Unioncamere, the body representing the Italian Chambers of Commerce, published a comprehensive report on the past and future of Italian medium businesses. The report, complied with the help of Mediobanca, painted a very flattering picture of the sector: a 19 per cent increase in turnover in 2021 and a 2022 forecast showing even more potential for growth (+6.3%).

Italian manufacturing companies will weather one of history’s most critical junctures riding a historical upward trend. Since 1996, the only significant dip, relative to big businesses, in performance coincided with the 2008 financial crisis, and they, nonetheless, still outperformed them. It could be argued that data shows an almost ontological superiority of the Italian medium business model over its biggest counterparts. They more than doubled turnover growth (+108.8% vs. +64.4%), attained a greater increase in productivity (+53% vs. +38.6%) and ensured better wages (+62.4% vs. +57%). They are not just more competitive than other Italian companies. They also easily overtook French and German businesses in productivity, logging a 21.5 per cent better performance on this parameter in which Italy is historically lagging.

Italian medium businesses are deeply rooted in their home country but are incredibly open to international partnerships and markets. Foreign suppliers and export play a noteworthy part in this eco-system accounting for 25% of supplies and 43.2% of turnover.

The report acknowledges that medium businesses, and the Italian economy as a whole, are facing a strategic technological shift. To address these challenges, the companies started investing in 4.0 tech in 2017, with 76% of them doing so in the last five years. Seven out of ten also showed commitment to their previous investments, signalling a willingness to continue this policy for the next five years.

To better understand what “investing in 4.0 tech” means, we can look at the breakdown of the technologies included under this umbrella term. Almost half of the medium businesses chose to invest in robotics, big data, simulation of the production process and cybersecurity; 3D printing, machine learning and IA are, albeit not as preeminently, also in the mix. 42% of companies identified the need for more flexibility in the production process as the undercurrent drive in this modernising effort. Green investments and more sustainable business practices are equally regarded as needed to increase competitiveness. This universe of 3174 change-leading companies is also ready to seize the growth opportunities arising from the NRRP: 59% of medium-sized companies have already taken action or are about to do so.

In the words of the President of Unioncamere, Andrea Prete, “Italian medium-sized industrial enterprises are the backbone of Italian family capitalism, as the last 25 years show. They can rightly be defined as the engine of our entrepreneurial system, representing a bastion of resilience and continuous modernisation of the economic system. This is due to an extraordinary capacity to invest in the dual Green and Digital transition, in which human resources represent the most important intangible asset”. He also added, “The analysis we have conducted together with Mediobanca therefore debunks, supported by data, several stereotypes on companies’ family governance, which when complemented by an adequate strategic and managerial project, embodies an archetype of undoubted success”.

“Over 25 years of better performance than the entire national economy, confirmed and improved throughout the crises of the last 15 years, allow our medium-sized manufacturing companies to face with confidence circumstances that remain uncertain and challenging,” said Gabriele Barbaresco, Director of the Mediobanca Research Area.

Italian medium businesses represent an invaluable asset for the entirety of Italy’s economy, and trends show that it is not only nostalgia talking. The relentless drive to improve displays an unwillingness to rest on its laurels. This attitude allowed them to outpace the growth of their national and foreign competitors. There is no reason to think that all of this will not also be true in the future: a reliable foundation is insurance against most if not all storms.

Source: Unioncamere
Featured image: via Unioncamere