Rethinking industry and the role of AI, Assolombarda and the urgency of innovation

TheAssolombarda’s 2025 General Assembly was entitled ReThinking Industry and focused on productivity and the impact of innovation, particularly artificial intelligence, on businesses. Speakers included Alvise Biffi (pictured), attending his first Assembly as president of Assolombarda; Giuseppe Sala, mayor of Milan; Attilio Fontana, President of the Lombardy Region; Adolfo Urso, Minister for Enterprise and Made in Italy; Emanuele Orsini, President of Confindustria; Roberto Cingolani, CEO and General Manager of Leonardo; and entrepreneur and tech pioneer Dhiraj Mukherjee, co-founder of Shazam and strategic partner of companies such as OpenAI and Google.

Below is a summary of Biffi’s speech, which emphasises the launch of the ForgIA project to make AI the driving force behind industry: with a 10% increase in SME productivity, the region generates €2.4 billion and highlights the urgent need for the Budget Law to have the courage to allocate as many resources as possible to innovation, including support for venture capital and private equity, and to define new energy strategies that can reduce the current cost, which for Italian companies is three times higher than that applied in other European economies.

Productivity issue: Italy has remained stagnant over the last 10 years, but the region continues to be a driving force

For thirty years, productivity has been the root cause of our country’s poor economic growth. Over the last ten years, average annual productivity growth in Italy has been zero. If we break down the decade into two periods, the overall trend remains stagnant, with a slight increase of +0.1% on average per year for the first five years from 2014 to 2019 and a slight decline of -0.1% from the pandemic to today. All this while, over the same ten-year period, the European Union grew by around +0.7% per annum and the United States advanced at a rate of +1.3%. In other words, we stood still while our partners raced ahead. Yet our region continues to be the driving force behind the country. It is Italy’s leading region in terms of businesses (965,000), employment (3.9 million) and GDP (€503 billion per year). And most of these figures are concentrated in the Assolombarda Quadrilateral: 516,000 companies, 2.1 million workers, €299 billion of wealth produced each year, about one-seventh of the national GDP.

Lombardy GDP, modest growth: don’t settle for growth close to zero point something

But beware: even the locomotive, if it does not accelerate, risks being overtaken. Lombardy’s GDP is expected to grow again this year, but by a meagre +0.6%, and expectations for next year remain modest at +0.8%. Obviously, global instability is weighing on business results, particularly in manufacturing, and this is evident in the most recent indicators: in the spring, industrial production was down by a weak +0.6% year-on-year and foreign demand fell by -0.3% in value. For our Quadrilatero area – Milan, Monza Brianza, Lodi and Pavia – greater growth is expected, with GDP expanding by +1.2% in 2025. These rates are too modest for those who want to remain leaders. We cannot go back to being satisfied with growth close to ‘zero point something’.

Tariff alert and euro-dollar exchange rate: €900 million in foreign sales in the territory at risk, a figure that could triple

“We risk being held back by external obstacles. Consider the tariffs imposed by the American administration: new barriers that affect precisely those sectors where Italy is strongest and that risk turning what should propel us forward into dead weight. In the short term, the impact on Italian businesses is over €7 billion, a loss that risks being much more painful in the long term, because the real danger is that our products will be replaced. Looking at our territory, €900 million in foreign sales are at risk today, but in the long term this figure could almost triple. These estimates take into account the direct impact of tariffs, but also the current weakness of the dollar against the euro, which acts as an ‘implicit tariff’ for our businesses. We therefore need a clear vision that goes beyond the logic of compensation. It is urgent to invest in innovation and quality to make Made in Italy and Made in Lombardy increasingly strategic in global chains. We also need to diversify our markets – from Mercosur to India, to the Persian Gulf, via Canada – to reduce dependencies and seize the opportunities offered by the new economic geography. This is especially true in times of geopolitical turmoil and the revision of companies’ localisation strategies. The goal, in fact, must be to make our country, with our territories at the forefront, an extraordinary area in which to produce and invest.

More investment in research and development: nine billion euros needed to match competitors’ resources

It is precisely at times like these that we need to look ahead and invest in order to increase economic potential. In Lombardy, 1.19% of GDP, less than €6 billion, is channelled into research and development, while comparable European regions are already spending more than double that amount. Our target must be 3%, and we are about €9 billion short of that. This is a large figure, but not impossible, and should be taken into account in assessments of the contents of the Budget Law.”

Cohesion funds: do not weaken regional development, consequences would affect the Italian system

“With regard to Cohesion Funds, however, the allocation of resources that takes into account local specificities, enhancing the ability to plan, attract and implement transformative investments, continues to be a priority. Conversely, therefore, the forced uniformity of different needs, the slowing down of timelines and the weakening of local development levers must be avoided, because this would penalise the most dynamic areas of the country – such as our territory – with damage that would affect the entire Italian system.”

We help micro-businesses become more productive: leveraging innovation, AI, skills and energy

The problem with productivity is that too often we are held back by bureaucracy, slow infrastructure, general fragmentation, markets, but above all because, as a country, we invest little in digital technology, technology and human capital. This situation has repercussions on micro-enterprises. They account for 95% of Italian businesses, far more than in Germany or France. They should be our widespread strength, but instead they are not because, on their own, they do not have the capacity to innovate and invest as needed. If we break it down by company size, in industry and market services, Italy’s productivity gap is entirely attributable to micro-enterprises, which have an added value per employee that is one third lower than that of their German counterparts: €36,400 compared to €56,600. This also applies to our territory, the Assolombarda Quadrilatero, and to Lombardy as a whole. In fact, even here, micro-enterprises lag behind in terms of labour productivity, albeit to a lesser extent, at -16% in terms of levels compared to their German counterparts (€47,700 compared to €56,600). Conversely, small and medium-sized enterprises in Lombardy significantly outperform their German competitors, with efficiency levels at least 20% higher. Fortunately, our low productivity is not a sentence, it is not an inevitable fate. The levers to work on to increase productivity are AI and innovation, skills and energy’.

AI opportunities: a growing market in Italy, but only 7% of small businesses have adopted it

“AI represents an opportunity to increase productivity. Generative artificial intelligence is already establishing itself as one of the most transformative technological factors for the industrial world, opening up new perspectives for the organisation of knowledge, process optimisation and the enhancement of human capital. Looking at the Italian market, artificial intelligence has grown significantly: in 2024, it reached €1.2 billion, a market driven mainly by generative artificial intelligence solutions, which alone account for 43% of investments. Once again, however, adoption mainly concerns large companies, because only 15% of medium-sized companies have already launched projects in this direction. This percentage drops to 7% if we broaden our view to small businesses.

An alliance on innovation for the future of businesses: today we sign ReThinking Industry

Together with the Italian Institute for Artificial Intelligence for Industry, Italian AI Factory for Leading Innovation AI and the Politecnico di Milano, Assolombarda is today signing an important agreement on innovation: ‘ReThinking Industry’. This initiative has been made possible thanks to the collaboration of local institutions, the Lombardy Region and the Municipality of Milan, and thanks to the partnership with Unione Industriali Torino. Furthermore, discussions have been initiated with other Confindustria regional associations. ReThinking Industry aims to transform a pyramid, that of innovation, which today is partly built but disjointed and fragmented, into a single, functioning organism: solid connections at the bottom, powerful infrastructures, open platforms, valuable AI applications. Because it is only from this harmonious overlap that the full potential of our industry will emerge.”

(The agreement was signed by Marco Gay, President of the Turin Industrial Union, Donatella Sciuto, Rector of the Milan Polytechnic, Fabio Pammolli, President of AI4I The Italian Institute of Artificial Intelligence, Alessandra Poggiani, Director General of Cineca, together with Alvise Biffi, ed.)

ForgIA is born to make AI the driving force behind industry: a data ecosystem to ‘forge’ AI solutions

“At the heart of ReThinking Industry is the creation of ForgIA, the first of 42 projects promoted by Assolombarda during my term of office. It is an open but protected ecosystem based on the principle of data sovereignty, which allows for the creation of a dynamic in which competing companies collaborate with each other in certain strategic areas while continuing to compete in others. In essence, companies cooperate to develop technologies, common standards, infrastructure or markets, while continuing to compete on products, services or market share. You have to imagine that this ecosystem is part of a real pyramid of innovation, made not of stones, but of data, infrastructure and intelligent applications. Today, data is an asset on which the competitiveness of our production system depends, and it is much more than a resource: it is the engine of innovation and long-term sustainability. Therefore, the watchwords that must guide our actions are data sharing and aggregation: to anticipate change, optimise processes and respond agilely to crises. ForgIA therefore aims to build an ecosystem of data shared by supply chains and industrial districts, made available to forge artificial intelligence solutions. Its creation makes it possible to organise, enhance and make industrial data accessible, with the aim of increasing the productivity of the manufacturing system and promoting the digital transformation of businesses’.

With a 10% increase in SME productivity, the region generates €2.4 billion. At national level, the benefit can reach €9 billion.

ForgIA is an asset of extraordinary competitiveness for our businesses that can generate benefits at both local and national level. A 10% increase in productivity among micro, small and medium-sized industrial enterprises in our region could generate an increase of €2.4 billion in added value, equivalent to a 0.8 percentage point increase in GDP for the entire Quadrilatero economy. Taking Turin into account as well, thanks to the partnership with Unione Industriali, the incremental added value rises to €3.2 billion. The initiative is an open platform, which the entire national production system can join: even assuming an average productivity growth of +5% in micro, small and medium-sized industries, the benefit could reach almost €9 billion, thus generating a stimulus equal to 0.4% of Italian GDP’.

Budget Law, more courage is needed: the time is now, resources must be allocated to innovation

“More courage is needed on the issue of the Budget Law: the time is now. We expect more from the Government on the innovation front: it is essential to shift all possible resources to generate investment in a key area for competitiveness and growth. To give a concrete comparison, in 2024 the German government allocated €44.9 billion to research and development, while we allocated just €13.5 billion. This means that per capita spending is more than double in Germany (€538) than in Italy (€229). We must begin to close this gap.”

Transition 5.0 too complicated and Industry 4.0 weakened: this is not the way forward

In recent years, with Industry 4.0, Italy has demonstrated that when tools are simple and effective, businesses respond, invest, and grow. Then, with the latest budget law, the impact of Industry 4.0 has been greatly reduced and, at the same time, the Transition Plan 5.0, although full of ambition, has seen its strength undermined by the extreme complexity of the procedures: out of €6.3 billion, the most recent estimates tell us that the programme will end up having used only €3 billion. This is not the way forward.”

A new, clear and easy-to-use tool is needed to enhance software, services and intangible assets.

“That is why the next budget law urgently needs a clear tool, with real resources for innovation and easy to use. Only in this way will businesses be able to unleash their potential and become more productive. And, regardless of what it is called, there are some key points that are essential for the new measure to be successful: it must be immediately applicable, like the original 4.0, to avoid – as with Transition 5.0 – months of delays, uncertainties and complications; it must have reward rates of at least 45% – a value currently only envisaged for the most favourable configuration of 5.0 – because certain categories of investment, such as experimental Artificial Intelligence solutions, need to be strongly supported; software, services and intangible assets must play a central role, also to support the development of applications and customisations linked to businesses in our territory’.

More resources are needed for innovation: strengthening private equity and venture capital

“To stimulate innovation, we need resources, both public and private, and we need tools to put them into action. Think, in particular, of venture capital capable of supporting businesses at crucial moments. In Italy, investments in private equity and venture capital are still not very widespread and quantitatively reduced, accounting for just 0.4% of GDP in 2024, compared to 0.9% in France. In absolute terms, the gap appears even wider: €9 billion in Italy compared to €26 billion in France. This lack of investment obviously translates into difficulty in generating truly scalable, international-scale start-ups, and even unicorns.”

This region has human intelligence, let’s really invest in it

“Behind every innovation there are real women and men. There is their expertise, their creativity, their ability to imagine new solutions. There is human intelligence. There is talent, which can be found in factories, offices, laboratories, start-ups and schools. And our country certainly has it. As always, the Assolombarda area is a champion of results. Our area produces 17% of the highest quality scientific articles in Italy and 29% of Italian patents. This is because our territory is a hub that creates complex knowledge: 9 universities with 265,000 students, 12 ITS (technical colleges), 18 scientific hospitals and an institute of advanced higher education. There are also two foundations of national interest that promote cutting-edge research, one in life sciences located in the north of the metropolitan city of Milan, the other in semiconductor integrated circuit design based in Pavia, as well as numerous private and corporate laboratories. Not to mention the presence of 2,700 innovative start-ups, 22% of those in Italy. The question, therefore, is not whether this human intelligence exists in companies, but rather how to enable it to express its exceptional creativity. The truth is that it is not talent that is lacking, but the courage to really invest in it and embrace change’.

Crucial skills for innovation: a national plan is needed

“We need something more ambitious and stable, not a one-off aid package, but a permanent structure to support businesses in investing in training, research and lifelong learning. Therefore, the call for policy is: an impromptu measure is not enough; we need a national strategic skills plan, with robust tax credits and multi-year commitments, so that businesses can count on predictable and lasting support as a country system. Because human intelligence and artificial intelligence are travelling companions. Every innovation, in fact, before being a technology, was someone’s idea. If we want a country capable of leading the future, we must realise that people are and always will be our most valuable asset. But we must have the opportunity to invest in them.

47.2% of candidates sought by Lombardy businesses cannot be found: bridging the mismatch

“For this reason, the integrated alliance in which schools, universities, research centres, ITS and businesses collaborate to develop the digital skills – both technical and cross-disciplinary – necessary to support growth must be further strengthened. Assolombarda has been working on this at a regional level for years. This is the only way to overcome the mismatch between supply and demand, a problem that affects 47.2% of candidates sought by Lombardy companies and who are impossible to find, particularly specialised figures and emerging professions needed to support digital transformation and the effective and responsible adoption of artificial intelligence.”

High energy costs are a cause for concern: we pay three times more than our competitors

“The cost of energy remains a real and dangerous competitive imbalance. Today, in Europe, our companies pay up to three times more for energy than other major economies. In September 2025, the average cost of electricity, Single National Price, in Italy was 109.08 euro/MWh, compared to 34.81 in France, 83.51 in Germany and 61.04 in Spain. This gap is due to the fact that the price of electricity in the European Union is linked to the price of natural gas used for its production, and Italy is more penalised because it uses much more gas than other European countries to produce electricity. A programmatic and systemic approach to industrial policy is urgently needed. A strategy that considers all technologies and focuses on building an energy mix that optimises the country’s competitiveness, energy security and environmental sustainability. Because the strength of our future will also depend on the strength of our energy. And there is no future without industry. Neither for Italy nor for Europe’.

Energy: in the short term, accelerate the transition to renewables, focus on green gas and nuclear power

In the short term, we must accelerate the development of mature and competitive renewables, such as photovoltaics and wind power, overcoming the critical issues affecting the development of renewables in Italy, such as infrastructure constraints, slow authorisation processes and limited availability of land, which compromise their competitive development despite very favourable natural conditions. In the medium to long term, however, we must look boldly at all technologies capable of guaranteeing energy at a competitive price: so-called green gases – biomethane and hydrogen – to start decarbonising the sectors that are most difficult to convert; and new-generation nuclear power, which is now safer and more sustainable. Striving for a balanced and effective production mix by increasing energy production from renewable sources and integrating production according to the principles of technological neutrality without prejudice is, in fact, indispensable and necessary.

Energy at the service of innovation: looking at new solutions such as district heating

“Consuming well and consuming energy better, therefore, following the logic of energy efficiency, because it is essential to reduce waste and improve efficiency, innovating processes and using the most advanced technologies. Improving efficiency means consuming less, including through recovery and circularity. A concrete example is district heating, which can also be powered by recovered heat, such as from data centres, bringing heat to homes and businesses and facilitating the renewal of obsolete and inefficient heating systems. There are 10,332 data centres worldwide, including more than 2,200 in Europe and 168 in Italy: Lombardy is emerging as a rapidly growing strategic hub, with 74 concentrated in the Quadrilatero area and Milan alone accounting for 46% of the national capacity. In a scenario of full development, their integrated application would allow Italy to save a total of 5.7 million tonnes of CO2 per year, with an estimated economic benefit of around €1.7 billion.

‘AI divide’ could become a new fracture in the age of speed; a generational pact and alliance between businesses is needed

“The biggest test is the pace of change. Today, competition is no longer just between companies or countries, but between different speeds. We live in an age where every innovation is measured in months, not decades. Where an idea can change an industry and an algorithm can change an economy. This is where a new boundary opens up: between those who will be able to run with change and those who will remain on the sidelines. After the digital divide, the AI divide will arrive: the gap between those who will be able to understand, apply and govern artificial intelligence, and those who will simply suffer it. A divide that cannot be measured in megabytes or connections, but in adaptability. And that could become the new fault line. We therefore need a generational pact, not to divide roles but to unite them. A pact between those who have a vision of tomorrow and those who have built the experience of yesterday. Young people bring speed, mastery of digital languages and a drive towards the new. The more experienced generations bring an overview, depth and the ability to transform change into value. We also need an alliance between large and small businesses, so that the strength of one becomes an opportunity for the other. Only together can we cope with the speed of our times.

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