"Brain drain" threatens Europe's third-largest economy, while  2004 budget allocates $1.2 billion over the next 10 years to create the Italian Institute of Technology, which he hopes will develop into a research center on a par with Harvard University in the U.S. and Cambridge University in Britain.
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EUROPEAN BUSINESS
WHY ITALIANS ARE SAYING "ARRIVEDERCI"
The country's best and brightest are moving abroad to further their careers

Business Week
DECEMBER 8, 2003

Pierluigi Carratu loves Italy with all his heart. The Naples native makes pasta dinners with his friends, reads the Corriere della Sera, and likes his espresso strong. But Carratù, a 36-year-old pulmonologist, is a long way from home. He returned to the University of Tennessee, Memphis, this summer, where he worked as a researcher for three years, after learning that the assistant professor position at the University of Bari he had been promised was unavailable. A three-year-old national hiring freeze on researchers and professors had been extended indefinitely. "I'm discouraged by Italy," says Carratù. "It's much easier to find a position in the U.S. -- even other places in Europe."

That's just what Italians are doing, by the thousands. At a Nov. 8 protest in Rome, some of the 1,700 researchers like Carratù, who had been promised jobs at public universities and research institutions, waved their passports and plane tickets, threatening to take other positions abroad. Their departure would aggravate the already chronic brain drain in one of Europe's largest economies. Every year, at least 5% of Italy's 180,000 new college graduates leave their homeland. In contrast, most Europeans stay at home. Less than 1% of European Union graduates have left their country to work overseas.

PALTRY RESEARCH SPENDING
Italy's brain drain dangerously undercuts the ability of Europe's third-largest economy to seed 21st-century growth industries. That transition is increasingly urgent as developing countries such as China sharply erode Italy's once-vaunted export strength in medium- and low-tech goods, such as machine components, shoes, wood products, and valves. "It's like taking an investment and throwing it out," says Giovanni Peri, an economics professor at University of California at Davis who co-authored a report on Italy's brain drain and is himself part of the trend.

The wave of departees runs from bankers and economists to engineers and neurologists. The City of London is chockablock with Italians working in finance such as Carlo Calabria, co-head of European M&A for Credit Suisse First Boston in London. Some of the most successful Italian execs are abroad. Guerrino De Luca heads Logitech International (LOGI ) out of Fremont, Calif., and Giuliano Berretta, CEO of Eutelsat, is based in France.

Indeed, the hardest hit sectors are clearly science and technology. Prime Minister Silvio Berlusconi has cut Italy's already paltry public spending on research, reversing his campaign promise. The scarcity of funding has long pinched the wallets of PhDs, and no improvement is in sight. Researchers can hardly live off the entry-level salary of $1,200 a month, just one-third the amount paid for comparable jobs in the U.S.

Italian politicians are trying to entice expatriates back with bonuses, income tax breaks of 90%, and new research institutions. President Carlo A. Ciampi has called for $120 million to fund research jobs and end the hiring freeze. Berlusconi's 2004 budget allocates $1.2 billion over the next 10 years to create the Italian Institute of Technology, which he hopes will develop into a research center on a par with Harvard University in the U.S. and Cambridge University in Britain. But finding such large sums of money will be tough, given Italy's slow growing economy and high national debt. Unless the Berlusconi government reins in spending, EU officials warn, it could soon breach the budget deficit limits for countries using the euro.

Italy's academic culture is as big a problem as the chronic shortage of funding. Scientists who have left Italy complain bitterly of academic hierarchies back home that reward subservience to aging department heads and fail to promote young talent or honor merit. As Berlusconi struggles to find the spark to ignite Italy's stagnant economy, he'll have to do more than wave a quick tax break at the departing intelligentsia or subsidize a new institute. To lure back the sharp minds, Italy needs to revamp its research system by promoting competition and rewarding innovation. That's going to require a lot of homework.

By Christina Passariello in Paris

BW Online | December 8, 2003 | Why Italians Are Saying "Arrivederci"
http://www.businessweek.com/magazine/content/03_49/b3861075_mz054.htm