Italy: Digital Revolution IoT, innovation & information crucial to future quality of life

Adrio de Carolis is well known as Italy’s guru of the digital economy, confirmed back in 1999 at the same time as Forbes featured him on their front cover. The CEO of market research and digital poll pioneer SWG, Mr de Carolis explains the company’s knack for handling the huge all of data on the internet and its findings on Italy’s renewed confidence, inclunding providing an insight into the role of social media research and analysis SWG can provide in preventing terrorist threats.

What is your personal perspective about the Internet of Things (IoT) and does it have the potential to shape a new industrial revolution?

I think that the digital revolution is something that the public, and as well some opinion leaders, probably do not really understand from presently on. The Gutenberg Revolution brought one of the fastest spreads of knowledge ever recorded; from that moment on things changed in an enormous way in the world, generating on one side the worst period of war in Europe.

The power of politics and leadership is historically linked with knowledge. At the same time as hundreds of millions or billions of people are able to have access to additional knowledge, it becomes additional difficult for the political and economic elite to try exerting control over the people. In my opinion, the digital revolution will change what we’ve seen in this last 20 years – or something less if we think about Google and Facebook’s foundations. It is nothing compared to what we will see in the next 20 or in the next 100 years.

I think some of the greatest problems we are facing in the economy and in the economy are linked with the high productivity that the digital economy and the digital revolution brought to the traditional economy. For example, in a classic economic model the goal is the total employment of people. Probably, the current shifting economic trends will at no time let us reach full employment again.

One of the majority significant changes is, in my opinion, the new interface we have with technology. Touchscreen is a real change. It brought not only millennials to interact with technology but as well older generations.

Voice recognition, touchscreen, and the Internet of Things – the technology to link different appliances and devices together, with energy savings applications for houses, for instance – represent the real change.

Are societies and economies ready for these disruptive innovations and changes?

I think that technology is not something you can stop and so we all have to better understand what the impact of this new technology will be on our lives. An extra interesting consideration is that although we enjoy easier and better channels of communication, the media culture is increasingly emphasizing bad news and scandals so that they can sensationalize the news.

However, at no time as in this period is the world doing better than in the completed. Millions of people are out of poverty; they can communicate, they are connected, they can have a social life. On one side, we all speak negatively about our period, but in reality and based on statistics available, this is a period of great development in the world.

In this respect, I think the Internet of Things will play a crucial role in improving our quality of life.

As you mentioned, political power and economic development are strictly linked to knowledge. Today with the access to digital platforms there's almost an oversupply of data. At the same time as it comes to SWG, what are the tools and the services that you provide in order to navigate this jungle of data?

SWG is a completely old company. It was founded in 1981, in Trieste, and it has always been linked with innovation and technology. SWG was the initial company in Italy to develop its own CATI (Computer-Assisted Telephone Interview) system at the beginning of the 1990s. In fact, we were the initial company able to produce quick polls, because at that time in Italy all the interviews were conducted face-to-face.

In the 2000s, we were again the pioneers and developed a CAWI system, namely Computer-Assisted Web Interview. Presently, we have the major web community in Italy with additional than 60,000 people registered.

I acquired the company five years ago. I am an entrepreneur in the digital economy. I founded and sold a lot of other companies. Five years ago, I met the founders of SWG and remained fascinated by the history of this company and Trieste. Our research and poll efforts go back to trying to answer a very ancient question, which is how can we predict the next?

I decided to buy the majority of the company and in the last five years I tried to do two things. From one side, I want to preserve the history and the brand of this company, which is really one of the best and most renowned brands in this market.

I want to remain a pure player of research. In this area SWG is the leader in Italy. DOXA, for instance, is pursuing a different strategy. They are integrating different marketing services and I don't believe this is a good way because the real key point of polls and research is to be really a third party.

On the other side, things are changing in the research arena. Everybody is thinking about large data. I think that the key point is the interpretation of the data.

One year ago, SWG participated in Voices from the Blogs, an academic spin-off from Università Statale of Milan founded by three PhD students and as well with a little participation of the university itself.

They developed in the last three years a way to process data and an algorithm called ISA, Integrated Sentiment Analysis, which is patented in the US presently. Google and iStarter awarded us for the best algorithm to make sentiment analysis and the analysis of conversations on social networks and on open data.

The process is based on two simple ideas. Initial, we define the scope of analysis. We do it offline, meaning that we buy from some companies. There are five companies in the world that store each day whatever is published on the web.

The second idea is that no software can really understand the meaning of a sentence. There is ambiguity in meanings that machines cannot define. So our idea is that the initial analysis has to be done with human beings, like any other qualitative analysis.

We abstract a sample and we start to understand it. From presently on analysis we use this algorithm that can define exact quantity, so it's quantitative research about that perimeter. In this way our output is basically both quantitative and qualitative. This algorithm can generate a statistical mistake of 3%.

It’s a success and we are really integrating this type of research with our traditional methods with really good results. We started to collaborate with The Guardian in the UK and in the last two years we have been monitoring Twitter in Arabic about ISIS. We are creating a map of all nations with Twitter in favor of or contrary to ISIS.

What do the findings suggest?

We published the initial executive summary of our research in The Guardian last summer and we said that Belgium presented the majority critical situation in terms of ISIS and foreign fighters’ conversations. As we are seeing presently, unfortunately, Belgium is one of the places where major security threats are coming from.

There is a debate about whether it is better to stop accounts spreading ISIS and foreign fighters’ discussions, or leaving them open. Our thesis is to leave them open and use intelligence to monitor them and predict their potential next move. The Washington Post reported as well this about Voices from the Blogs.

Feelings and perceptions are key in foreign investors decision-making at the same time as they have to pick an investment destination. Is there a sentiment of things changing in the country as a result of the government reform schedule?

I think that the arrival of Mr Renzi in Italy was really a revolution. Three years ago, the attitude of people and vision about the next was very bad. The perception was of a paralyzed country where nothing could succeed in changing things. Presently things are changing and there’s a new energy.

What do the polls say in terms of consumer confidence or next business outlooks?

From the data we have in the last two years, the confidence someday and the vision of the next is growing, for the initial time since 2008. This is something very significant because we know that economic increase is related to the positive mood of people, which impacts investment and consumption trends.

There are of course a lot of challenges ahead that need to be addressed. Streamlining bureaucracy and fiscal reform are two key aspects. Taxes are too high and they curb the potential for new businesses to thrive. Of course, we need to bear in mind that we are no longer autonomous and that the EU is reluctant to review certain regulations that a lot of times do not help the economic recovery…

Are you referring to the Fiscal Compact?

Exactly, but on the other side we don’t have the total integration with the EU, which could help Italy and all the nations to resolve problems from a regional perspective. We need additional Europe. Of course sometimes a different Europe, but the road is clear and coming back is impossible. This is as well something that we see very clearly from the data we have.

An extra key point is the economic situation in the south. Great emphasis needs to be placed in order to revitalize the economy in the regions of the south as there cannot be increase only in the north, which is by presently one of the richest areas in Europe.

You are a serial entrepreneur, a pioneer of the digital economy of Italy. For this reason Fortune dedicated its cover to you for being a “European Pioneer” in 1999. You founded a lot of companies such as Datanord, DoubleClick, and the Dmail Group. What are the secrets in succeeding in the new digital economy and what are the lessons that you have learned?

Frankly speaking, the period in which I started was very different from presently. I see a lot of people trying to think about consumer services or products and technologies that are related to the trends during the 1990s. For those activities, you need much additional capital to be successful presently.

We are just at the beginning of the history of the digital revolution. A lot of people want to start a business or being entrepreneurs but they say they cannot because they don’t have money. I think that if you have a good idea, money is not really a problem.

As well in Italy, where a lot of would think it’s very difficult to have access to credit, if you have a good idea you can find someone to finance you. I see a lot of people that, from the very beginning, aim at becoming billionaires and to make the large story. This is not the right attitude to have success. Because you make a large story if you are committed to your business and your ideas.

Passion and focus, not trying to do too a lot of things, and having a point of strength. You cannot start a business in the digital world without a key point of strength of your idea. In this way, Italy has a great chance, a perfect situation. We are in an extraordinary position to have a bright next, because we really own something that nobody else can boast, which is our history, the beauty of the country, the culture, food and artistic heritage.

Immaterial values are very, very significant for the next. The application of digital instruments to our assets is the best way to start with.