for the italian economy to eventually close the output gap. but we have to solve an even more important problem, one of a longer term nature : productivity and potential growth still too slow. how to stimulate them is what structural policies should be concerned with. some important steps forward have been recently taken in this direction : i would just like to mention the labor market reform, the " jobs act ", which injected a decisive dose of flexibility into the italian labor market. other very relevant reforms are in the making, such as that of the judiciary and of the civil service. much remains to be done to boost potential growth. it's a long and multifaceted endeavor. a key factor is innovation. let me mention an example of a successful innovation of the past which combines most of the strength of the italian scientific and artistic culture : the “ vespa ” scooter ( slide 8 ). this is a symbol of the italian design, but also of technological ability, which became a global phenomenon so much that it has been exhibited even in the museum of modern art in new york. the idea of the vespa came to the manager of an aircraft manufacturer seeking to diversify its products right after the end of ww2. he wanted a totally different product from the existing motorbikes and therefore asked an aeronautical engineer who “ hated motorbikes ” to design the new scooter. the engineer came up with a completely different design, resembling a wasp, the english for “ vespa ”, and with several distinctive characteristics that made it extremely comfortable to ride. it took a few years, but the vespa turned into an astonishing success, also promoted by hollywood movies, such as the ride of gregory peck and audrey hepburn on a vespa through the streets of rome in “ roman holidays ”. the lesson that we draw from the vespa example highlights two ingredients that, still today, are crucial for successful innovations : human capital and what can be called “ managerial capital ”, i. e. the availability of managers with a risk taking attitude, able to use the latest technology, and capable to think out of the box. while it is difficult to maintain a high propensity to innovate in ageing societies, naturally tending to be averse to “ the new ”, this is a key challenge for policy, and it requires to keep investing to strengthen the education system at all levels and to promote an entrepreneurial culture in the population, especially among

will bear directly on the rates of workforce participation and, in turn, impact rates of potential economic growth across the industrialized world. at the same time, while in relative terms the old exceed the young, the number of young people in the world is the largest in history. but it is not distributed evenly around the globe : of the 2. 2 billion people added to the world population since 1990, less than 1 in 10 live in advanced countries. in addition africa, which comprises some of the poorest countries in the world, is expected to have the fastest population increase and to reach asian figures within this century in absolute terms. future higher pressures on migration flows are to be expected, as well as further, possibly dramatic consequences for climate change. in response to all these changes, which policies are countries called on to design and implement? my view is that the first and most important response to the confluence of rapid technological change, globalization and demographic trends should be to rebuild human capital and, then, to prioritize human capital investment as a key strategy for economic competitiveness and growth. many observers are now advocating for a greater emphasis on the more creative subjects into a wider school curriculum, integrating science, technology, engineering and mathematics ( the traditional acronym stem ) with the arts ( steam ) and reading and writing ( stream ). it is widely suggested that once both manual and data - driven tasks have been automated, human contribution will be concentrated in those creative tasks that will redefine product differentiation : understanding and anticipating the needs and behaviour of consumers, designing the aesthetics of new products and their integration into every - day life. but this is not sufficient : a more complex and comprehensive definition of “ human capital ” should be endorsed. in the 21st century, the traditional classroom method where knowledge is imparted passively from teacher to students is no longer enough. today ’ s citizens are required to develop and continuously refine a large arsenal of both cognitive and non - cognitive skills. they need to be able to search for specific information in the ever - growing digital ocean that is the internet, recognize the quality of this information and process it critically. to adapt to the modern and more flexible model of business organization, the workforce must develop soft skills such as problem - solving attitudes, teamwork, effective communication and negotiation. workers can survive and successfully exploit the acceleration of the pace of technological innovation only if they “ learn to learn ”, and continuously update their skills. re - designing education policies is an extremely challenging