Italy-Lombardy - Industrial scenario

Italy and Lombardy in figures

Research Unit ‐ Internationalization and Business Development Unit, updated apr. 2015

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ASSOLOMBARDA is …

…. the largest local entrepreneurial Association in Italy,representing almost 5,000 member companies located in the areaof Milan (including the territory of Milan, Lodi and Monza Brianza),employing approximately 280,000 workers locally and severalhundred thousands in the whole country.

…. the most important association within the Confindustriasystem. Confindustria is the national entrepreneurial federation.

Firms of all dimensions and belonging to all industrial sectors,producing services, goods or both are eligible to become membersof Assolombarda.

Assolombarda membership is voluntary.

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Our Mission

The mission is to foster the development of local industryby promoting solidarity and cooperation among member firms andby protecting their interests regarding industrial, social, economicor cultural matters.

Assolombarda protects and represents the enterprises' interestsin dealing with the political world, with social and politicalorganizations and with local authorities as well as with tradeunions.

Assolombarda also provides its associated firms with a greatvariety of services to support them in managing the businessfunctions/issues.

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Identity ‐ Representation ‐ Services

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Our member companies are located in the area of Milan, Lodi and Monza Brianza

Lombardy

Milan

Assolombarda area of activity

Our territory

Our range of services

but …

Since the beginning, relations with trade unions have always been our core activity ….

in the last 10‐15 years we have started offering support and services to substainmember companies’ competitiveness and help them facing daily business life

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UnionRelationships

Tax services

Green Economy

Educationand Training

Safety

ICT/Innovation

Social welfareFinance and

credit

Internationalizationand trade

Enterprise culture & CSR

Energy

Nr employees Total %companies employees % companies % employees

0‐10 1,869 7,431 39% 3%

11‐25 1,096 18,352 23% 7%

26‐50 746 26,999 16% 10%

51‐100 503 35,476 10% 13%

101‐250 370 57,712 8% 20%

251‐500 124 41,146 3% 14%

More than 500 68 91,619 1% 33%

Total 4,776 278,735 100% 100% 7

62% of Assolombarda members have less than 25 employees

Our members ‐ 1

from 26 to 100 employees 1,249 (26%)

up to 25 employees 2,965 (62%)

over 251 employees192 (4%)

From 101 to 250 employees370 (8%)

Member companies ‐ Division by size

Member companies ‐ Division by sectors

Sectors Companies Employees

Mechanical engineering* 1,423 67,223

ICT and Service sector * 1,042 62,353

Chemical industry and Construction materials* 610 44,360

Media, Communication and Entertainment 312 14,409

Fashion, Design and Furniture 218 8,172

Tourism 165 5,616

Transport industry* 158 17,009

Rubber and Plastic industry* 157 7,866

Agricoltural and Food industry 116 10,479

Energy industry* 94 14,421

Healthcare and Life sciences 82 16,210

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Our members ‐ 2

*They include companies related to the oil and gas supply chain as well as new energies and environmental protection

Promoted by Assolombarda together with a group of companies active in thegreen economy sector, the Green Economy Network was established in June2011.With the aim of encouraging new alliances between companies providingproducts, technologies and services for environmental and energysustainability.

The Network is aninstrument to acquirenational and global marketvisibility, to find newpartners and to dobusiness, to take part intender and call for bids.

Green Economy Network

Enterprises25000

Employees50 Bn €

Enterprises9

Each company can choose to be listed in one or more of the followingsupply chains or thematic areas.

The on‐line Repertory is a precise showcase of the companies, based on thethematic sphere of competency which enhances their visibility andfacilitates partnerships.

www.greeneconomynetwork.it

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Summary

1. Italy and Lombardy: perception and reality

2. Lombardy’s Business structure

3. Lombardy’s strengths

Italy and Lombardy: perception and reality

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(*) Financial assets held by households include: currency and deposits, securities other than shares, loans, shares and other equity, net equity of households in life insurance reserves, net equity of households in pension funds, prepayments of premiums and reserves against outstanding claims

132.1

0255075100125150175200

NET GER AUT FRA SPA BEL IRE POR ITA GRE

Public debt as a percentage of GDP2014

70

0

50

100

150

200

250

NET BEL FRA GER AUT ITA SPA POR IRE GRE

Public debt as a percentage of Household net financial assets (*)

2013

13


Italian public debt: two different points of view

Source: Eurostat

90%

Source: Eurostat data processed by Assolombarda 14

Italian primary surplus: the highest cumulated value


Italy does not appear to face a risk of fiscal stress in the short‐term (S0 = 0.28).Sustainability risks appear to be medium in the medium run (S1 = 1.1), while becoming extremely low in a long‐term perspective (S2 = ‐2.1). However, the implementation of the budgetary measures and the adoption of structural reforms are essential to anchor market confidence and boost growth and jobs.

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Italian public debt in the long‐term: the highest fiscal sustainability

Source: Public Finance in EMU 2013 (European Commission)


S2 is a sustainability indicator based on forecasts for growth and fiscal balances, extrapolated by incorporating the projected trend in age‐related expenditure.

The EU Sustainability Ranking is a sustainability indicator based the long‐term perspectives of the public budget of EU Member States. Implicit debt essentially results from future legally‐binding obligations such as pension benefits and health care services. 16

Italian explicit and implicit debt: one of the highest sustainability

Source: European Commission, Eurostat, Calculations: Reserach Centre for Generational Contracts


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Italian manufacturing export performance2000‐2014 (billions of euro)

Source: Istat data processed by Assolombarda

Export record level


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Lombardy’s Business structure

Lombardy Italy shareArea (Square Km) 23,863 302,072 7.9%

Population (1/1/2014) 9,973,397 60,782,668 16.4%

Employees (thousands, 2013) 4,647 24,420 19.1%

GDP (nominal, mln euro, 2014) 345,755 1,541,937 22.4%

Value Added per capita (2014) 31,288 22,929 ‐

Enterprises (2013) 814,297 5,186,124 15.7%

R&D expenditure (mln euro, 2011) 4,456 19,810 22.5%

Import (mln euro, 2014) 110,248 361,002 30.5%

Export (mln euro, 2014) 108,096 390,233 27.7%

Source: Conti economici territoriali Istat and Annuario statistico regionale Istat 2014

0

10000

20000

30000

40000

50000

Milan Lombardy Italy

44,839

31,28822,929

VA per capita

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2. Lombardy’s business structure

The first Italian Region: in 2014, 22% of the Italian GDP

Rest of Italy78%

Milan10%

Gross Domestic Product

Lombardy22%

Manufacturing; 26,3% Information and communication ; 3,9%

Real estate activities; 2,0%

Professional, scientific and technical activities; 8,0%

Financial and insurance activities; 4,2%

Trade; 18,4%

Other; 37,1%

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Lombardy vs. others: the first Region in terms of manufacturing gross value added

Source: Eurostat

76

5144 41 41 36 35 32 30

0

20

40

60

80

Gross value added at basic prices,by region (Nuts2)

Industry (except construction) ‐ 2011billion of euros

Source: Istat, 2012

Workers in Lombardyby business sector

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Medium Sized Enterprises (MSE) and MNC in Lombardy

1,136

665523

336208151113 99 81 73 61 61 60 58 41

0

200

400

600

800

1000

1200 Medium sized enterprisesper region

Source: Mediobanca‐Unioncamere, 2013

• most of the Italian medium sized enterprises(*) are concentrated in Lombardy and among them the “pocket‐sized multinational companies” are strongly export‐oriented.(*) independent companies with 50‐499 employees AND 15‐330 million € annual turnover

• over 4,000 foreign invested enterprises are present in Lombardy, nearly 50% of those present in Italy.

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Clusters vs. supply chains

Metalwork and Metal productionTextileFootwear and clothing industriesFurniture and WoodBiotech and Green BiotechDesign and FashionICTMaterialsRenewable energies

Due to its well‐balanced and multi sectorial business structure, Milan has not developed the typical cluster features.

Indeed, the rich and highly product‐differentiated banlieu and the widespreadtransportation network have allowed Milan to become a realmetropolitan hub.

35.837.

0

10

20

30

40

50

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Export Milan (2003‐2014)(billions of euro)

World

EU‐28

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2. Lombardy‘s business structure

Export: main commercial partners

Source: Istat data processed by Assolombarda

22,6

15,045%

55%40%

60%

Repositioning on Extra‐UE markets:the case of Milan

Millions of euro

% change 2014-20081 Germany 14,529 1.7%2 France 11,378 -6.6%3 USA 7,339 24.9%4 Swiss 6,693 33.8%5 Spain 5,300 -18.1%6 United Kingdom 5,193 9.9%7 China 3,302 37.5%8 Netherlands 3,026 15.3%9 Russia 2,810 -1.9%

10 Turkey 2,684 31.5%

Export 2014

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Lombardy’s strengths

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Research and Innovation: specialisation in knowledge‐intensive sectors

Source: BES 2014, Cnel, Istat and Eurostat

Italy Lombardy% of expenditure on R&S on GDP (2011) 1.25% 1.33%N° of patent application filed to the European Patent Office per million inhabitants (2010‐2009) 73.3 115.3% of employees with university education in scientific‐technological occupations on total employees (2013) 11.1% 11.4%% of companies (>10 emp.) which have introduced technological, organizational and marketing innovations in a three‐yearperiod (2010) 50.3% 54.0%

% of companies (>10 emp.) which have introduced innovations of product/service in a three‐year period (2010) 23.6% 28.4%% of people employed in technology and knowledge‐intensive sectors (2013) 3.4% 4.9%% of people aged 16‐74 who have used internet at least once (2013) 56.0% 61.4%

Source: Eurostat, 20133.7

3.8

4.1

4.6

4.9

France

Spain

Germany

United Kingdom

Lombardy

% of people employed in technology and knowledge‐intensive sectors (manufacturing and services)Lombardy vs. the most important European countries

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University: high concentration (13) and international attractiveness

Source: Assolombarda


Source: Miur (Lombardy and Milan) and OCSE

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The Politecnico of Milan is one of the most outstanding technical universities in Europe.

It is the largest school of architecture, design and engineering in Italy.

Thanks to a strong internationalization policy, many programs are taught entirely in English, attracting an ever increasing number of talented foreign students.

University: Politecnico of Milan, an example of excellence

Best European Universitiesin Engineering/Tecnology according to HR Recruiter Evaluation

Source: Politecnico di Milano, Qs Ranking, 2015

Rank Computer Science

MechanicalEngineering

ChemicalEngineering

ElectricalEngineering

CivilEngineering

1 Cambridge / Oxford Cambridge Cambridge Cambridge Oxford

2 Cambridge / Oxford Oxford Oxford Oxford Cambridge

3 LSE London Politecnico di Milano TU Delft ETH Zürich TU Delft

4 ETH Zürich Imperial College Imperial College

Politecnico di Milano

Politecnico di Milano

5 Imperial College RWTH Aachen Politecnico di

MilanoImperial College ETH Zürich

6 Politecnico di Milano ETH Zürich ETH Zürich TU Münich Imperial

College

7Lomonosov

Moscow State University

TU Delft RWTH Aachen Politecnico di Torino

The University of Edinburgh

Unemployment rate

Source: Istat, Eurostat

2014201320122011201020092008200720062005

Euro Area

Germany

Labour market: much better than Italy

Italy

Lombardy

2014201320122011201020092008200720062005

Activity rate

Euro AreaGermany

Italy

Lombardy


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11.2

9.17.7

4.1

9.6

5.3

7.77.7

5.0

8.2

11.512.7

73.8

69.9

62.5

68.4

77.7

72.3

76.3

71.370.7

69.463.9

62.3

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Labour market: high female participation

2014201320122011201020092008200720062005

Source: Istat, Eurostat

Euro AreaGermany

Italy

Lombardy

In Lombardy the female participation to labour market is almost 9% higher than in Italythanks to:

…more opportunities for women to reach relevant positions/roles in their firms…

…diffusion of part‐time contracts (25% among working women)…

…welfare initiatives both by large private companies and public institutions (78% ofmunicipalities provide services for children, such as kindergarten).

Female activity rate

66.9

61.858.4

50.5

70.4

64.4

60.051.1

72.9

66.763.1

54.4

5.7

3.7

11.9

7.9

7.5

6.7

2.7

10.2

8.2

8.1

0

5

10

15

20

25

Euro Area Germany Italy Lombardy Milan

Source: Eurostat, Istat, Formaper

% Young people (aged 15‐24)Not in Employment and not in any Education and Training

2014

NEET (1)NEET (2)

searching for a job

30

Labour market: NEET in line with the Euro Area

6.4

12.4

22.1

16.1 15.6

not searching for a job


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Why are Lombardy and Milan a knowledge hub?

Because here you find:• a multi‐sectorial economic system, with a core manufacturing sector

integrated with a highly developed service sector (especially in Milan);

• a virtuous network of small and medium enterprises well integrated with large enterprises and multinational companies;

• the concentration of 13 long‐standing and prestigious universities, strictly connected with the entrepreneurial system;

• a strong specialization in knowledge‐intensive sectors and the availability of high‐skilled human capital.

A knowledge hub3. Lombardy’s strengths

Milan is hosting EXPO 2015:

“Feeding the planet, energy for life”(May 1st ‐ October 31st)

Expo Milano 2015 is a unique opportunity for companies to:Showcase leadership, innovations and solutions in a global forumAttract the attention of institutions, governments and consumersBuild future strategic alliances and business opportunities

141 exhibitor countries

EXPO 20153. Lombardy’s strengths

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