Social partners highlight competitiveness and development issues

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According to a survey published in March 2001 by the Confindustria employers' confederation, the innovative capacity of small firms in Italy is being hampered by factors such as the rigidity of the labour market, the lack of skilled labour, and a high tax burden. Meanwhile, at a May 2001 conference on the South of Italy, Cgil declared that priority should be given to the quality of economic development and criticised employers' policies in this area.

Two well-known distinctive features of Italian economic development are the country's large numbers of small firms, often localised in specific geographical areas (so-called "industrial districts"), and the backwardness of the South in comparison with the regions of the North and Centre.

The growing internationalisation of the economy has changed the context in which small firms operate. In general, these are enterprises operating in export-oriented sectors, so that maintenance of their innovative capacity and competitiveness is crucial.

As regards the development of southern Italy, recent employment figures suggest some changes. Although geographical differences still persist - in January 2001, the unemployment rate was 4.4% in the North-West, 4% in the North-East, 8% in the Centre and 20.3% in the South - employment grew throughout the country in the year to January 2001, increasing by 3.7% in the regions of the South, compared with the national average of 3.2%.

Against this backdrop, two recent social partner initiatives have highlighted these key issues for the Italian economy - a survey of the competitiveness of small and medium-sized enterprises (SME s) conducted by the Confindustria employers' confederation, and a conference on the development of southern Italy organised by the Cgil trade union confederation.

Confindustria survey

During the Confindustria congress held in Parma on 16-17 March 2001 (IT0104185F), the Confindustria and Doxa research institutes presented the findings of a survey of SMEs, based on a sample of 1,000 firms with between five and 250 employees.

Growth is a crucial issue for small firms, the report states, although growth should be understood not just in quantitative terms (eg an increase in sales or number of employees) but in qualitative terms, and consequently with reference to organisational-managerial aspects and market position. The factors obstructing such growth for small firms are found to be of two types: internal and external. Among the former are a lack of human resources, an underdeveloped managerial culture, and the difficulty of obtaining financial resources. Among the latter are a high tax burden, an inadequate labour supply, the rigidities caused by bureaucracy, and a lack of infrastructure.

The survey's findings on human resources are of great interest. According to the majority of the entrepreneurs interviewed, the Italian labour market is unable to satisfy demand from SMEs. The most sought-after human resources are skilled workers and technicians. Moreover, young people are found to have gaps in their technical-professional training. Cultural aspects, too, make labour difficult to find, in that young people have a negative attitude towards manual work. A further difficulty is the perceived rigidity of the labour market, which entrepreneurs view as being in sharp contrast to the flexibility and adaptability required by unstable markets.

Added to these environmental factors are internal ones, the study states. Because of their limited size, small firms find it difficult to attract and keep more highly-skilled personnel. In fact, there are few opportunities for career advancement and professional growth in SMEs.

In order to prevent a deterioration in the competitiveness of SMEs, the study regards the following measures as of priority importance: reducing the tax burden; simplifying the law; and reforming the labour market. On the last point, according to the report what is required is greater deregulation and the introduction of innovative instruments, such as incentives for more older workers to stay in their jobs, or, if they have retired, to return to them with a different employment relationship (for example, on a contract for "freelance work coordinated by an employer" - IT0011273F). Also important are training measures, not just to prepare the human resources required, but also to upgrade manual work.

Unions and development of the South

The theme of the development of southern Italy was addressed by a conference organised by Cgil held on 3-4 May 2001 in Bari.

An introductory paper by Paolo Nerozzi, a Cgil official, stressed that the development of the South should be framed in the broader context of Italy's model of development and competitiveness. For this reason, besides the fight against organised crime and the development of infrastructure, it is of crucial importance for the South to exploit the potential of the local economy and its resources. Moreover, policies to support businesses should be made more selective: incentives should be targeted on the most innovative firms in terms of technology and innovation, those most attentive to workplace safety and protection of the environment, and those which take part in projects for territorial development.

In the view of Sergio Cofferati, the Cgil general secretary, the model for the development of the South proposed by Cgil is antithetical to that proposed by the employers' associations, and in particular by Confindustria. The main priority should be boosting the South's competitive and innovative capacity, and not maintaining a weak productive system by using incentives and concessions indiscriminately. Some of the means available are training, policies to fight the irregular economy, and schemes to attract investments. It is also necessary to emphasise local-level planning and negotiation and, according to Mr Cofferati, "territorial pacts" or "area contracts" (IT9704203F) should be used to support innovative development.

Commentary

The employers' associations and the trade unions have opposing views on economic development. The former are mainly concerned with issues like taxation, reducing labour costs and the rigidity of the labour market, while the latter (and Cgil in particular) are critical of the limited innovative capacity of firms.

These differences notwithstanding, the experience of the "industrial districts" and of southern Italy highlight the crucial role of the social partners in promoting local development. By means of negotiation and the creation of multi-actor networks (comprising employers' associations, firms, unions, chambers of commerce, local government etc) it is possible to obtain essential resources (training, for instance) and foster the spread of innovation and knowledge. At the same time, the orientation is increasingly towards "endogenous" development models based on the enhancement of local resources. Especially in the case of small firms, an ability to integrate into a productive system may help them overcome the limitations arising from their size. (Marco Trentini, Ires Lombardia)

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