies. There are also outliers like Eric Schmidt who got both the Sun boost, the Novell boost, and then the Google boost after that. The point being that spreading out the success of a company widely is likely a big component as well.