Analysis: IT Strengths and Weaknesses

Weaknesses
Italian bureaucracy is notorious for its abundance and inefficiencies. Perhaps as a result of the ever-changing coalition governments, there are many laws that are extremely complicated and sometimes conflicting. Although, in recent years the government has made some real efforts to improve the laws, things only seem to change on the surface. For all their good intentions, in practice the laws are rarely enforced and the changes are negligible. For instance several years ago a law on digital signatures was passed. Unfortunately, it seems that no one knows how the public key algorithms will be implemented in the hardware and software equipment to certify signatures in public service or government controlled procedures. In the EU, Italy often sits on committees to spearhead change and to improve the state of the EU for economic development in the information economy. On the national side, the Italian government is formed of coalitions between many parties. These coalitions often fall apart and are reborn with a new head every couple of months. Although this does provide some political instability it is important to keep in mind that even though the numbers within the coalitions change the government mix of parties who are in control stays fairly constant. Italian expenditure in IT hardware, services and software is one of the lowest in Europe, although expenditure in telecommunications they are on par with Germany and Finland. (Source: ADB Database & IBC Data, March 1999)

Investment Potential
Italy is barely out of the starting gate when it comes to e-commerce. They may never catch up to their English neighbors who have the language and geographic advantages of being the bridge from the US to Europe. There are other ways for Italy to leverage its strengths and work with its weaknesses. It seems it would be advantageous for a company to invest in software development in Italy. Currently, Italy doesn't have an internal software development market although both Oracle and Microsoft have recently established presences in Milan. The government and local private industries are starting to invest in research and manufacturing facilities but there efforts need to be improved. Basically, Italy has a trade deficit because they import so much in the form of IT products and services therefore it would behoove them to keep the money in the country. On this note, while there is potential for foreign it is important for the Italian government to make a percentage be reinvested back into the Italian economy.

Will they ever catch up?
The answer to the question is it depends. If the Internet can be marketed in a way to attract their collectivistic affinities, it is likely that they will. (Just look at the cell phone penetration.) Also, when the Internet moves to wireless connections Italy is poised to make the leap to be at the forefront of this new technology.

Italy's Internet usage lags behind the rest of Europe and the US for several reasons. One, there is low PC penetration which at least in the south results from poor economic conditions, and high unemployment. The cost of a PC is often prohibitive and people of this collectivistic society don't see its benefits. Also, Italian's command of the English language is often limited and until more Italian content is put on the web people are not going to want to try to fumble through a search in English. Although, culture is something that is slow to change it seems reasonable to imagine the possibility that they will learn to conceptualize the Internet as a tool to get in contact with others, not to isolate them.