10 thruths about italian competitiveness by Fondazione Symbola

10 VERITÀ SULLA 10 TRUTHS ABOUT COMPETITIVITÀ ITALIANA ITALIAN COMPETITIVENESS

10 TRUTHS ABOUT ITALIAN COMPETITIVENESS Italy is suffering from a crisis, indeed a truly, deep economic crisis, despite the slight signs of recovery of our GDP. But it is not at all a country without future. We shall address issues that come from afar and go far beyond the public debt, such as social inequalities, black and criminal economy, delays in the South of Italy’s development policies, a persecutory and often ineffective bureaucracy. The global crisis deeply ingrained into these malfunctions, making them critical. To find a remedy will not be an easy task. But – as stated by the Manifesto Beyond the Crisis. Italy shall act as Italy sponsored by Fondazione Edison, Fondazione Symbola and Unioncamere and endorsed by many prominent personalities in the field of national economy – it is not impossible, if we just look at our country with new eyes. Starting from these 10 truths about Italian competitiveness. Italy is not one of the victims of globalization, loosing the competition to the emerging countries, despite a Vulgate that has so many supporters and authorative. We are among the countries that were less affected by the irruption of China and other Brics in the global market, maintaining 71% of the shares of exportation compared to 1999, as the U.S., while Japan suffered from a reduction to 67%, France to 61%, United Kingdom to 55% [POINT 3]. We profoundly altered our international specialization, updating and ‘synchronizing’ it with the new market demand. We are, infact, enlisted among the only five countries in the world (along with China, Germany, Japan and South Korea) to have a foreign manufacturing trade surplus of more than 100 billion dollars [POINT 1]. We initiated a real industrial and productive reconversion: starting a migration – more mature in some areas, less in others – from an economy focused on quantity of goods to a system that invests on quality of processes and products. We have been able to build added value in many traditional “made in Italy” labelled sectors – including textiles and clothing, footwear, furniture and nautical industry – in which we had been given up due to the competition coming from the emerging countries. Furthermore, we created new specializations, such as in the mechanics sector – which is nowadays by far the most important industry for foreign trade surplus – with innovative products for building industry, with means of transport other than motor vehicles and in chemical and pharmaceutical industry. Therefore, on a total of 5,117 products (the highest level of statistical breakdown of world trade) in 2012 Italy was first, second or third in the world for foreign profits in 935 products [POINT 2]. The reason for this leadership lies in the ability of our businesses to innovate in all fields, starting from those who bet on green economy as an anti-crisis measure: since 2008 328,000 Italian industry and service companies (22% of the total) invested in green technologies to reduce environmental impacts and save energy, improving their competitiveness: 42% of manufacturing firms that makes eco-investments exports its products, compared with 25.4% of those that does not make eco-investments; 30.4% implemented product or service innovations, compared to 16.8% of companies not eco-investing. They helped to improve the environmental – and then economic – performance of our country: for every million Euros produced by our economy we emit into the atmosphere 104 tons of CO2, Spain 110, the UK 130, Germany 143. We became more efficient in waste management: with 41 tons per million Euros produced we leave also Germany behind (65 t). The Italian production system is also leading the “green reconversion” of European occupation: according to the Eurobarometer survey of the EU Commission, by the end of 2014 51% of Italian SMEs will have at least one “green job”, a proportion higher than the

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European average (39%) and well above that of the United Kingdom (37%), France (32%) and Germany (29%). [POINT 4]. Italian GDP is not increasing for reasons that clearly have nothing to do with globalization and the competitiveness of our enterprises. While a dogmatic interpretation of austerity in Italy and Europe was responsible for the collapse of our domestic market, and consequentely also of our GDP: the domestic turnover of Italian manifacturing industry has lost 15.9% points compared to 2008, while Germany has lost only 0.3% points and France has gained 4.6% points. On the contrary, Italian companies provided excellent turnover for industrial activities on international markets, leaving behind even Germany: +16.5% compared to +11.6% [POINT 6]. The performances of other countries are not exclusively the result of their ability to compete: the public interventions of governments and central banks, which have supported the economy by increasing the debt, played a decisive role. [POINT 7]. The growth of emerging countries and the increase in the number of people who access material wellbeing outline enormous potential for the future of our country. An indicator of this growing interest towards Italy may be the results of tourist sector: Italy turns out to be the first Eurozone’s country by number of tourists from outside the EU (with 54 million overnight stays) [POINT 5]. Italy is the favourite destination for visitors from China, Brazil, Japan, Australia, USA and Canada. On the very controversial theme of public finances, despite our not insignificant inefficiencies, our country played an important role as well: since 1996 Italy has produced the highest state cumulative primary surplus in the history, leaving behind, with our current 591 billion euros, the virtuous Germany by 220 billion euros [POINT 10]. We are not the weakest link in Europe: the weight of our public debt on the total of the Eurozone’s public debt has fallen in 20 years from 28.7% in 1995 to 22.1% in 2013 [POINT 8]. And if we analyse the public debt and the aggregate debt as a whole (State, businesses, families) then it is clear that, despite the crisis and the austerity measures have not been painless even for families, the judgment on our country should be reviewed: Japan (412% of GDP), Spain (305%), United Kingdom (284%) and the U.S. (264%) did worse than Italy (261%) [POINT 9]. All this is not enough, of course. But in these figures there is more than a reply to many false platitudes. There is an indication of a route, an idea of the future for our country and for Europe. The great transition – economic, environmental, social – that the planet is going through is calling, calls Italy and Europe on a challenge. To choose between being pursuers in trouble or drivers of the change. Europe, and Italy in particular, are the forge of experience that can become the vanguard of a new development model, made of rights and innovation, that unfolds in traditional sectors which use less resources and more knowledge, who chooses environmental issues and green economy as drivers of change – making, for example, interventions to mitigate the effects of climate change an extraordinary opportunity to innovate its production system. If this is the way, Italy, as we have seen, is a step forward to others. And can turn the advantage gained on the ground from its enterprises in leadership in Europe. As long as it meets its vocation to produce beauty and quality, recognizes its abilities and supports them, fosters its national capital, nourishes the know-how and the tailoring of its industries through research and new technologies. It is not an easy challenge, nor granted: but to do this, Italy simply shall act as Italy. Ferruccio Dardanello, Unioncamere Marco Fortis, Fondazione Edison Ermete Realacci, Fondazione Symbola

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MANUFACTURING TRADE SURPLUS, 2012, $ BILLION

ITALY IS ENLISTED AMONG THE ONLY FIVE COUNTRIES IN THE WORLD TO HAVE A MANUFACTURING TRADE SURPLUS OF MORE THAN 100 BILLION DOLLARS. The leading role of our country in world industry is confirmed by a foreign manufacturing trade surplus of $ 113 billion in 2012. The same can not be said of other countries such as France (-34 bn), United Kingdom (-99 bn), USA (-610 bn).

SOURCE 10 TRUTHS ABOUT ITALIAN COMPETITIVENESS FONDAZIONE SYMBOLA – UNIONCAMERE ¬– FONDAZIONE EDISON (ON DATA FROM WTO)

PRODUCTS

235

323 PRODUCTS

PRODUCTS

NUMBER OF PRODUCTS (ON A TOTAL OF 5,117) IN WHICH ITALY HOLDS THE TOP SPOTS IN THE WORLD FOR TRADE SURPLUS (2012) (FORTIS-CORRADINI INDEX – FONDAZIONE EDISON ©)

ITALIAN COMPANIES ARE AMONG THE MOST COMPETITIVE IN THE WORLD. On a total of 5,117 products – the highest level of statistical breakdown of world trade – in 2012 Italy was first, second or third in the world for trade surplus in 935 products (Fortis-Corradini index – Fondazione Edison ©).

SOURCE 10 TRUTHS ABOUT ITALIAN COMPETITIVENESS FONDAZIONE SYMBOLA – UNIONCAMERE ¬– FONDAZIONE EDISON (ON DATA FROM ISTAT, EUROSTAT, UN COMTRADE)

1999

94%

71%

67%

61%

55%

2012

WORLD’S EXPORTATION SHARES OF MANUFACTURING PRODUCTS, 2012 VS 1999

ITALY IS ONE OF THE DEVELOPED COUNTRIES THAT IN GLOBALIZATION MAINTAINED MORE WORLD’S MARKET SHARES. Italy maintained 71% of world’s exportation shares of manufacturing products compared to 1999 (2012 data), before countries such as China changed completely the global trade. Such performance is not comparable to Germany (94%), but better than Japan (67%), France (61%), United Kingdom (55%).

SOURCE 10 TRUTHS ABOUT ITALIAN COMPETITIVENESS FONDAZIONE SYMBOLA – UNIONCAMERE ¬– FONDAZIONE EDISON (ON DATA FROM WTO)

104

130 143 110

10 TONS OF WASTE

TONS OF CO2 AND WASTE PER MILLION EUROS PRODUCED

THE ITALIAN PRODUCTION MODEL IS AMONG THE MOST INNOVATIVE IN THE ENVIRONMENTAL FIELD. Italy is among the most eco-efficient EU-countries in production system, with 104 tons of CO2 for every million Euros produced (Germany emits into the atmosphere 143 tons, United Kingdom 130) and 41 tons of waste (65 Germany and United Kingdom, 93 France). We are also European champions in the recycling industry: starting with an industrial recovery of 163 million tons of waste on a European scale, in our country have been recovered 24.1 million tons, the highest value among all European countries (Germany 22.4 million tons). The Italian production system is also leading the “green reconversion” of European occupation: by the end of 2014, 51% of Italian SMEs will have at least one “green job”, a proportion higher than that of the United Kingdom (37%) of France (32%) and Germany (29%).

SOURCE 10 TRUTHS ABOUT ITALIAN COMPETITIVENESS FONDAZIONE SYMBOLA – UNIONCAMERE ¬– FONDAZIONE EDISON (ON DATA FROM GREENITALY 2013)

million overnight stays

OVERNIGHT STAYS IN EUROZONE OF NON-EUROPEAN TOURISTS (2012)

ITALY IS THE FAVOURITE EUROZONE’S DESTINATION FOR NON-EUROPEAN TOURISTS. Italy is the first Eurozone’s country by number of overnight stays of nonEuropean tourists, with 54 million overnight stays in 2012 (+14 millions compared to Spain). We are the first European country by number of overnight stays of tourists from China (2.5 m), Japan (2.8 m), South Korea (680,000), Brazil (1.8 m), Australia (2.2 m), USA (11 m) and Canada (2 m).

SOURCE 10 TRUTHS ABOUT ITALIAN COMPETITIVENESS FONDAZIONE SYMBOLA – UNIONCAMERE ¬– FONDAZIONE EDISON (ON DATA FROM EUROSTAT)

DOMESTIC TURNOVER

FOREIGN TURNOVER

-15,9%

+16,5%

-0,3%

+4,6%

+11,6%

+5,9%

PERFORMANCE OF MANUFACTURING TURNOVER (2012 = 100) DOMESTIC MARKET: OCTOBER 2008 VS NOVEMBER 2013 FOREIGN MARKET: NOVEMBER 2008 VS OCTOBER 2013

ITALIAN GDP IS NOT INCREASING FOR THE COLLAPSE OF OUR DOMESTIC DEMAND, FOR REASONS THAT CLEARLY HAVE NOTHING TO DO WITH THE COMPETITIVENESS OF OUR ENTERPRISES. By the failure of Lehman Brothers (beginning of the global economic crisis) to November 2013, the Italian manufacturing turnover for the domestic market collapsed (-15.9%) compared to what happened in France and Germany (+4.6%, -0.3% respectively). On foreign market, however, the Italian turnover grew (+16.5%) more than in Germany (+11.6%) and France (+5.9%).

SOURCE 10 TRUTHS ABOUT ITALIAN COMPETITIVENESS FONDAZIONE SYMBOLA – UNIONCAMERE ¬– FONDAZIONE EDISON (ON DATA FROM EUROSTAT)

+93% +24%

+81% +141% +61% +147%

2012 VS 1995 AGGREGATE DEBT INCREASE, GDP PERCENTAGE

THE ECONOMIC GROWTH OF OTHER COUNTRIES IS NOT EXCLUSIVELY THE RESULT OF THEIR ABILITY TO COMPETE, BUT IS ALSO DUE TO AN INCREASE IN THE DEBT. The economies of other countries are supported by an increase in the debt, both public and private, much higher than in Italy: since 1995, in Italy the aggregate debt (the public debt plus the companies’ and families’ debt) increased by an amount equal to 61% of GDP, in Spain as much as 141%, in the UK 93%, in France 81%.

SOURCE 10 TRUTHS ABOUT ITALIAN COMPETITIVENESS FONDAZIONE SYMBOLA – UNIONCAMERE ¬– FONDAZIONE EDISON (ON DATA FROM EUROSTAT)

1995 28,7%

2007 26,8%

2013 22,1%

ITALY’S SHARE OF EUROZONE’S PUBLIC DEBT

SINCE THE EARLY 90’S TO THE PRESENT ITALY’S ‘MARKET SHARE’ IN THE TOTAL EUROZONE’S PUBLIC DEBT HAS STEADILY DECREASED. We are not the weakest link in Europe: the Italian responsibility in the total Eurozone’s public debt has significantly decreased from the 90’s (28.7% in 1995) to the present (22.1% in 2013).

SOURCE 10 TRUTHS ABOUT ITALIAN COMPETITIVENESS FONDAZIONE SYMBOLA – UNIONCAMERE ¬– FONDAZIONE EDISON (ON DATA FROM EUROPEAN COMMISSION)

% %

AGGREGATE DEBT, GDP % 2012 DATA FOR PRIVATE DEBT, 2013 DATA FOR PUBLIC DEBT

CONSIDERING THE AGGREGATE DEBT (STATE, FAMILIES, BUSINESSES) ITALY IS ONE OF THE WORLD LEAST INDEBTED COUNTRIES. If we do not analyse the heavy public debt, but the debt situation of the country as a whole (therefore the public debt along with the private debt), Italy – despite the crisis is eroding the large private wealth of Italian people – is more virtuous (with 261% of GDP) than USA (264%), United Kingdom (284%), Spain (305%), Japan (412%).

SOURCE 10 TRUTHS ABOUT ITALIAN COMPETITIVENESS FONDAZIONE SYMBOLA – UNIONCAMERE ¬– FONDAZIONE EDISON (ON DATA FROM BANCA D’ITALIA)

FRA

-311 € bn

SPA

-192 € bn

ITA

591 € bn

GER

371

-364 £ bn

€ bn

CUMULATIVE GOVERNMENT PRIMARY SURPLUS, 1996 - 2013

BY 1996 TO 2013 ITALY PRODUCED THE HIGHEST GOVERNMENT STATE CUMULATIVE PRIMARY SURPLUS IN MODERN HISTORY. We are talking about EUR 591 billion, 220 more than Germany (371 € bn). Not to mention the deficit of Spain (-192 € bn) France (-311 € bn) and United Kingdom (-364 £ bn).

SOURCE 10 TRUTHS ABOUT ITALIAN COMPETITIVENESS FONDAZIONE SYMBOLA – UNIONCAMERE ¬– FONDAZIONE EDISON (ON DATA FROM EUROPEAN COMMISSION)

GRAPHIC DESIGN