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The requalification of industrial areas in crisis: a vision for the future.

    Umbria and the case of Terni and Narni
    • Terni
    • 10 May 2019

          The crises of 2008 and 2011 had a greater impact on Umbria than they did on other parts of Italy and Europe. Conditions had already begun to deteriorate in the early 2000s, creating a division between Umbria, a region with a great manufacturing tradition, and the wealthier parts of the country. The study presented at the conference cited microeconomic data about the origins of the crisis and highlighted a sharp polarization of companies’ competitiveness. This polarization also occurred in other parts of Europe heavily involved in manufacturing, whether dynamic (such as Lombardy, Baden-Württenberg, Auvergne-Rhône-Alpes or Catalonia) or undergoing similar industrial restructuring processes (such as Hassen, Bilbao or the Midlands).

          Although at world level there is a focus on reexamining how manufacturing is organised, at regional level companies are trying to focus their activities on a particular segment of the overall production process in order to gain a competitive advantage. And this is useful with a view to presenting domestic and foreign investors with an area that can supply the world with products that other regions lack, precisely because of local comparative advantages.

          This depends on a solid financial foundation, however, in order to invest in innovation and training to achieve a high level of servitization of manufacturing, in view of the service sector’s crucial contribution to development and positioning in the marketplace.

          It is no easy matter to gain access to the credit market and to overcome the obstacles to access. So-called “patient capital” remains strategically important, since it can offer longer-term prospects to guarantee productive investments in technological transition and, even more so, industrial reconstruction. One possible solution is better use of European structural funds, particularly if they are closely focused on research, development and innovation.

          Training is another key requirement of recovery, with a particular focus on not only creating but also transforming knowledge. We must keep in mind that training is not confined to the younger generations but also includes adaptation to the major transformation under way, involving generations already in the labor market who have accumulated real knowledge of production and process mechanisms.

          In order to recover, areas in crisis need a series of reforms: first and foremost good governance, a simplification of the regulatory system and a reduction of red tape. They also need to seek a local identity, which can steer the state’s involvement in economic development. Work has been done to gather requirements and ideas and to correlate them to regional programming. This, so that the often-mentioned drivers behind development can reflect a clear local character and be fully exploited for the purpose of better targeted policies. It is important to establish approaches and modalities that will enable the economy – in the case of both SMEs and major companies – to embrace international developments and create local added value. However, Umbria has a high proportion of relatively inefficient enterprises requiring greater attention to turn them around.

          The rehabilitation of areas in crisis is crucially dependent on the exchange of ideas, and openness to new stimuli and input is crucial to local growth and development.