When your thoughts turn to Italy, which products, services, and industries immediately come to mind? “You probably think of food, fast cars, fashion, wine, design, tourism—and all of that is good,” says Michele Scannavini, president of the Italian Trade Agency (ITA), which promotes the internationalization of Italian companies. But now Italy’s leaders want the world to recognize their country’s 21st-century strengths in advanced manufacturing, machinery, robotics, and related areas as well.
“Italy is going through a very important and radical transformation from traditional manufacturing to advanced, flexible manufacturing,” says Scannavini, who joined the ITA in June 2016 after working in Italy’s private sector for more than 30 years. At first glance, that transition might seem especially daunting given that Italian industry consists primarily of small and midsize enterprises (SMEs), he says. Often family-owned, these SMEs simply can’t match the financial resources of giant global enterprises based in Germany, the United States, and elsewhere.
In reality, though, modest size provides competitive advantage for Italian companies, Scannavini continues: “They are nimble and flexible and very fast to adopt new technologies.” In fact, he notes, what some might consider “the technologies of tomorrow” are already widely used in Italy: “Today, 40 percent of Italian manufacturing companies use 3-D printers for fast prototyping, and 25 percent use robotics in the manufacturing process.”
All those factors are adding up to burnish Italy’s profile as a global leader in manufacturing and related industries, as illustrated by a few key statistics.
- Europe’s second-largest manufacturing economy, and home to some of the region’s most environmentally efficient manufacturing systems.
- Europe’s third-largest exporter of flexible manufacturing technologies, including robotics, with $9.6 billion in Italian exports to the United States alone.
- Among just five countries worldwide with a manufacturing trade surplus exceeding $100 billion.
But that’s just the beginning.
Masters of Machinery
Italy is also among the world leaders in industrial machinery. It ranks second worldwide in global competitiveness in that industry and is among the world’s top three producers of machined parts. More than 4,600 companies are producing machinery and related products in Italy today, employing nearly 180,000 people. That’s a significant chunk of the workforce in a country with a population of just under 60 million.
More than 70 percent of Italian-made machinery is exported to other markets worldwide, says Alberto Maria Sacchi, a board member and past president of Federmacchine, the federation of associations representing Italian machinery manufacturers. And that percentage is likely to keep increasing: Overall exports of Italian-made machinery increased by 17 percent in the past year alone.
Much of that output heads to the United States. Machinery accounts for fully 25 percent of all Italian exports to the United States each year. More than 500 Italian machinery companies conduct business with U.S. organizations such as Ford, Boeing, and NASA, to name just a few partners.
All those achievements resulted from “an industrial model based on networks of small and midsize enterprises working together swiftly with strong, lasting connections in the supply chain and with end users,” Sacchi says.
A Future Based on Collaboration
In September 2016, the Italian Ministry of Economic Development launched its Industrial National Plan 4.0—“Industry 4.0,” for short—which Scannavini describes as supporting “the digitization of the Italian economy.” The long-term strategic plan is designed to generate billions of dollars for technology research and innovation through tax breaks, venture-capital support for startups, and other public and private sources.
The plan also includes a strong educational component. The Italian government plans to create four or five centers of competence at top Italian universities in Milan, Pisa, and other locations. Collectively, those centers will shoot for some ambitious 10-year targets: training 200,000 students and 3,000 managers, and awarding 1,400 PhDs “on topics related to innovation, high technology, and the industry of the future,” Scannavini says.
At the same time, Italy’s leaders emphasize that their nation’s future depends on collaborating with companies, agencies, and universities from beyond their own borders, including those in the United States.
Two recent examples came March 2016. First was the ITA’s i3 Forum on advanced manufacturing, in which Italian officials repeatedly emphasized the importance of Italian-U.S. partnerships and trade. Additionally, as part of a long-term partnership with the Italian government, IBM announced plans to launch its first Watson Health European Center of Excellence in Milan. (The site is near the planned Human Technopole Italy 2040 campus, which Italian authorities expect will eventually house up to 1,500 researchers working in areas such as genomics, big data, aging, and nutrition.
IBM’s center will bring together data scientists, engineers, researchers, and designers—all specialists in Watson Health, which brings the advanced cognitive-computing capability of IBM’s Watson to the analysis of health-care data. “The center will be responsible for developing new diagnostic systems, new therapeutic solutions, and personalized medicine,” Scannavini says.
IBM, which pledged to invest up to $150 million in the new center over the next several years, says company leaders envision the center becoming the hub of “a pan-European ecosystem for health-care reform, research, and health-tech startup”—in other words, another source for collaboration.
IBM calls Italy a natural location for Watson Health’s first European center of excellence due to the nation’s “commitment to health and wellness.” That doesn’t surprise Scannavini, who notes that Italy boasts one of the highest levels of life expectancy (second only to Japan), low infant-mortality rates, and one of the world’s top health-care systems—all according to the World Health Agency (WHO).
Another example: In June 2016, Lamborghini launched the Advanced Composite Structures Laboratory (ACSL) in Seattle to conduct research on improving the strong, lightweight carbon-fiber-component materials used in the company’s high-end sports cars. While the Pacific Northwest is half a world away from the Italian automaker’s headquarters in Sant’Agata Bolognese, Seattle was a strategic choice for the lab because of Lamborghini’s ongoing collaboration with Boeing, which also uses carbon fiber in its aircraft and aerospace products.
The Italian Trade Agency plans to support additional collaborations between Italian and American research organizations. It also plans road shows in several American cities, including Boston, Detroit, Houston, Los Angeles, and New York this year and next; those session will feature discussions focusing on advanced manufacturing, aerospace, biotechnology, and startup opportunities.
On Italy's Horizon
While taking pride in their country’s successes in the technology, manufacturing, and machinery industries, Italian business leaders are also seeking untapped opportunities in other fields.
One of Scannavini’s top priorities is increasing Italy’s presence in the digital universe. There’s plenty of room for growth in that area. “We’re almost starting from scratch, unfortunately,” he said in a November 2016 interview with ItalyEurope24, a digital business publication. In that Q&A, Scannavini noted that only about 10 percent of Italian companies sell goods or services online, and only 25 percent use the Web for purchasing. “We absolutely have to catch up,” he concluded.
Meanwhile, he and other Italian business leaders reiterate that competitive advantage, both today and in the future, will almost certainly go to the companies most skilled at forging strong partnerships—regardless of which industries they’re in. Scannavini sums it up this way: “Through collaboration comes innovation.”
For more information, including a searchable directory of more than 55,000 Italian manufacturers and suppliers, please visit the Italian Trade Agency website. For information on Italian machinery manufacturers, please visit the Federmacchine website.