Italy boasted record levels of growth in 2017. Exports grew by 7.4 percent, valued at a total of about 450 billion euros. The leading exports were in technology-intensive sectors like the automotive industry, pharmaceuticals, and machines. This high growth, the highest since before the Eurozone financial crisis, comes a year after Michele Scannavini was named President of the Italian Trade Promotion Agency (ITA) in mid-2016. His mission: to promote the internationalisation of Italian companies by driving Italian exports.
“Export has been, in the latest years, the key driving force for Italian GDP growth. Actually, if we exclude 2017, where we also have seen some good signs in internal consumption and on investment, it has been the only real growing factor,” said Scannavini. “So export is vital for the Italian economy and the Italian Trade Agency is there to support Italian companies to export more products abroad.”
Scannavini joined the ITA after more than 30 years in the private sector in multiple international markets, including the United States and France, with a plan to use digitisation to boost Italian exports. This is especially true with regard to e-commerce, as Italy currently represents just one percent of the total value of global e-commerce.
Painting a picture of the digital landscape, Scannavini explained, “Digital is not the cherry on the cake anymore; it is the cake on which you have to put the cherry.”
He cited the 2017 export figures – which showed the biggest growth in technology-intensive industries – in support of his leadership plan. Scannavini wants to use the “excellent technology” that Italian companies already have and communicate that to the international market. At the same time, Scannavini admitted that in digital commerce, Italy is late to the game; but that does not mean it cannot catch up.
This year ITA implemented a three-pillar strategy to get Italy up to speed on e-commerce: training, agreements with e-retailers around the world, and multi-channel activity (that is, making sure digital and e-commerce are integrated with any kind of promotional activity). The ITA announced its first agreement under this strategy at the end of 2017 with Yoox Net-A-Porter, an Italian online fashion retailer. The plan is to work with Yoox Net-A-Porter to support more than 100 small Italian fashion companies in presenting and selling their products in China and the United States. The ITA is also currently in talks with Chinese online retailer giant Alibaba.
The key to Italy’s future success is that it already produces established, high-quality products. The ITA’s job is to market them to the world. The Italian fashion industry, for example, is a main way of promoting “Made in Italy.” Scannavini explained, “It [the fashion industry] can be a showcase of the Italian way of doing business related to the creativity, related to the attention to detail, related also to the business model made of districts with strong competence and knowledge related to specific industries.” That’s why the Italian government, through the ITA, is investing €28 million in the Italian fashion sector for 2018 to boost exports. This will add further growth to an already robust market, as Italy is currently the world’s second largest exporter of apparel, with more than 400,000 employees and 47,000 companies working in the textile-clothing sector.
Bolstering this type of investment, the Italian Ministry of Economic Development launched its Industrial National Plan 4.0 (Industry 4.0) in 2016, just after Scannavini became ITA President, to generate money for technology research and innovation. It has translated into a huge increase in investments – about 80 billion euros in 2017 alone. Scannavini is a supporter. “Italy is very competitive in what we can call low to mid technology; it was not in the high technology sector. … the famous plan Industry 4.0 is really bound to increase competitiveness in this area,” he said.
Again, the key is that – despite trailing the leaders in the high tech sector – the country is actively taking steps to be at the forefront of high tech in the future – a move that is sure to boost its economy. At the same time, Italy is already the second biggest manufacturer in Europe, and among just five countries worldwide with a manufacturing trade surplus nearing €100 billion. It is the third largest exporter of flexible manufacturing technology, including robotics, with about €7.7 billion in Italian exports to the U.S. alone.
“The advantages [of investing in Italy] are clear,” said Scannavini. “Geographic position … a very good level of infrastructure, highways, railways, energy, telecom, and so on and so forth … high quality at a very competitive price … a system of incentives today to attract investors … And I should say also the idea to come and work and live in Italy is pretty attractive. For the Italian lifestyle, for the quality of life.”
Addressing investor concern about instability in Italian politics, Scannavini turned the tables, saying, “instability is a kind of a stable factor now in Italy and it is because the basics are very strong. The basics are very solid so there is no change of government that can undermine Italy’s ability to develop business and to make investments fruitful and with good returns.”
It is clear that Italian companies in the export business will be able to weather any storm that comes their way as long as the ITA is holding Italy’s door open for trade on the international market.