Urban Centres for Economic Renewal, Italy

About

Country: 
Italy
Sectors: 
Public sector
Target Groups: 
employers/purchasersgovernmentworkers/suppliers

 

The Urban Operational Centres for Economic Renewal (Centri Urbani Operativi per la Riqualificazione Economica, CUORE) project consists of a network of neighbourhood service centres for entrepreneurs and potential entrepreneurs. The primary objective is to develop a friendly relationship between the state and informal entrepreneurs, with the government offering help but expecting something in return.

 

Background

With a population of about one million people, Naples – in the region of Campania – is the largest city in southern Italy. In 2002, irregular or undeclared work amounted to 25.1% of total employment in the municipality. The city suffers from widespread crime, a lack of ‘social capital’ or civic network of trust and participation, and a problematic relationship with the local government. At the same time, there is also evidence of an unexploited local economic infrastructure, marginalised entrepreneurs and workers that violate labour rules.

The Urban Operational Centres for Economic Renewal (Centri Urbani Operativi per la Riqualificazione Economica, CUORE) project is led – in partnership – by the Urban/Eco Department of the University of Naples ‘Federico II’ and the Labour Office of the Municipality of Naples. The Italian word ‘cuore’ means heart, courage and passion. The project started in 1999 and consists of a network of neighbourhood service centres for entrepreneurs and potential entrepreneurs. A total of four CUORE centres operate in four areas of the municipality of Naples – north, northeast, south and central.

The core project group consists of eight officers (two for each centre), two senior officers and two analytical coordinators: Luca Meldolesi and Liliana Bàculo. The target groups include workers, employers, unemployed persons and the government.

Objectives

The primary objective is to develop a friendly relationship between the state and informal entrepreneurs, with the government offering help but expecting something in return.

In order to achieve that objective, it has been necessary to:

  • identify the actual number of businesses, updating official data where necessary;
  • determine the potential, the strengths and the weaknesses of the current economic situation in the community;
  • inform local authorities about the variety and complexity of current economic activities;
  • monitor the economic reality in the community;
  • form a group of officials to follow the example set by two female officers who previously worked in another community initiative in two deprived areas of Naples (Urban-Napoli);
  • periodically evaluate – together with the analytical coordinators – the work that the CUORE officials have accomplished, in order to discuss further initiatives;
  • encourage companies to work in compliance with regulations and fiscal law by offering consultancy on procedures for regularisation – for example, how to register a business with the Chamber of Commerce and the Social Insurance Office, how to request a value-added tax (VAT) number, and how to obtain a public health permit if needed;
  • foster dialogue between business and the local government;
  • sustain new companies by informing those involved and the local population of new incentives.

Specific measures

The project has involved the following measures:

  • disseminating information through direct contact with entrepreneurs and craftspersons about incentives available;
  • identifying the most appropriate incentives;
  • establishing centres offering free consultancy and applying current regulations as a basis for formalising work arrangements;
  • agreeing on conventions with national development agencies in order to guarantee a level of professionalism that is otherwise hard to achieve;
  • organising the participation of companies at trade fairs;
  • promoting cooperation among entrepreneurs for product marketing, exporting and technology transfer.

Evaluation and outcome

In 2004, the United Nations Human Settlements Programme UN-HABITAT and Dubai Municipality selected the CUORE project as an example of good practice.

Achievement of objectives

Initial results were derived from field research, which was repeated eight times in order to give an updated and accurate account of the area. This permitted an evaluation entirely different from an assessment focusing strictly on crime and gave a different view of both the local government and community residents.

Further findings came from a promotional ‘door-to-door’ campaign which city officials asked CUORE to carry out in order to spread word of regulations concerning business development, as well as to train and support some of the municipal staff. The information for dissemination pertained to the Bersani law on incentives for small and medium-sized enterprises (SMEs) and a project concerning business creation, renewal, formalisation, support and development – Creazione, Riqualificazione, Emersione, Sostegno e Consolidamento d’Impresa (CRESCImpresa).

In addition, the results achieved can be measured on the basis of the renewal process for existing businesses:

  • about 8,000 contacts were made by telephone, in person at the centres or during fieldwork;
  • 3,580 people received support for setting up a business, 1,500 of whom were women;
  • 1,280 companies which were engaged in undeclared work received advice on their situation, and 326 problems were solved;
  • six conferences and about 40 seminars were held;
  • 80 companies in the community were encouraged to participate in four regional fairs and several micro-projects;
  • 12 companies in the community dealing in bridal wear participated in an exhibition organised by the CUORE team;
  • the relationship among entrepreneurs improved and a consortium was expected to be set up.

Moreover, 70 staff members have been trained and 44 persons have pursued mentor courses, spending up to three months at the CUORE centres learning how to promote local development as ‘local development agents’.

Furthermore, over a period of six years, 22 young graduates in business economics and sociology (12 women and 10 men) worked in the centres as officers and went on to work in public or private institutions or to attend other training courses in Italy and abroad. In all of these cases, working in the centres proved to be a valuable training experience.

Obstacles and problems

The project encountered certain challenges, including:

  • mistrust and reticence among entrepreneurs, who are often reluctant to participate for fear of being exposed to organised crime;
  • an annual decline in financial resources from the municipality, particularly when compared with the amount of work that has to be done;
  • difficulty in coordinating different institutions at various levels.

Lessons learnt

The first lesson learnt is that regulating businesses and workers takes time due to economic and cultural factors. Furthermore, external factors play a role, such as competition from abroad, poor government support in crime prevention, and inadequate rules that adversely affect regularisation.

Secondly, in order to promote development, it is crucial to understand that resources are limited, and require targeted measures according to realistic community needs and the involvement of beneficiaries.

Thirdly, the project learnt the importance of the tools used to evaluate these realities, in economic and other terms. The experience highlights the importance of trade fairs within the district.

A fourth valuable lesson concerns the role of the university and the analytical coordinators acting as impartial observers, who enabled a comparison of experiences in the field with social and economic theories. In that light, the President of the National Committee for the formalisation of non-registered labour (Comitato per l’emersione del lavoro non regolare) played a further significant role, offering a useful point of contact with the Committee of the Regions and the European Union.

The fifth lesson concerns the difference between districts in the same city. This aspect gives some insight into the difficulty of transferring this kind of project. The four centres involved were located in districts with different economic structures in terms of the strength and quality of the available staff and offices. In the Soccavo centre, for example, the commercial sector outweighed manufacturing, which required a different approach and type of intervention in working with the people concerned, learning their language and understanding their needs.

The sixth lesson is related to training, mainly of centre operators. Training is a continuous exercise to motivate staff in this non-conventional environment where all efforts are directed towards improving the local economy.

The seventh lesson is that, internally, cooperation and information exchange are essential to ensuring project efficiency.

Impact indicators

The project made contact with 1,740 entrepreneurs and involved 2,040 workers. In terms of cost, it drew on financial resources to the value of €1,513,000 from Naples City Council.

Transferability

The project has benefited from experience gained previously in the Urban-Napoli community initiative. It is vital to be in constant contact with the area, making frequent visits from company to company. This approach served as an example for Villaricca, a town in the province of Naples, and also for the ongoing Equal project promoted by another association and the Urban/Eco Department, which is funded by the Campania regional government and the EU. That project consists of three centres in three provinces in the Campania region, and involves a different local business system and economic activities.

Moreover, with the support of the National Committee for the formalisation of non-registered labour, the results and actions of the CUORE project have been included in seminars nationwide. The impact of this project on non-regulated companies encouraged the committee to promote similar initiatives to meet the needs of communities in the central region of Lazio, the northern region of Tuscany, the southeastern region of Apulia, the eastcentral region of Abruzzo and the southern region of Calabria. Each of these experiences has benefited from the work done in the CUORE centres, which provided material and information for the implementation and management of centres for economic renewal.

Commentary

Following a preliminary analysis, four CUORE centres were established in four different communities. Surveys carried on in these areas reveal a flourishing economy, as well as the obstacles that entrepreneurs encounter.

The first obstacle is mistrust in local government, with a tendency to dismiss the opportunities available. In fact, entrepreneurs in the area are not always able to recognise their own needs: they initially appear to be unable to appreciate the consultancy service that the centre can offer. Project researchers have focused on this issue, by introducing themselves as graduates and by earning trust through continuous contact, thereby developing a long-term relationship. The staff at the centre play a delicate role: they interact with local companies through ‘door-to-door’ promotion of legal business opportunities, rather than those pertaining to undeclared work. This means that they have continuous and direct contact with entrepreneurs, their working conditions, their problems, and the search for solutions in the regulation process. They give constant support to those who have difficulty in comprehending the rules, to companies that venture through the regulatory process, and to enterprises that encounter problems dealing with bureaucracy, a common obstacle for small businesses. The relationship with the university enables those involved in the project to discuss the results obtained and to evaluate strengths and weaknesses.

The Urban/Eco Department, which specialises in local development – encompassing urban planners, economists and sociologists – represents a ‘think tank’ of expertise that the centres can rely on for training activities. By studying the needs of the community, researchers have become more competent. To supplement their interpersonal skills and flexibility, the officers have attended training seminars at the department of economic development. High turnover among the operators, due to this acquired competency, has given way to an almost entirely female staff. The need for a more structured organisation was essential to streamlining operations. Therefore, independent centres were merged into a single, integrated group operating in overlapping skills areas.

Circumstances are not always favourable to the activities performed. Mistrust and reticence are common among entrepreneurs, who are often reluctant to participate for fear of being exposed to organised crime. Although the advantages of a more open business attitude may be clear, it is difficult to obtain cooperation within the consortium. Even local agencies are sometimes reluctant to cooperate, and refuse to see the purpose behind the centre. In addition, the officers often have no legal tools to use in their work in the community and are helpless to solve some problems.

Contacts

Main organisations in charge: Labour Office of Naples and the Urban/Eco Department of the University of Naples ‘Federico II’

Websites: www.comune.napoli.it and www.urbaneco.unina.it/eindex.htm

Email: urbaneco@unina.it

Bibliography

Bàculo, L., ‘Segni di industrializzazione leggera nel Mezzogiorno’, in Stato e Mercato, No. 3, 1997, p. 42.

Bàculo, L., ‘L’economia sommersa: Dimensioni, cause, possibili rimedi’, in Orizzonti Economici, No. 88, 1999.

Bàculo, L., ‘Valutazione di una politica per l’emersione del lavoro irregolare’, in RIV – Rassegna Italiana di Valutazione, No. 26, 2003, p. 16.

Bàculo, L., ‘Tackling informal employment: the case of southern Italy’, in International Journal of Manpower, Vol. 27, No. 6, 2006.

Bàculo, L. and Meldolesi, L. (ed.), Nel CUORE di Napoli: Alla scoperta delle imprese sommerse, Municipality of Naples, 1999, p. 137, available online at: http://www.comune.napoli.it/flex/cm/pages/ServeBLOB.php/L/IT/IDPagina/1306

Bàculo, L. and Meldolesi, L. (ed.), Le imprese del CUORE di Napoli: Una realtà sorprendente, Municipality of Naples, 2000, p. 130, available online at: http://www.comune.napoli.it/flex/cm/pages/ServeBLOB.php/L/IT/IDPagina/1306

Bàculo, L. and Meldolesi, L. (ed.), I primi battiti dei CUORE, Municipality of Naples, 2002, p. 120, available online at: http://www.emersionelavorononregolare.it/dev/old/doc/appro/cuore2002.pdf

Bàculo, L. and Meldolesi, L. (ed.), I quattro CUORE: Rapporto sulle attività, Municipality of Naples, 2004.

Bàculo, L. and Meldolesi, L. (ed.), Le imprese di Bagnoli e Soccavo: Risorse da valorizzare, Municipality of Naples, 2004.

Bàculo, L. and Meldolesi, L. (ed.), L’esplorazione dei quartieri storici nel CUORE di Napoli, Municipality of Naples, 2004.

Meldolesi, L., SUD: Liberare lo sviluppo, Carocci, 2001, p. 170.

Meldolesi, L., ‘La politica dell’emersione dell’economia e del lavoro irregolari’, in Economia Italiana, No. 1, 2003, p. 23.

Liliana Bàculo and Sara Gaudino

 

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