This roundtable saw those in attendance debate the role that foreign-owned firms play in the Italian economy, particularly with a view to identifying approaches and measures that could enable foreign direct investment inflows to be improved.
The participants noted that the magnitude of gross FDI inflows – accounting for 6.9% of gross domestic product – calls for this issue to be considered in earnest, particularly given the growing trend of rechanneling investment towards other geographic regions. Indeed, the current scenario has seen a significant reduction in foreign investment inflows to Europe and a shift towards investment in Asia. In this regard, Italy is in a worse position than its main European competitors.
In light of this data, it was felt that it would be useful to identify those areas requiring intervention with reform proposals that do not impinge on government budgets, but which at the same time could increase the investment attractiveness of Italy, thereby producing a positive impact on the competitiveness of the country’s production system.
The participants pointed to several factors in the prevailing scenario in Italy which constitute an obstacle to achieving this goal. Amongst others, these included the length of proceedings in the civil justice system, the taxation burden, the labor market rules in force and the size of the country’s public debt. It was suggested that these are not only factors which limit investment, but also represent areas in which efforts can be made to promote Italy’s greater competitiveness in the international market.
In addition to these factors, there are other problematic structural elements, particularly those relating to difficulties inherent in the regulatory framework and the complexity of the Italian bureaucracy. It was conceded, however, that these are constraints which can be overcome by larger firms with greater resources at their disposal. One factor deemed worthy of further attention, though, was regulatory clarity, which was viewed as key to ensuring a reasonably predictable outcome for investors. Also seen as desirable was an assessment of the ways in which bureaucratic procedures might be simplified, with a special focus on the system of required checks and inspections.
The participants acknowledged that there are unavoidable constraints regarding which not much can be done, such as labor costs, in respect of which Italy is not in a position to compete with other countries, though it can enhance its competitiveness by making efforts to improve the skills of people entering the workforce. To this end, two areas were identified where it was felt improvements could be made: firstly, in regards to ensuring standards of excellence in university research, and secondly, in relation to the quality of technical and professional training.
In addition, it was seen as advisable for the country to pursue a level of economic growth compatible with the preservation of its natural resources, which constitute one of Italy’s international strengths. It was stressed that in any debate concerning the country’s real value, those aspects pertaining to its perceived value – that is, those of a symbolic order – should not be overlooked. Finally, the participants condemned the widespread tendency in public circles to belittle – if not denigrate – Italy’s achievements and a corresponding failure to showcase the many opportunities that Italy offers to foreign investors.