The financial crisis has considerably modified the environment in which Italian firms operate. It has introduced new problems in the export sector that are related not only to structural changes in the capital markets but also to difficulties in accessing credit.
Furthermore, European hegemony in the international markets, whose roots date back to the commercial relations built during colonial times, is in decline. Recent changes have brought definite advantages to emerging countries, and have exposed the European development model and its emphasis on rules to the risks of international competition.
Despite the inherent difficulties of this situation, data shows that Italian exports have reacted well in the past few months, pulled by the demand of the emerging economies. In June the flow of goods and services from Italy increased by 67% towards South America, by 68% towards Turkey, and by 31% towards China. What’s more, the Italian economy has proven to be particularly attractive to foreign investors. According to the UN, in 2009 Italy was the only Western market that doubled its direct foreign investment, which went from $17 million to $31 million.
In order to continue growing, the country will need to leverage its strengths while simultaneously addressing the weaknesses that afflict its economy. This means bolstering small and mid-sized firms, helping them reach the greater productivity and distribution of the emerging markets.
Not only is the banking system, which has proven to be one of the most solid in Europe, fundamental in this, but so too are policies that provide greater support for small and mid-sized company business networks. In order to achieve this, improving the credit system and adapting it to the needs of these networks might be necessary to favor greater synergies.
Another fundamental need is promoting Italian export. The existing programs need to be thoroughly reformulated if they are to become efficient and effective. Increased coordination between all the bodies that promote Italy throughout the world is necessary, as might be the creation of one single body – private even – which can move nimbly throughout the markets.
The final objective of these reforms is to support the system so that it may become one characterized by mid-sized, multinational, networked firms capable of competing in international markets. To this end, the country demands not only a revolution of promotional activities, but one in human resources as well. Betting on the quality of the workforce, in light of greater international competition on costs, is actually essential in order to meet the global competitive challenge. This challenge will be met by European companies through constant innovation and a renewal of their productive systems.