The chief thrust of discussions at this national roundtable was that Italy’s manufacturing base has demonstrated a great capacity for responding and adapting, even though the continuing economic crisis has seen a major industrial downsize. Indeed, between 2008 and 2014, the number of Italian firms fell by about 47,000, a drop primarily involving small and medium-sized firms, while manufacturing potential as a whole shrank by 18%. Thousands of jobs have been destroyed, dozens of long-established brands have disappeared, and international competition – accompanied by sudden technological changes – has become increasingly fiercer. Among the sectors most affected have been some of Italy’s leading specialities in the pharmaceutical, textiles and metallurgical industries.
It was noted, however, that Italy still remains the second largest manufacturing country in Europe and fifth globally. Thanks to medium-to-large firms operating in hi-tech niche markets, six of the European Union’s top ten super-specialized industrial provinces are Italian, while in terms of foreign market shares, Italian medium-tech firms are the world leading exporters in around a thousand goods. Italian products have established a reputation for themselves across the world through a combination of craftsmanship, design and technology.
The participants thus felt that the country’s industry and manufacturing success stories could usefully serve as a launching ground through which to lay the foundations for robust and sustainable economic growth. In addition to its positive impact on employment, a modern and competitive manufacturing sector represents an exceptional engine of growth for the country. Compared to the services sector, manufacturing has a higher multiplier effect on the rest of the economy, leads to more investment in both product and process research, and facilitates Italy’s integration into global value chains.
It was further observed that a forward-looking industrial policy could bring about the emergence of a reinvigorated Made in Italy, capable of leveraging its competitive advantages to ward off competition in new sectors through the development of green technologies, complex internationalization, and the deployment of large-scale production processes hinged on the use of 3-D printers. The participants called for government, businesses and social partners to work together to build a conducive environment for the Made in Italy brand’s four flagship sectors (clothing, furnishings, agro-industry, and mechanical automation), as well as for advanced manufacturing firms, medium hi-tech firms, and industrial districts.
It was suggested that it would be a mistake, however, to dwell only on the needs of domestic firms. In particular, special efforts were seen as required to tap into foreign direct investment (FDI), which tends to be directed not just towards emerging countries, but also towards advanced economies with regulatory systems more conducive to doing business than that in Italy. Figures were cited demonstrating that between 2010 and 2014, Italy attracted $16 billion in FDI, compared to $56 billion for the UK and $35 billion for Germany in the same period. The significance of these figures was considered in light of the fact that FDI contributes to GDP growth, enhances the value of know-how in the Italian supply chain, and facilitates the development of communities towards which it is directed.
By way of conclusion, it was remarked that the solution to activating this virtuous cycle involves following through on some already well-known proposals, namely: cutting down on red tape, supporting the knowledge economy, reducing labor costs, easing tax and social security compliance requirements, and improving the efficiency of the judicial system. In short, only a strong determination to resolve the systemic difficulties of the past can enable Italian industry of the future to take off and win global markets.