start, however, and it needs encouragement. many firms that could revive their investment plans hesitate to do so. if they decide in favour, it will lead to an increase in employment, and the renewed confidence will spread to households as well. trusting that the recovery will gain strength, we must ask ourselves again why these years of crisis have been so much harder for us than for the countries against which we measure ourselves. our analysis will take us to the root of the structural problem that has beset the italian economy for several decades. between the last two recessions – that of 1992 – 93 and that of 2008 – 14 – something fundamental has taken place around our economy : the dominant world technology has changed, speeding up the pace of market globalization ; the euro has been created. most of italy ’ s productive system was slow to take up the new information and communication technologies as an opportunity to improve efficiency, as other national systems instead did. 6 it failed to grasp immediately that its addiction to devaluations of the lira, with their short - term competitive gains but lasting inflationary consequences, had to become a thing of the past and that competitiveness needed to be structurally reinforced. in reality, the productive system could do neither because the form and structure it had inherited were unsuited, being dominated by small firms, adverse to growth even when faced with a concrete opportunity to expand in size. that situation was the legacy of a familycentric culture and even more so of a political and institutional milieu hostile to a free market and entrepreneurship. italy has the largest productivity gap between small and medium - tolarge firms of all the main european countries. firms everywhere are born small, but then they either die or grow up quickly. in italy, if they don ’ t die, they remain forever in the limbo of stunted growth. steps must be taken to change this situation because it conflicts with the need for innovative capacity, which i will now briefly discuss. innovation the distinctive trait of modern times is constant innovation. a century ago, someone could easily spend an entire lifetime producing or trading the same goods or services with immutable characteristics, for which customers ’ demand rose and fell only with their changing financial situation. today, no goods or services stay the same except for a very short time, after which they must be renewed, in substance or at least in presentation, if they are not to disappear from the market. consumers want to be continually surprised by something they didn ’ t know existed

njuguna ndung ’ u : promoting financial integrity and financial inclusion – lessons from the kenyan experience opening remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at a convening co - hosted by the bill & melinda gates foundation, the central bank of kenya, and the financial services volunteer corps, nairobi, 30 january 2012. * * * mr. joseph kinyua, cbs, permanent secretary, ministry of finance ; mr. andrew spindler, president and ceo, financial services volunteer corps ; ms. claire alexandre, senior program officer, bill & melinda gates foundation ; distinguished guests and colleagues ; ladies and gentlemen ; 1. i am happy to participate at this important conference, as one of the organizers, jointly with financial services volunteer corps ( fsvc ) and the bill and melinda gates foundation. 2. but this morning i have a simple task, to welcome our chief guest, the permanent secretary, ministry of finance to make the keynote address and to officially open the conference. but before i ask him to come to the podium, let me make a few remarks. 3. let me begin by extending a very warm welcome to all the conference participants. to the participants who are drawn from beyond our borders, it is my sincere hope that your stay with us shall be enjoyable and that you will carry with you pleasant memories of kenya when you return to your respective countries. 4. ladies and gentlemen, the theme of this conference ; “ promoting financial integrity and financial inclusion : lessons from the kenyan experience ” is quite timely. it touches upon issues that are key to the mandate of the central bank of kenya of ensuring financial access, and the stability and integrity of the financial system. 5. this conference has been organized to further the fsvc ’ s objective of developing sound financial systems in emerging economies. the fsvc recently launched a program to support the development of an anti - money laundering and combating the financing of terrorism ( aml / cft ) regime in kenya that is both effective and compatible with the objectives of financial inclusion. under this program, it is envisaged that the fsvc will undertake aml / cft training and capacity building programs in consultation with the central bank, ministry of finance and other players in the financial sector. financial inclusion 6. ladies and gentlemen ; the central bank of kenya, in recognition of the critical role that financial inclusion plays in fighting poverty, promoting savings - investment cycles and economic development