June 10 (Bloomberg) -- Alessandro Ortenzi, 26, entered the University of Bologna in 2006 to study pharmacy. When he finally graduates next year, he still won’t qualify for hospital work.
“I’ve spent a lot of time here studying,” Ortenzi said, taking a cigarette break outside the library. “I wish I could have finished earlier.”
Like many Italian students, Ortenzi is enrolled in a plodding higher-education system that lets undergraduates linger on campus for years and retake final exams six times. While top U.S. universities embrace innovations such as online learning and strive to produce more scientists and engineers, schools in Italy are disconnected from the economy and only recently opened campus career offices. The country’s neglect of its colleges damages industry, fuels record-high youth unemployment, and is destabilizing politics, business executives and economists say.
“It’s an incredible destruction of human capital,” said Francesco Pastore, a labor economist at the Second University of Naples who studies education. “It’s a steeplechase with no winners. Everyone is losing.”
Young college graduates in Italy have among the highest unemployment rates in Europe, and those with jobs make only 9 percent more on average than those with high-school diplomas, compared with 37 percent in other industrialized countries. Italians also spend more time earning degrees and drop out at greater rates than their international peers.
Once they finally graduate, students are ill-prepared for working life, Pastore said. Course work often lacks a practical component, internships are rare and career-oriented summer jobs non-existent. Until recently, nothing connected them to the world of commerce, said Giorgio Bellettini, a Bologna economics professor.
“There used to be no link whatsoever between the university and the placement of jobs,” Bellettini said. “It would have been considered vulgar.”
At Piazza Giuseppe Verdi, the heart of the University of Bologna, students sprawl across the flagstones in the sun, eating lunch, playing guitars and handing out fliers for class elections. They’re in no hurry to leave college because there are no jobs waiting for them, said Christopher Ceresi, 22, a second-year student from Senigallia, on the Adriatic coast.
“The feeling is that after university, no one will find work,” said Ceresi, who studies political science. “That it doesn’t matter what we do, because a diploma doesn’t mean anything.”
Italy’s economy has been in recession for almost two years and the Organization for Economic Cooperation and Development forecasts gross domestic product will fall 1.8 percent this year. The jobless rate overall was 12 percent for April, the highest in at least 36 years, and 41 percent for those ages 15 to 24, according to Eurostat, the statistics service of the European Union. In the 27 EU countries, only Spain, Portugal and Greece had higher youth unemployment rates.
In a May 2 news conference in Brussels, Italian Prime Minister Enrico Letta called youth unemployment “the real nightmare of my country” and “the crucial point of our political and economic fate.”
The unemployment rate for Italians ages 25 to 39 with a college degree was 10.6 percent in 2012, just below the 11.1 percent for those with only a high-school diploma, according to Eurostat. By contrast, the jobless rate of German college graduates was 2.6 percent, half that of people with only high-school degrees.
In the U.S., 8.3 percent of those from 25 to 34 were unemployed in 2012, according to the Bureau of Labor Statistics. The unemployment rate for all U.S. college graduates 25 and older was 3.9 percent in April.
Italians in their 20s, either in college or out, have traditionally been supported by their parents, making youth employment less critical, said Bellettini, the Bologna economics professor. As the older generations now face job losses and cuts in pensions, there’s less money for their children, he said.
“For Italy, it’s really a shock,” Bellettini said. “Children are looking for work earlier, and they’re showing up in unemployment figures.”
Italian employers have exploited the willingness of parents to support their children by offering low starting salaries, he said. That’s why there’s little premium for college graduates, Bellettini said.
For many young Italians, the solution is to leave. There are 338,000 Italians working in Germany, more than from any other country except Turkey. Another 82,000 are in Spain and 77,000 are in the U.K., according to Eurostat data.
Frustration among young college graduates and other young people played out in February’s elections, helping boost the anti-establishment party of comedian Beppe Grillo. His Five Star Movement captured the youth vote and threatens to upend the political structure, said Erik Jones, the director of European studies at Johns Hopkins University’s Bologna Center.
In a field with six major parties, the Five Star Movement received 26 percent of the votes. It garnered 35 percent of ballots cast by Italians from 30 to 44, and 38 percent by those under 30, according to polling by LUISS University in Rome.
“If you’re in your early 30s right now, it’s not that you don’t have a job, but your prospects of getting a job are basically zero,” Jones said. “The whole system seems to be rigged against you, and that is consistent with support of Beppe Grillo.”
On a rainy spring day in Rome, Eleonora Vinci visited an unemployment office to update her resume. Vinci received two degrees in art history from Rome’s La Sapienza University and a certificate in gallery and event management. She has been looking for a job since January and occasionally working as a secretary in a music school
While she once hoped to teach or curate in a museum, she said she’ll settle for working as a gallery manager’s assistant.
“I’m 30, and I’m too old to do an internship for free,” Vinci said. “I’m afraid. Maybe I’ll have to wait a year for a job.”
Vinci lives with roommates in an apartment owned by her father, while her boyfriend, who works part time, lives with his parents. They talk about children “but it’s impossible now,” she said.
“We have no money, we can’t get married,” she said. “The situation ruins relationships but we try to be strong.”
The University of Bologna dates its founding to 1088, making it the oldest university in the western world. In 1158, Frederick I, the Holy Roman Emperor, granted the first rights of academic freedom to Bologna scholars. In the Middle Ages and Renaissance, the university drew students from across Europe, including astronomer Nicholas Copernicus.
Bologna, which has about 87,000 students on five campuses, is one of 55 public universities Italy. No Italian schools, public or private, are in the top 200 in the Times Higher Education’s rankings of global universities, and Bologna is grouped in a tier ranked between 276 and 300.
Spending on public higher education in Italy declined 11 percent to 7.9 billion euros ($10.4 billion) in 2011 from 8.9 billion euros in 2009, according to government data compiled by Bloomberg. Additional cuts will reduce funding to 7.5 billion euros next year.
Italy spent 1 percent of its GDP on higher education in 2009, according to the Paris-based OECD, compared with 1.3 percent for the U.K. and 2.6 percent for the U.S. Italy also trails in spending on total research and development.
Italy doesn’t have a culture that supports innovation and entrepreneurship, especially compared with competitors in the U.S., China, Korea and Germany, said Nerio Alessandri, founder and chairman of Technogym SpA, a Cesena-based maker of exercise equipment.
“The current situation in Italy is the result of a process lasting for some 20 years of a country completely wrecked in terms of culture, discipline, rigor, ethics,” Alessandri said in a phone interview.
“What we urgently need is a change in policies and incentives focusing on youth, startups, creativity, innovation, research, universities,” he said.
Historically, Italian universities were reserved for the wealthy, said Dario Braga, a chemistry professor and Bologna’s deputy rector for research. That changed in the early 1970s, when access was expanded to the masses, with low fees and few, if any, entry requirements, he said.
“Merit became a bad word,” he said from his office in a 16th century baroque palace. “You shouldn’t speak of meritocracy, and now we’re seeing the result of that.”
Compensation at Italian universities is based on seniority and the schools are barred from paying their most talented scholars more to retain them, Braga said. As a result, they flee for higher paying jobs in the U.S. and U.K.
“We spend a lot of taxpayer money to train the best people and then we give them to the rest of the world,” Braga said. “Italians are very generous.”
Public universities still cost little to attend -- Ortenzi, the pharmacy student, will spend 1,900 euros in fees this year -- and many programs are open to all high-school graduates, regardless of ability.
Studies drag on in part because professors are required to offer exams multiple times for six months after the end of the course, and it’s customary for students to retake tests if they don’t like the results.
Ortenzi said he took the organic chemistry final six times. He said that while he’d like to work in a hospital, it would require more studying and passing a certification test from the state. Instead, he said he hopes to get a job in a pharmacy, probably by relying on family or university connections.
The University of Bologna has been trying to reduce the time it takes to graduate and has created a job center to match students and employers, said Gianluca Fiorentini, deputy rector for teaching activities.
Some schools now require entry exams, and departments can receive additional funds as an incentive for graduating students on time and to help them find jobs, he said.
The university has also started talking to employers about what courses it should offer, and making sure its programs are tailored for the job market, he said. Still, the school won’t divert from its mission in order to chase fads, he said.
“We are not a recruiting office,” Fiorentini said. “We are not an executive university. We are a very large university with a tradition of general education.”
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