Italy Looks to New Economy to Leapfrog Competitors

ROME (03/17/2000) - Italy is turning to the new economy to close the gap that separates it from the most advanced industrialized countries, Prime Minister Massimo D'Alema told a news conference today. D'Alema was presenting a government-backed initiative to provide up to 600,000 high school students with cheap personal computers to be purchased with interest free loans.

"Italy is in a favorable position to participate in this race," D'Alema said, speaking at the presentation in the headquarters of the Italian Bankers' Association (ABI). "Certain structural delays count for less today and a whole development phase can be skipped." The prime minister predicted that Italy would have 10 million Internet users by the end of this year. "Our country is showing an exceptional acceleration in this field," he said.

ABI's members are backing the PC scheme by providing interest free loans to the parents of 14- and 15-year-old students, which can be paid back in monthly instalments of around 60,000 lire (US$30) over two years. PC manufacturers are expected to agree to a 60 percent discount on the retail price of their products as part of the project to stimulate Internet use in Italy.

"I sincerely believe that the initiative we are presenting today will help to close the gap that separates Italy, not only from the U.S., but also from the rest of Europe," ABI Chairman Maurizio Sella told reporters. "Our children will be able to close the gap and will have the same advantages as their contemporaries in other countries when they come to enter the labor market."

The PCs for students project is just one of a number of government initiatives intended to harness the new economy as a motor for economic growth, D'Alema said. Another project, announced recently, involves the provision of computer and English courses for the young unemployed in Italy's depressed South. The scheme is intended to help some 600,000 people aged between 16 and 30 to acquire job skills over the next three years, a spokeswoman for the Labor Ministry said.

"We have 4 percent to 5 percent unemployment in the north and 25 percent to 30 percent unemployment among the young in the South, so there is no way this project can be accused of being discriminatory against the North," the spokeswoman, who declined to be quoted by name, said. "If you want to tackle unemployment, you have to target the South."

Participants in the training scheme will be required to leave a deposit and will then receive a PC on loan from the state, the ministry spokeswoman said.

At the end of their course, students will receive an information technology diploma and may be offered the opportunity to keep their computer in exchange for their initial deposit. "Three hundred billion lire is available to finance the scheme this year, but some of the technical details still have to be worked out," she said.

Italy's IT modernization will make another leap forward this summer, when the federal government public administration offices are due to switch their procurement process online, a move expected to save between 20 and 30 percent of current costs. Responsibility for e-procurement has been passed to Consip SpA, a company controlled by the Treasury Ministry.

"We expect to make our first online purchases in June, initially for photocopiers and office supplies," said Paolo Rella, the director of the e-procurement project. "Eventually all our purchases of supplies will be carried out over Internet." The initiative will make the state administration Italy's largest e-commerce client, giving a boost to the nascent industry and saving time and money for the state, Rella said.

The new procurement system will allow economies of scale, save on internal administrative costs and speed up the entire purchasing process. Supplies should be delivered within days under the new system, rather than taking months or even years to arrive, Rella said.

The new project will put Italy on a par with Europe's most advanced state procurement agencies in Denmark, the Netherlands and Britain, he said. "The public administration will become a promoter of e-commerce in Italy. For once the state will be working to stimulate technological innovation," he said.

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