Opportunities offered by the Trentino area

Because of its high level of taxation, its administrative complexity, its often inextricable bureaucracy, the limited competition and the relatively high costs resulting from all of the aforementioned, Italy has not had success in recent years in attracting foreign direct investment (FDI), compared to other EU countries.

The following table shows some comparative data:

FDI Stock
/GDP
FDI Inflow
/GFCF*
Italy 18.5% 6.8%
France 31.9% 8.2%
Germany 33.4% 4.7%
Austria 44.0% 4.6%
Spain 44.5% 3.8%
United Kingdom 51.1% 8.0%
the Netherlands 95.8% 48.9%
Switzerland 125.3% 43.6%
2015 data; source: santendertrade.com  
* Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets 

The most important figure is that of the total foreign investment stock, which – in relation to GDP – in Italy is about half or less of that of the main “competing” countries in the European Union.

Investing in Italy?

In this picture, the idea of proposing a foreign investor to enter Italy could sound crazy. There are actually two specific types of investment that may be recommended.

The first is the investment needed to enter the Italian market with ones products, namely the establishment of branches, sales organizations, logistic centers and all that is needed to enter a market (in some cases even a local production facility).

The second is the creation of a technology subsidiary for research and development. This opportunity stems from the lack of growth of the Italian economy, which leaves many valuable resources without opportunities, including many young people with a good quality of technical or scientific training.

youth unemploymt.* lab cost per hour worked**
Italy 35.2%  € 27.40
France 23.6%  € 35.20
Germany 6.6%  € 31.80
Austria 10.7%  € 31.70
Spain 41.5%  € 21.00
United Kingdom 12.1%  € 22.20
the Netherlands 9.7%  € 33.50
* feb 2017 data. Source: statista.com  
** 2014 data. Source: statista.com  

As shown in the table, not only is there a good amount of resources available, but the cost of labor, although not being among the lowest in Europe, is lower than that of many reference countries.

Why in Trentino?

The autonomous province of Trento through its company Trentinosviluppo has been in operation for several years to attract investment by companies that intend to put in Trentino their technological development centers.

Trentino is a province / region of about half a million inhabitants, with a GDP per capita of 33.6 K € p.a., an unemployment of 6.9% and a good ability to attract human (and other) resources from other Italian regions.

Here is a list of the most attractive items for businesses in reverse order of importance:

  • The geographical location: Trentino is a connecting corridor between Italy, Austria and Germany. It is easily and quickly accessible from the North-Italian metropolitan areas and from Munich.
  • Culture and leisure: situated between the Dolomites and Lake Garda and with several national parks, the region offers plenty of entertainment and sports activities. But you should not underestimate the cultural opportunities offered, ranging from the Trento economy festival to the MART museum in Rovereto.

  • Relationships with public administration: autonomy of the province leaves room for management by the local administration, which is very much in favor of business. To begin with, Trentino’s public debt enjoys a rating of “A” by Fitch. Moreover, the level of corporate taxation is kept as low as possible, compatible with national standards and also for companies interested in investing, the autonomous province offers a one-stop-shop.
  • The strategic support of mechatronics and energy & environment: Trentinosviluppo S.p.A. Is the company owned by the Autonomous Province that provides offices and workshops, business services, patents, and start-ups to companies involved.
  • The availability of human resources: the autonomous province cares much for the training of technicians, engineers and researchers. There are higher technical schools co-localized in the same area dedicated to mechatronics laboratories. The University of Trento is the first for quality among the mid-sized Italian universities. Two research centers (Kessler Foundation and Mach Foundation) are involved in research in the fields of technology, science and agriculture.

If you are interested in getting more information, please contact me without hesitation.

Author: Michele Schweinöster

International manager with deep understanding of consumer durable goods and of machinery, functionally expert in the areas of service, logistics and sales.

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