Internationalisation opportunities for Italian companies:new markets for Made in Italy at the 12th Annual Forum of the Leonardo Committee

Entrepreneurs and government institutions discuss challenges and opportunities for Italian companies and export and investment potential offered by emerging economies. ICE-Prometeia study: differing markets in terms of stage of development offer various opportunities for our companies.

Rome, 4 July 2013 – The 12th Leonardo Committee Forum was held today in the Campidoglio. This annual meeting is dedicated to dialogue between government representatives, entrepreneurs and financers on the state of Made in Italy in the current difficult international economic situation, as well as growth prospects for Italian companies.

The Leonardo Committee, established in 1993 on the common initiative of Senator Sergio Pininfarina and Senator Gianni Agnelli, Confindustria, the Italian Trade Promotion Agency (ICE) and a group of entrepreneurs with the aim of promoting and establishing “Italian quality” around the world, currently associates over 150 outstanding members, including 114 companies whose total revenues last year amounted to around €300 billion, including 53% deriving from exports. If only manufacturing companies are taken into account, the portion of exports rises to 77%.

Participants at the Forum included the Minister of Foreign Affairs, Emma Bonino, the Minister of Economic Development, Flavio Zanonato, the Chair of the Leonardo Committee, Luisa Todini, the Vice-President of Confindustria, Diana Bracco, the President of the Italian Trade Promotion Agency (ICE), Riccardo M. Monti, the CEO of Intesa Sanpaolo, Enrico Tommaso Cucchiani, and the Chairman of ENI, Giuseppe Recchi. Participants at the entrepreneurial round table included Massimo Mucchetti, President of the Industry, Trade and Tourism Commission of the Senate of the Republic, Pietro Salini, the CEO of Salini Impregilo, Claudio Sposito, Chairman and CEO of Clessidra Sgr, and Salvatore Torrisi, Chairman and CEO of A.A.T. Oranfresh. This was followed by a testimony by Franco Moscetti, CEO of Amplifon.

During the meeting the study commissioned by the Leonardo Committee from the Strategic Planning, Research and Overseas Network Office of the Italian Trade Promotion Agency (ICE), in collaboration with Prometeia, was presented. Entitled New markets for Made in Italy in additon to BRICS countries, the study analyses internationalisation opportunities for Italian companies. The study identifies 25 emerging markets, which are very different from each other, that offer significant opportunities in various areas of specialisation. Italian companies are absent or barely known in many of these countries.

“While our economy continues to suffer from declining GDP, job losses and company closures – with the state failing to pay companies and companies failing to pay the state – bureaucracy is also holding up patronage!” said Luisa Todini, the Chair of the Leonardo Committee. “In other parts of the world hundreds of millions of people are anxious to achieve freedom and well-being. To get back on the path to growth and claw back market shares from overseas – in both the public and private domains – we need to leverage two of our great competitive advantages: our flair for manufacturing – top-quality products – and our cultural and environmental flair – quality-of-life services.”

“Italian export data confirm the vitality of Made in Italy and the capacity of our companies to stay competitive, despite the crisis, in markets throughout the world,” said Diana Bracco, Vice-President of Confindustria for Research and Innovation. “However, to keep on growing and hold our own at global level it’s increasingly important to offer innovative products and services that can meet new consumer requirements. This requires concentration on enabling technologies, collaboration between companies and public research organisations, and networking of skills, thus promoting technological platforms, clusters and aggregations regarding specific issues.”

The President of the Italian Trade Promotion Agency (ICE), Riccardo Monti, commented: “The study shows that, regarding the supply of both investment goods and consumer goods, Italy needs to step up its presence in markets outside the European Union. Sub-Saharan Africa, with an estimated 270 billion euro of investment required in 2020, the Far East and Latin America are regions where strong growth is expected, and we have excellent trump cards to play, thanks to a supply that meets local demand for machinery and technology as well as the demand for consumer goods from the new middle class. ICE has prepared new promotion programmes in these markets and is about to open new offices. Stepping up direct penetration of culturally and geographically distant markets will be a vital tool in expanding the distribution of Made in Italy products.”

The study, which analyses the improved growth prospects for Made in Italy investments and exports in emerging economies, taking into account several variables (stage of development, economic potential, demographic trends and per capita GDP, but also degree of risk, excise duties and distribution systems), outlines a map of future markets that varies in terms of companies’ specialisations.

For consumer goods, the most relevant variable taken into account is income threshold (estimated at $11,500 at purchasing power parity, or a little under €9,000), which triggers an upturn in purchases of such goods. For investment goods, the key driver is a country’s level of industrialisation, which gives a potential gauge of how much machinery will be required to support its industrial convergence with mature economies. Finally, regarding infrastructure works, the determining factors are the quality and amount of infrastructure already in place and forecast investment plans.

The countries with the highest growth potential for Made in Italy consumer goods are the United Arab Emirates, Chile and Malaysia, followed by Qatar and Saudi Arabia. Topping the ranking for the most attractive markets for investment goods are Saudi Arabia, Mexico, Indonesia, Thailand and Chile, while the countries that offer the best opportunities for Italian construction companies are the Asian markets of Indonesia, Pakistan, Vietnam and Thailand, followed by Mexico.

The study concludes that in order to grasp the opportunities available in these countries Italian companies need to concentrate on specific products and sectors within individual markets. The success of Made in Italy has traditionally stemmed from outstanding achievements, and have been able to take advantage of the common denominator of quality, and also acted as a driving force for other sectors.

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