Author: Michele Schweinöster

Actiss Italia, as part of its activities, supports companies in obtaining public aid for their investments. Here are some examples of national and regional grants to help foreign entrepreneurs entering Italy.

National grants

Development contracts: these contracts support large-scale investments in the industrial, tourism and environmental sectors, through the cumulative intervention of non-repayable grants and subsidized loans. The percentage of the contribution and of the funding is mainly due to the size of the company that proposes the project. The minimum total investment required is 20 million euros. For the processing and marketing of agricultural products, the minimum investment threshold is reduced to 7.5 million euros. Investment projects involving disadvantaged areas of the national territory are prioritized

Regional grants (examples)

The settlement contract (Piedmont region): this tool is aimed at encouraging new settlements or expansions of production plants, research centers and service centers by companies with foreign parent companies, which generate new qualified employment with the creation of at least 15 places working staff. Minimum investment required: 2 million euros.
Beneficiaries are large companies with foreign control who intend to invest in Piedmont generating a significant employment impact, also in collaboration with research organizations and / or SMEs. Large companies can be financed for initial investments, in terms of community legislation, only in the specific areas of the regional territory.

Digital investments (Emilia-Romagna region): The Emilia-Romagna region closed September 30th a call for grants, including large-scale grants, to promote investments in one of the following areas, and with the creation of new jobs

• Big Data for Business;
• Internet of Things;
• Artificial intelligence;
• Virtual and augmented reality

In order to increase the attraction for foreign companies, other calls are being prepared for the two-year period 2018/19.

For some time I have been working together with Actiss Italia. Actiss Partners is an originally French organization, that offers its customer companies concrete solutions to support them during phases of change and evolution.

The experience gained in years of multi-level responsibility, in different sectors and in international contexts, makes the achievement of positive results very likely. Operational resources are immediately available.

Here are some examples of Actiss’ interventions:

1. Temporary Management: This type of mission combines consulting activities with real operational management aimed at achieving the set goals. These projects include business development, internationalization, restructuring, but also support for launching new products, during a generational transition or when the company faces and overcomes a crisis situation.
2. Merger & Acquisition: ACTISS’s approach is particularly suitable for small and medium-sized businesses and their internationalization. The approach is based, on the one hand, on in-depth knowledge of its customers’ activities – which allows them to accompany them even after the acquisition / merger – and, on the other hand, direct contacts with investors to support the realization and financing of specific customer’s M & A targets.
3. Venture Development: This solution is aimed in particular at entrepreneurs, managing directors and / or shareholders who want to place their company on a path of strong growth and consider the opportunity of selling in the future. It also applies to smaller companies, since in such cases, ACTISS operates at a lower rate and takes a minority stake of the company’s equity.

You can find Actiss on www.actisspartners.com. And if you are interested in getting more information, contact me without hesitation.

EMO took place from 18 to 23 September in Hannover. This is the most important European-wide trade fair for machine tools. It is a biennial fair that takes place alternately in Germany and Italy, in those countries that are both the two major producers and the two main markets for machine tools in Europe.

Data on the Italian market

On this occasion data were published by UCIMU, the Italian association of machine tool makers, relevant both to production and to internal market.

This data not only confirms the exit from the decade’s economic crisis that took place but also provides an  optimistic outlook for the machinery market in the coming years.

The market grew by 18.6% from 2015 to 2016. This is the largest growth among the top eight countries in the world:

Production increased by 6.4% and, to meet the domestic demand, exports dropped by 4%.

The trend of production continues to increase and the utilization of production capacity has increased from 75% in the fourth quarter of 2015 to 83% in the second quarter of 2017.

Orders received by Italian producers in 2017 are 9.9% higher than in 2016, with a 5.6% increase in orders from overseas and 24.8% on domestic orders.

Interpretation of data and forecast

UCIMU, representing Italian builders in the government and in the political world, gives – indeed – great importance to the positive investment impact of a governmental initiative called “Industry 4.0”, which alleviates the tax burden for the companies that invest in automation.

This is certainly a factor, but I do not think it is the dominant one. Much has to do with the general situation of the world economy, but above all on an all-Italian phenomenon. Most metal working companies are in the hands of individuals or families. In the years of the crisis only the performing companies have resisted and continued to build up profits. In the general uncertainty situation, these were not used, but were set aside.

Once emerging from the crisis and with a market that requires more technological content from the pre-2008 years, industrial families have to invest, and also have the means to do so, often without having to draw on credit.

The growth of the Italian market will continue in the medium term, though not in double figures. Oxford Economics (consulted by UCIMU) estimates growth in the Italian market for 2017 to + 10.6% against +3.6% in Europe, +3.5% in the world and foresees a more moderate growth for the next two years.

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:

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.

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.

A project consists of a change to an organization, whether it means getting to a new market, launching a new product or replacing a computer system, it can be summarized as the complex set of coordinated actions which lead from a starting state “A” one arrival state “B”.

Defining the objectives

When planning a project, the timeline is defined and the cost is agreed upon. This will establish the framework in which to operate. Here are some examples: which product or product line to launch initially on a new sales channel, which geographical regions to prioritize in a new market, or even which functionality of a computer system to implement and which not.

These choices are made in order to maximize the benefits and the chances of success for the project, considering  that time and resources are limited. Possible enlargement of scope and benefits of the project (e.g.: product, geography, function, …) are left to further future actions (projects or day-to-day).
Adequate resources are allocated to the project, based on the targeted objectives. Then a project plan is developed and run.

The “scope creep”

Once a project starts, during its execution it is inevitable that people within the company structure see the opportunity of increasing the benefits or notice omissions in the initial scope of the project.
Requests will arise. These, if not properly managed, will lead to “scope creep”, i.e. the scope slowly grows in an unmanaged manner.

This is the biggest risk for the results of a project. If the project manager starts accepting such requests, it is very likely for the project to derail and to be transformed into a complication monster, not to be managed within the planned time and cost. In short, a disaster is in the making.

How to manage in such circumstances

1. The scope of the project must be well defined and shared with all stakeholders from the outset, during the preliminary analysis phase(s).
2. New requests, arising while the project is running, should be rejected by the project manager in all cases except those listed in point 3.
3. Requests from higher hierarchical levels in the organization and design changes that appear absolutely necessary for the success should be decided upon (along with any budget and timing changes) by the same people who assigned to the project the resources and approved the initial plan. Normally, this is the steering committee.

Summarizing

The first rule for the success of a project is that you do not change the purpose during project execution. This must be clear not only to the project manager but also to his/her boss(es) and to the other stakeholders.
This said, changes may take place, but only following the correct formal steps, reviewing the project budget based on changes and approving it at all necessary corporate levels.

An article published in a recent issue of the Economist explains how the myth of the “made in Italy” can often transform a formidable brand in a hand-brake for our exports of goods, services and ideas. Especially because behind that brand very often are hidden strong protectionist pressures.

My conclusion (and the Economist’s) is that growth can only take off if italians get more open to the external world’s needs and opportunities.

Links:

• il Post (italian)
• The Economist (paywall)