when i say it i'm going to say it up good evening ladies and gentlemen i think that there's no need to introduce michael spence he is very well known he already visited the festival in the past this is so because the scientific work he made uh is indeed consistent with the subjects of the previous festivals we spoke about information uh that's why he was invited in indeed he received the nobel prize for his theory on informational symmetry he was also invited to talk about growth which is a subject of interest for him he was also invited when we talked about borders and national sovereignty he was very much active in the coordination of international policies for development and emerging countries so indeed he had a lot to talk about we are indeed very glad to have him here again and as usual we would like to talk some of the subjects which emerged during the festival to have his opinion and also an assessment so if you allow me i'd like to move to english because it's easier to talk to him in english michael you could not unfortunately stay with us all the time so let me try and summarize some of the of the of the topics were discussed you know first of all it was a not an easy say edition of a festival because this time we had to really talk a lot about futurology you know it's in past edition we were looking at data we could draw lessons from history and uh we had more empirical say guidance when you talk about the future it's not easy to do so so clearly we had different opinions uh more than perhaps in previous edition of the festival in particular on the one hand there was a concern that we have this technological change which is going fast and may displace many workers in particular you know we started with richard freeman uh suggesting that there may be some very serious distributional consequences of this of this of this technological change but parallel to this there were also many discussions that were also related to the italian fierce and italian dimension of a problem and people here were concerned instead about the fact that italy is in a kind of economic decline in a situation of slow growth that has been going on for a certain amount of years so my first question is uh so there are these two concerns that are somewhat running parallel one to the other on the one end where are people concerned because we are experiencing too fast technological change and this technological chain may destroy a lot of jobs on the other hand we have people concerned because italy and perhaps also other countries are bound to experience low growth cycle stagnation and and this type of events are these two fears compatible i mean are they talking about something that may happen simultaneously progress too fast technological progress and low growth or are somewhat orthogonal one to the other and something that is in contradiction i don't think they're entirely incompatible so i think the developed economies of the world do face a situation in which technology notwithstanding you know the difficulty of predicting the future um face very rapid changes in structure and in the nature of work some of it will displace jobs some of it will you know turn into what you call digital assistance you know that maybe make people more powerful and be able to do more work than they did as individuals you mean i'm thinking of doctors lawyers and other things that are going to have digital assistance that are powered by artificial intelligence that can do things that humans can't do at least faster so i think all of those things are real and and the way an economist would describe it is that it's a transition the demand side of the labor market moves in response to these forces as it sometimes does with globalization way faster than the supply side can respond and that makes it difficult it slows growth right because you don't get the growth effect until the the system shifts and takes advantage of the technology and it creates lots of anxiety and challenges for for individuals so i think that part's real uh i'm one side comment i'm sure you heard interesting things about the way the world will be 35 or 40 years from now when all of this has come to pass and not always mutually consistent no not not all the predictions are entirely the same i'm okay with that because i i don't i'm not against entertainment but i do think that the best way to think about practically about what we're dealing with is to think about it as a transition you know it's very very hard to know you know where this will end up uh and and so i find at a certain point myself sort of dropping out of the debate of what you know whether ai eventually will require a complete transformation without rejecting the hypothesis that it will require complete transformation in the way they or we organize economies but that's not our immediate challenge our immediate challenge is to try to get people to kind of come through this system um the reason i don't think this is inconsistent with the challenges related to productivity and growth is uh it's twofold the the productivity and growth challenge is only partly related to technology and to the extent technology is an enabler of future growth we have lots of historical examples of overestimating how fast it will kick in you know you have probably been told in the course of the last three days that bob solo and steve roach said we had computers for three decades and no sign of a productivity effect before it kicked in in the 1990s and so on so so i i think you know there's a lot of discussion about this uh in the profession a lot of sensible things have been said i think the best guess is that um that we're going to see this kick in but not as fast as we thought but but i do may i add one other thing please i don't think i asked myself the following question recently where is society putting its resort creative resources right and funding for it and so on well i looked at the united states so we are by far our biggest federal budget uh for research is in biomedical science in the national institutes of health it's about 37 billion dollars a year and it employs a very large number of the really talented scientists in the and doctors and and in the country is this targeted in productivity improvement or is it targeted at health and quality of life i'll let you answer the question right we have an enormous amount of talent built into building the social media structures that we now talk about both the positives and negatives is that targeted at productivity or not so the message i want to leave you with is not to answer these questions but but just keep in the back of your mind societies don't have one objective and which is you know income or wealth and they don't allocate their resources in pursuit of one objective and my view anyway is that the advanced countries have on balance sufficiently high incomes that we've been allocating a substantial amount of our most valuable resources namely people creative people who innovate to pursuit of things that are really important to people that may or may not tangentially show up in terms of productivity improvement and that's not a bad thing so i think we ought to sort of relax a little bit now last comment and then i'll turn it back over to you growth does matter in a couple of respects in italy the nominal growth is not high enough yet to drive down the leverage ratios and so nominal growth really matters because by far the best way to drive down excess leverage conditions is through nominal growth as opposed to you know other things and nominal growth as you know is real growth plus inflation so if you have very low real growth and modest very modest below target inflation you're going to have a long period of trying to get back into balance whether it's fiscally or in the corporate sector or other places so so growth matters in that respect and and it matters in one more area that at least occurs to me i'll just share it with you quickly if you have a distributional problem in a society it's a lot easier to solve it if you're growing because you can leave the people who are privileged in the position they were in before and allocate the increment to the people who were left behind in a very low or no growth environment that's a zero-sum game and politically and in other ways it's extremely difficult relatively speaking to do redistribution in that context so for both reasons i think we shouldn't lose sight of the of the growth challenge so if if he asked me i'll talk to you about developing countries but that we will get we'll get there but what you said is to some extent quite reassuring uh to the extent that you are telling us and i think many of our speakers this edition of a festival told us the story of this type that basically you know this is jfk by the way this is what i think jonathan gerald kennedy first said something like that the very same person who started this technological progress will be able in case this derails and going direction that you don't want to be pro shoot to change the direction of the technological change and make it more friendly for humans uh so and on the other end what you said is that we really have to be concerned about growth because growth will allow also the type of redistribution that is needed to avoid that some of the undesirable consequences of technological progress may uh kick in and you know to some extent create losers uh if we don't grow we won't be able to support the type of policy that could compensate the losers from the technological change but in this respect so then let me ask you something else because you have been i'm going to let you talk because that was better than what i said you have been working a lot on global convergence and divergence there was a the lecture by richard baldwin was quite intriguing because what he said is that we were through various ways of technological progress the first wave was one where trade costs were reduced and basically this led to a divergence international divergence of incomes so country becoming very poor and our country becoming relatively rich the second phase one of the communication reduction in communication cost was instead associated to a convergence across countries so indeed yesterday branco milanovic was showing to us this very interesting data he collected on the worldwide income distribution and some perhaps one of the most important lessons we learned from this lecture is that in the last 20 years we went through a process in which between countries inequality have been narrowing down so the world is less than equal today than it was looking before but within countries so within industrialized countries in particular inequalities have increased so if you look at the level of a single country we see a lot of inequality if you look at the level of inequalities between europe and say china or india inequality has been narrowing down so again here is as i said this is we are talking about meteorology so it's what is your expectation about the next wave of technological progress we did lead you wrote a book on on on convergence and divergence so we would lead to more convergence between country and perhaps more divergence within country or something else well it's a terribly important question especially if you care about the 80 percent of the world's population that lives in a developing country broadly defined meaning not a high income country on balance tito i would say i expect the convergence process to continue because it's driven by the success of very big important economies dragging a whole lot of other economies with them so china as long as it continues to grow at six and a half percent for the next little while india growing at somewhere around seven percent there'll be hiccups along the way but i mean you know that's let's call it 2.5 billion people you know of the in in the world and you know and they're basically heading toward being at the low end of the high income country so i think that that part is is pretty secure it's harder to know on the within country part you know what is going to happen and it kind of comes in category so i think for most of the people in the room the developed countries are of the greatest interest meaning the high-income countries europe north america uh japan a couple of the smaller countries in asia and of course australia new zealand i think the best guess is that at at the very best the rising pattern of inequality has uh leveled off and that's an optimistic guess so i think that the best guess probably the most likely outcome is we'll see a continued rising trend in inequality and my basis for saying that is that most of the developed countries have not successfully found a way to deal effectively uh with this challenge there are exceptions i think the nordic countries in the north of europe are the best examples of having found formulae that work and and and no don't impair growth productivity competitiveness and so on um but that's not the kind of majority group and and i hope i'm wrong all right but uh but i think it's going to take uh some more pushing and shoving politically and it's going to going to occur in a in an environment which you have discussed extensively including you know about an hour and a half ago of um highly what i call centrifugal political and social forces that is people going in all directions which is usually a sign of some kind of confusion is the way i see it there is one other thing that directly relates to technology that you may or may not have thought about which is by far the most successful growth model in the developing world is is usually called the asian growth model and that is based on connecting to the global economy both in terms of trade and investment and information and technology and leveraging that to enter the global economy in labor-intensive process-oriented manufacturing as your first stage the digital technologies are within an ace within an ace of nullifying that model basically because the digital technologies with robots that can see and find motor coordination and other things are either close or at the point that they can displace in terms of cost economically displace the labor-intensive processes and so there's a set of countries they're not the majority but there's a lot of people who live there who are still in the low-income category who are going to find themselves with the challenge of inventing new growth and employment engines that drive that kind of growth you know if we had you know the rest of the afternoon and some of the evening i think there's some real opportunities in creating digitally enabled echo you know ecosystems around platforms that may if not completely subpartly solve that problem but it is a big challenge so so to answer tito's question i think convergence will continue between advanced and middle-income countries like china india indonesia etc there's another set of countries that are in the the category of per capita income say below 1200 dollars that could get left behind and that would be a major break from the pattern of convergence that we've seen in the post-war indeed you asked me to to let you talk about developing countries that was coming next because i should resist the temptation to ask you more about the weaving country redistribution in industrialized countries so there is a concern about the developing countries being left behind this so the convergence will involve india china but perhaps not redeveloping the countries and this idea that the new wave of technological progress will allow for um you know the reduction of distance in organizational work so these offices that are organized worldwide and this is something that is not for the developing countries perhaps you need to have some level of development in order to benefit from this technological advance yeah but maybe i mean so the digital technologies have not failed the inclusiveness test in a big way i mean there was it wasn't more than 10 years ago then people were talking about the fact there'd be a whole great swath of humanity that had no connection to the internet that's almost gone right and and the answer has been the convergence of the internet and the cell phone so you have mobile internet technology con connectivity and i i you probably talked a lot about it here but a huge batch of stuff like mobile payment systems uh of the type you see in china you know financial services built around those platforms where people can get credit who are previously anonymous credit scoring systems that that you know evaluate people who are otherwise completely unknown to the traditional banking system in a particularly effective way now these things require regulation so they're not just kind of wonderful flowers that popped up and you don't have to do anything but but that the potential is is enormous uh i think what what richard was talking about is is very important there's going to be a major major reconfiguration of global supply chains um and so can i take a minute and describe that i mean i hope it's not inconsistent because richard's really smart instead of he studies these things so i think manufacturing on balance is going to do one of two things manufacturing meaning goods okay because of the digital technologies uh a bunch of that stuff is going to relocalize why because if you're not constrained to move the activity near the scarce resource that's immobile called labor then you'll move toward the market right and unless there's enormous scale economies basically you'll do it wherever it's convenient right and so i think a subset of manufacturing is going to move toward the market and global trade as a fraction of the total with other influences thrown in is going to decline in trading goods the other the other powerful force that produces concentration is it has nothing to do with going after limited resources it has to do with the collaboration effects you know some of you are old enough to have read a book by michael porter called the competitive advantage of nations in it he and his colleagues discovered that in industry after industry in sector after sector the major impressive competitive players are in a small number of locations near each other right and that's because those are the places where innovation occurs and competitiveness gets built and so the other force that i think you're going to see that mitigates the reduce the reduction in trade point that i just made is you're going to see not in one place not in one country but in a small number not scattered around the world major centers of inter innovation in sector by sector and so on uh on the services side labor's still relatively immobile and services can trade you know remotely so i don't see the pattern that we've seen in the last few years on the server side changing companies will go and find valuable human resources wherever they are and integrate them into the kind of service component of global supply chains and that that seems to be not only healthy but a fairly big a fairly big growth opportunity so these are big changes and they're not going to happen overnight the counter to this is that there are i'm just going to say this and then you can decide whether you want to pursue it there are major assaults right if you think of globalization as the flow of goods and services capital uh people and information technology and knowledge those four there are major assaults being conducted on all four right now uh and so there's a question mark that i think is very hard to answer which if you assault meaning disrupt enough of those flows then you will disrupt global supply chains in a major way and much of what i just said might have to have to be modified and i i don't know it's not looking very good now thanks to the behavior of the country i'm a citizen in but but we'll see so what you said about agglomeration economies is very important indeed we had i think it was two years ago the addition of the festival was indeed on economic geography so we talked a lot about that but what you're saying about developing countries being left behind is also telling us that we cannot think that the technology will solve the problem of international migration by itself so we are going still to have this problem as something to deal with in the years to come so also related to this let me now ask you something about the the type of redistribution of inequalities that we are living in in our countries in our societies and here clearly is a question that is inspired by the european uh discussion and also the discussion we had just before this event what is in your view the appropriate level at which redistribution should be organized and take place in europe is it more a matter of uh weaving countries or social policies being organized in each individual country or is it more something that should take place at the supernational level i know this is a european century question because uh in in the us and uh elsewhere you don't have this but for us is extremely important and something highly debated so your view would be very inspiring in this respect i doubt it but um so i guess in this respect i'm kind of a pragmatist i i know there are programs uh cohesion structural uh programs you know convergence related programs that were built into the european union structure and i don't dismiss those i think they were they have been important on various parts of the european union that were behind i'm thinking parts of spain for example benefited enormously from that so i don't think you want to rule out redistribution but redistribution uh in various forms on the scale that's required to counter these trends that we you've been talking about here for three day three or four days i think as a practical matter is going to have to be occur at the national level i i just i don't see uh that you're going to be able to deal with it um i can think of sort of partial qualifications but if i imag imagine you know the higher income countries in the european union at being asked to participate in some democratic process in bringing everybody up to the same level i i just don't think that's a vote that would get a winning level of support so so i for whatever it's worth i think there's it's it's essentially a national challenge primarily a national champion so still a lot of work to do in redesigning our social national social welfare system at the same time perhaps there is another type of redistribution or i would say regulation that takes into account these inequalities that is important and this has to do uh with the way the organization work is changing so we have all of these jobs that are created via crowd economy crowd jobs which are completely unregulated also there is this mobility across countries so this type of phenomena perhaps cannot really be handled within each individual country in particular small countries relatively small country in the world as the individual country in europe's art so what do you think well no that's absolutely right i mean you have to realize that you're talking to one of the leading labor economists in the world about labor markets is a little daunting um but i'll i'll do my best i think in the area of digital technology there's a there are it's been a unregulated kind of flowering of opportunities in the in the sharing economy and crowdsourcing and other things and it's become clear that parts of this have to be regulated both because you just need regulation and second because you know it's unfair vis-a-vis some traditional sectors that you can you all have examples in your head you know if if uber can run what amounts to taxi services without the taxis regulations you can sort of understand why the taxi drivers are a little upset or the limo drivers and so on so i think that's coming this creates challenges that you know would take a whole you know a whole lot of time so the regulation that's coming in the internet is not going to be uniform across countries and it's not going to be international for except maybe in europe where you have at least uh the supernatural national regulation of data privacy and security which is a major major change in the world um but when i look across countries uh you know and ask how are we going to regulate the internet you know the two mega players in in big data and platforms or china in the united states what are the chances that china's and you know an american approach to regulating the internet are going to be the same zero less than zero i mean you know in china for example the government has asserted it's the right to see the data um and to filter internet content in pursuit of what they view as public interest you know social political stability whatever they want to call it in the western countries in democracies but for the most part we don't have anybody who has the legitimate authority to filter content on the internet except in extreme cases you know like child pornography or something like that so we were inevitably going to end up with a balkanized a balkanized system that doesn't mean that some attempt at international cooperation so that we don't disrupt you know the the parts of the global economy that are enabled increasingly enabled digitally tito isn't worthwhile but it's a really daunting problem and because basically because you have economic considerations you have social and political considerations you have child development considerations you know and um i don't know how many of you thought carefully about this but but the national security people in multiple countries have weighed in and essentially said defense and national security are critically dependent on not falling behind in digital technology so you have that whatever that agenda is overlapping this whole thing and i think it's created a set of problems that have barely barely been started to be addressed um the one other thing i would say in response to your the start of your question tito is when i in europe go to conferences where we're discussing this equality question 95 percent of the discussion is about social security systems and the redistributional characteristics and i'd be the last person to say that's unimportant but the other you know side of this is growth right is it creating opportunity is dynamism you know is one of the young people who have a lot of creativity going to go are they going to stay in the country do they have access to venture capital you know are there supportive ecosystems and so on and i think that this is getting way way too little attention right now uh inclu including here in italy uh and so i just i just wanna suggest that the tackling successfully the distributional issues requires attention to both sides of that um you know there's an article maybe it was referenced in the course of this in the new york times about two months ago that said uh the robots are coming and sweden is fine did somebody talk about this when you were there well the idea is pretty simple tito and i talked about it just before so sweden's a small open economy it it's completely dependent on being competitive on the tradable side otherwise it'll fail and digital technology is critical to that so somehow not deploying digital technologies in mining and manufacturing and so on as a simply non-option so the rest of that system is configured to try to deploy the digital technology to be competitive and to drive growth and productivity at the same time as looking after people retraining people and so on and the the message i think that comes from that little case study is an important one which is you can't solve this problem without both the protective mechanisms and the things that drive growth and you have to have the major stakeholders business government labor all participating and doing complementary things if you try with one of them it won't work it just won't work government can do the social security systems even if they're expensive but it's not best position to do the retraining systems and labor has to go along with the flexibility issues but they won't do it if they don't trust the other parties in the system and so somewhere deep inside of the solution to this is a is multi-stakeholder contributions built on a kind of foundation of trust without which i i don't i haven't seen a successful example of solving the problem without that what you said extremely important and said by an economist even more convincing because this trust is something that is not usually something specifically economists do talk about you mentioned italy and i know that when you mention italy you know with a deep knowledge of our country because you which is we are lucky enough to have you for part of your uh year uh in italy uh and before when you had some interviews uh you said that italy is a is it an inflection point so we had a lot of discussion about the italian situation clearly during this festival because we are just in the middle of this cabinet crisis and government being created dismantled and then newly created so we had a lot of discussion about italy so perhaps you want to tell us something about our country and this uh difficult future for young people or that would be for us very inspiring okay well so um i i did use the word inflection point i i think that uh you haven't if depending on how you count trump you have in italy now the first clearly democratically elected anti-establishment government right and we don't know what they're going to do so there's lots of macro economic problems and challenges that where their actions could upset the apple cart or provoke a confrontation with europe and so on much of which was discussed in that previous panel and that i don't have anything to add to that those those would be if they if we went down that path simple mistakes on the other hand um these people were elected you know based on real legitimate concerns of italian citizens uh you know distributional things employment you know immigration fairness vis-a-vis the dealing with immigration in europe and so on so there's an important agenda that properly pursued you know i think is a good thing and many people by the way in america said that whatever they think of president trump and his you know character idiosyncratic characteristics going along with a significant set of the population thinking that the elites the ruling elites in business academia government and so on really couldn't care less about the deterioration in their lives and so on wasn't you know wasn't a an attractive or stable trajectory to stay on anyway and so at least we got you know somebody elected who said enough we were not doing that now we you know it's obvious that once you get to that point you can things can go well or badly the other thing i said but i you know i'm kind of cautiously optimistic there's a lot of of talent here that my characterization and remember i'm an outsider i will never know as much as italians know about their own country about its politics its economics how it really works but i think there's an enormous set of intangible assets here in people in creative talent and so on and the challenge it at least on the growth side and employment side is to sort of remove the obstacles uh is essentially to untie it and let it run and you have lots of it already i mean i wrote something for altagama which is the association of of luxury brands basically um at the request of andrea ely who's the current president of altagama and i said you know they're just in he agrees with this because he wrote something longer and quite comprehensive that there's just enormous potential but it it's not fully realized so the young people i think are having more trouble than than they should in starting companies i think the what i think of as the entrepreneurial ecosystems that i've gotten used to running into in a variety of places around the world are somewhat underdeveloped here and that's not a fatal flaw it's just something that can be dealt with and if that's the road we go down then i think you could have uh even a year from now a really much prettier picture both in terms of macroeconomic outcomes but also in terms of optimism about the future so that's i mean i don't mean to be wishy-washy but i mean i think there's a real chance that that could happen it one of the things i learned in china is these digitally enabled eco i mean i've spent a fair amount of my life in silicon valley it's a well-known ecosystem that works pretty effectively in the area of technology it's it's basically a bunch of institutions and people interacting and a bunch of complementary things that are supplied we call them infrastructure but they're not bridges and stuff they're things like that what the venture capitalists do or if you design a you know a new um uh semiconductor chip you don't have to know how to make it because somebody will make it for you i mean that kind of stuff it's all very specific to the technologies that are being developed um and it when i went there you know as quite a young person this is a long time ago and some of this infrastructure didn't exist you know you can build it um over time and now it's quite it's it's quite strikingly there what's new is the capacity to build a digitally enabled infrastructure so if you go to china and look at the mega platforms you know the 10 cents and the alibaba's and the alipays and so on what what you what you'll see when you first look is what you was what you're looking for which is e-commerce when you start talking to the people what you see is an entire ecosystem built around this platform you know where a young entrepreneur can you know become a designer and enter a business that was simply impossible before or a small and medium-sized business can get to a global market you know or somebody with a nifty idea in the area of finance can hook up with alipay and do it or somebody who can do fast manufacturing you know gets hooked up with an entrepreneur that's doing uh that needs that kind of capability logistics companies being created all over the place it's an idea that hasn't kind of filtered out but i think if you if we think in those terms you know building the ecosystems and especially focusing on the digital enablement of them which just turbo charges them they're not different uh they just you know lower the entry barriers and make it more powerful there's real potential there there is a major challenge in europe right now and i don't know if you've talked about it in the last three days all the mega platforms are in the united states or china and the vega platforms are the place where the data is and i'm sure you've talked about our artificial intelligence so you know the theory can be done anywhere including right here in trento uh but the application requires huge amounts of computing power and massive amounts of data and that's what the mega platforms have they've got the cloud computing systems which are enormously powerful and they've got massive amounts of data and then they use it in the kind of machine learning mode to deliver better and better and better match services and then they can include accumulate more of the data yes there are big monopoly power problems and associated with that that that will have to be dealt with but um if i left you with one message on on this side of it tito it would be we really need a public-private partnership that uh over time creates that kind of capability in europe we need a mega platform or or access to data that creates the same kind of opportunity set now that's a very important message indeed we had discussion about the china investing a lot in this area us as well and europe lagging behind but let me go back to the italian what you were saying about italy and so clearly we can unfold this potential that you see in our country as long as youngsters stay in our country and don't leave and here there was a contradiction in the previous panel that was brought into which i i thought is an intriguing issue so we had a party the five-star movement winning a lot of votes among young people basically that was the electoral base of this party and as soon as they get to power they seem to be so much concerned about increasing pension expenditure which is clearly operating the other type of redistribution from the young people from the workers uh to the pensioners uh so this is a kind of all so one possible interpretation that perhaps i'm going too far there is a definition of populism that i think is the most convincing and it is due to a political scientist is a dutch political scientist case matt he said that the populism is a very thin ideology in which um you just see uh the world is organized at two levels number one and you have the people ordinary people which is a very homogeneous group and however you have the elite which is corrupt and uh so once populists go to power they tend indeed to apply this theory in that they dismantle whatever is in between these two extremes the people and the elite and they claim to represent the people so they do away with all organizations civil society systems of checks and balances they basically this somewhat do not care too much about minorities so in italy young people are a minority today and in many european countries they are unfortunately a minority so there is a risk that something like that could happen i hope it's not going to materialize but it's it's something to think about well it's it's an important insight i i think when populism goes wrong it isn't because they're not responding to concerns that people have it's because there's some very impractical and maybe even theoretically flawed implementation that usually then goes badly so for example how could you have a party that ran appealing to young people and then you know go after the pension system which most people in this room knows involves a transfer from the young to the old and the answer is people don't make the connection i mean when i first came to italy there was a demonstration in rome populated by people who were then older than i was uh you know against reform of the pension system you know 65 70 year olds and after watching this for two or three months i asked my wife who's a journalist i said do they know they're demonstrating against their own children and grandchildren and and she said of course they don't you know there's the people and then there's the government right or the elites that run the government and there's nothing in between in this notion that at some level the government is the people doesn't is a connection that doesn't get made and if you don't make that connection then you then you can make all kinds of mistakes you think you can do both that you know you can cut taxes you can increase the pension benefits uh it won't hurt the young people because it doesn't we haven't done the cost calculation and so on so i think that that that way of thinking about it is is insightful and helpful yeah i think you're right indeed we we ran a survey among people contributing to italian social security we did ask them how does the pension system works is it like a bank account where you accumulate is an individual account where you accumulate your funds and then you draw on these funds when you retire or is it something where the money you put in is used to pay the pension to the current pensioners and when you will retire you will get the same type of treatment and most of the people answered that they thought it was like an individual account so they don't understand the intergenerational transfer that is being operated by the pension system so that may explain the story so uh i think uh that was very very useful so i in the tradition of a festival we always have some question from the floor there is not much time but we can entertain a couple of questions that person there will you please stand up in the political in the political debate uh in europe as well in the last years there is usual dimension of this efficiency redistribution trade-off you know the rhetoric of sacrifices for doing structural reforms and also the path of productivity in states such as france and italy who has a pretty strong social security system and on the other hand like the reforms done in germany and the path of wages in that country but you mentioned growth as a redistributive force and so do you actually believe that this trade-off applies to to what extent does it apply in europe and to what is length does it apply to italy or to some countries in europe more or less thank you this is a very good question i assume everybody heard it so my view is that trade-off is way overblown that it isn't a simple trade-off between protecting people you know at the cost of giving up incentives and growth that's the way our profession could portray it for many years it's the way people compared europe and america for many years and i think it's it's misleading uh so what when i think when when you look at it more closely i think what you see is uh the evolution of social security systems that are designed in a creative way to design to be pro-growth pro-competitive uh in many places i mean you know the old socialist model uh produced sort of job protection very largely through protecting specific jobs and companies and that's been largely abandoned because that one does you know is an example of the kind of trade-off that you that you were talking about it was abandoned in germany in a kind of clear way in the early period after 2000 but it's being abandoned almost everywhere so that doesn't mean you're abandoning social security you're protecting people as the previous panel said it's just you're doing it a different way and if you can make that that social security system oriented toward retraining people and jobs uh then i think you've you've really started to move in the right direction the reason i threw in the growth component of dealing with this is if you only deal with the protective part you know and you've got some other problem you know that has to do with entrepreneurial entrepreneurial opportunity or other things that we've talked about here so i won't repeat them all you know that's an important part of life for a lot of people uh and so if you leave it unaddressed you'll you'll adversely affect welfare and you'll adversely affect sort of economic performance as conventionally measured so that's why i think these two things belong is you know in a bucket where you view them as complementary rather than largely competing with each other well thank you very much very inspiring conversation and makosa in these days i heard many people saying that contrary to other meetings on the economy the festival is very inclusive and fosters the participation of many data well others will draw the final line on this festival that the participation is much higher than being physically present present in the venues of the conference 104 events in the program 218 speakers 69 to a person many uh meetings happening simultaneously with a lot of visitors but most importantly remote visitors yesterday we had gone beyond the number of people visiting the website and downloading the papers more than five million people today excluded and the number of people who followed us in streaming uh were numerous i really hope that many others will visit and download the podcasts so that they can browse what we uploaded on the website as for some criticism by press people is that we have not many politicians here well obviously we invite important persons who have an important role in the economy and in politics you know the new government was created just a few days ago so we had no time to invite the new members of the government and we had also some surprises we could not do differently but all in all indeed we want politicians to come here to listen not only to lecture and we have a lot of things to say i don't know maybe many politicians visited the festival and we don't know others you know visited us remotely and i hope they could follow us i learned a lot from this edition of the festival and i hope that could benefit also the members of the government i'd like to invite the people who made this festival possible up here i'd like to invite the president of the autonomous province of trento mr ugorosi roble who is a minister of the municipality trento marilyn the francesca who has always been the driving engine everything was perfectly organized also with the unexpected visit by george soros congratulations and the members of the editorial committee who worked with us to select the speakers and the subjects in ochento chipoleta andrea fracasto jose pelaterza we also have paolo callini who is not with us now his contribution was really very precious see thank you i would like to add some words of gratitude to you all attending the event in trento we are very proud of the fact that this year we had so many remote visitors of the festival this testifies to the high quality of the festival i do not know whether i can represent the category of politicians but i can say for myself that over the years i have sought to listen more than to talk and that i have brought home important messages from the festival we have sort of had a lot of discussions about politics recently perhaps too much so it's fine that there were so many politicians here at this edition of course the festival will go on this is the end of our term in office we are approaching the end of this term of office of this uh legislature and yet even though it is so we guarantee continuity for sure we will have uh the next year's edition being continuously programmed by those who are in office now so who will follow suit will certainly also decide to continue because this festival is very worthy i would like to thank those who are not here on stage and there are so many of them who helped with the festival i'm thinking of people who support us from the viewpoint of technology and so thank you for doing more than you were expected to do also in contractual terms and of course we will have to address this together see you next year you