EMCC European Monitoring Centre on Change

Italy: ERM Comparative Analytical Report on ‘Public policy and support for restructuring in SMEs’

  • Observatory: EMCC
  • Topic:
  • Published on: 14 May 2013



About
Country:
Italy
Author:
Roberto Pedersini
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The importance of SMEs in the Italian production system fostered many initiatives to support restructuring of SMEs in a broad sense. The focus of the public debate has been long on the capacity of SMEs to respond to international competition and expand on global markets. Less attention was devoted to supporting employees during restructuring. The 2008 economic crisis changed this approach and drew the attention to income support measures. Alongside the already existing schemes administered by joint bodies (enti bilaterali), in 2009 a generalised ‘exceptional’ Wage Guarantee Fund scheme was introduced, which practically covered SMEs and their employees with job protection and income support. Another area, which has been further developed during the crisis, is the support of the access of SMEs to credit.

QUESTIONNAIRE

Part 1: Overall policy context

Table 1. Units, employed and employees by enterprise size. 2007 (industry and services, % of total)
 

Up to 9 workers

Of which

Up to 1 workers

10-49 workers

50-249 workers

250 workers and over

Total

% Units            
Italy

94.8

57.9

4.6

0.5

0.1

100.0

North-West

94.3

56.8

5.0

0.7

0.1

100.0

North-East

93.7

54.5

5.5

0.7

0.1

100.0

Centre

95.1

58.5

4.4

0.4

0.1

100.0

South

95.9

61.8

3.7

0.3

0.0

100.0

Islands

96.1

59.4

3.5

0.3

0.0

100.0

% Employed            
Italy

46.4

14.7

21.0

12.6

20.0

100.0

North-West

40.3

12.4

19.7

14.2

25.7

100.0

North-East

44.0

12.7

23.4

14.7

18.0

100.0

Centre

45.5

14.7

19.5

10.3

24.7

100.0

South

59.2

21.0

22.2

9.9

8.6

100.0

Islands

62.2

20.5

20.8

9.6

7.4

100.0

% Employees

 

 

 

 

 

 

Italy

24.1

0.2

28.0

18.3

29.5

100.0

North-West

19.1

0.1

25.1

19.7

36.1

100.0

North-East

22.1

0.2

30.7

21.1

26.1

100.0

Centre

23.3

0.2

25.7

14.9

36.0

100.0

South

36.0

0.4

33.6

16.2

14.2

100.0

Islands

40.1

0.5

31.7

15.8

12.3

100.0

Source: Istat, http://dati.istat.it/.

1.1. Has there been public or policy debate on the specific challenges for SMEs and/or their employees in restructuring before the global recession of 2008/09? Please specify, for example:• If so, since when (e.g. up to 3 years before, 3-10 years before, longer), at which level (national, regional, sectoral, all of them) and in which form (‘real’ policy debate mirrored in policy documents or rather public debate mirrored in media, or both)?

SMEs are very important in the Italian business structure. According to Eurostat data (Eurostat 2008) in 2005 there were some 3.8 million SMEs in the non-financial business economy with around 12.2 million workers. SMEs represented 99.9% of all businesses and they accounted for 81.3% of all persons employed and 70.9% of total value added. Both the latter indicators were well above the EU27 average, which were 67.1% and 57.6% respectively (Eurostat, Enterprises by size class – overview of SMEs in the EU, Statistics in focus 31/2008). Istat (the national statistical institute) data for 2007 show the stability of such indicators as SMEs represented 80% of persons employed and over 70% of employees.

The debate over SMEs in Italy dates back to the 1970s-1980s and is linked to the important presence of socalled ‘industrial districts’, that is clusters of SMEs specialised in certain productions and/or value chains which are locally concentrated. In those initial years, though, restructuring was in fact affecting large vertically integrated enterprises and SMEs appeared as more flexible and capable to adapt to changing demand, thanks to their size and especially the capacity to cooperate effectively along different production phases. The debate focused on the availability of local competitive advantages in terms of entrepreneurial culture, widespread trust, skill traditions, and so forth.

With some simplification, it is possible to say that during the 1990s, with the progress of the internationalisation of markets and the connected increase of international competition – as well as with the growing importance of large multi-national companies reorganised through global production chains – the discussion on SMEs and industrial districts in particular shifted towards their capacity to adapt to the new global business environment. Their traditional competitive resources, which were rooted in the local socio-economic systems and consisted essentially in entrepreneurship, technical skills and collaborative attitudes seemed increasingly insufficient to cope with the emerging global competition. The capacity to innovate in terms of products, processes, and market strategies appeared more and more crucial to succeed and therefore the ability to build links beyond the original districts started to be considered essential.

In this sense, a broad debate on the restructuring of SMEs and industrial districts in particular emerged and some of the features, which were formerly considered as advantages, started to be seen as limits and constraints. Notably size was now considered a potential drawback because it often led to low investment and innovation capacity, as well as to a predominant position of the individual entrepreneur as opposed to more structured firms with specialised managers. Moreover, the family ownership was also regarded as possibly endangering the stability of the company, because a company transfer within the family could not ensure the continuity neither of the entrepreneurial abilities nor of the technical skills. Finally, the prevalent specialisation of clusters in traditional sectors, such as furniture, textile, clothing and shoes (the socalled ‘made in Italy’ products) and mechanical products, most of them with labour intensive productions, was also considered particularly risky, because it exposed SMEs to the competition of emerging countries.

In this sense, a number of initiatives developed, especially at local level, to provide innovative services to SMEs (R&D, technological transfer, marketing, legal services, HR management, etc.) in order to accompany their reorganisation and support restructuring in a proactive way. Whereas in the 1970s and 1980s clusters experienced a remarkable boost, with an increase in the number of firms through new initiatives, including by spin-offs, in the 1990s and 2000s, there were examples of consolidation around district leaders and in any case reorganisation and closures increased.

The debate was developed by a number of actors, including associations of district SMEs, local chambers of commerce, national employer and business associations, local authorities and researchers, and national policy makers, just to name the most important ones. It also featured prominently in the public debate, especially through the contributions of economic newspapers and magazines.

• Which policy areas (for example, SME policy, entrepreneurship policy, employment policy, social policy, regional policy etc.) were involved? Particularly: Does SME policy specifically deal with restructuring? Does ‘restructuring policy’ specifically deal with SME issues?

As mentioned above, the issue of the restructuring of SMEs was particularly focused on the provision of support in terms of business services (knowledge-intensive business services, KIBS) by public or associational actors. Of course, there was and there is a recurrent general debate on the fiscal and administrative burdens on SMEs (not specifically related to restructuring) and, with the crisis, the issue of the access to credit became particularly important (although it has always been an important issue in the debate about SMEs).

However, if we look at the ordinary measures devised to support business reorganisation, it is necessary to underline that the main tools aimed to support reorganisation and restructuring – that is the Wages Guarantee Fund – did not cover most of SMEs until the 2009 economic recession. In fact, the Wages Guarantee Fund was originally intended for large industrial firms and this characterisation, with some adjustments and qualifications, still remains. Among the various exceptions to the application of the ordinary Wages Guarantee Fund (Cassa Integrazione Guadagni ordinaria), which are particularly relevant for SMEs, is the exclusion of all craft firms (only in the building sector, craft firms are covered by the specific construction industry scheme) and businesses operating in the tertiary sector (commerce and services). The special Wages Guarantee Fund (Cassa Integrazione Guadagni) is meant to support reorganisation processes and it has a similar coverage as the ordinary scheme. However, it also covers commercial firms with at lest 200 employees (presently over 50 employees, as a transitory measures) as well as craft subcontractors of firms which benefit of the special Wages Guarantee Fund (provided the contractor accounted in the previous two-year period for over 50% of the subcontractors’ turnover) and cleaning and catering subcontractors of firms which benefit of the special scheme.

This situation changed recently, when a new temporary scheme was introduced in 2009, which covers, among the others, SMEs which are outside the standard schemes. This is the generalised (that is not limited to special sectors or territorial areas) ‘exceptional’ Wage Guarantee Fund scheme (Cassa integrazione guadagni in deroga) introduced by article 19 of decree law 185 of 29 November 2008 and implemented by the agreement of 12 February 2009 between the national government and the regional administrations and then, at regional level, by specific agreements between each administration and the territorial social partners.

So, it is possible to say that SME policies deal with restructuring in terms of business and strategy upgrading, but the (traditional) restructuring policies, especially in terms of job protection and income support schemes, like in the case of the Wages Guarantee Fund, do not deal specifically with SME issues and do not cover them.

• Did the public and policy discussions deal with restructuring as such or were specific types or phases of restructuring covered?

They dealt mainly with anticipating change, although not necessarily in a systematic and structured manner, especially in terms of innovation and business expansion. As mentioned above, in fact, support during the actual management of restructuring and notably to address employment reductions was rather weak.

• Which were the issues/contents that have been discussed? Which specific characteristics of SMEs in restructuring were considered in this context? Was the specific case of SMEs as subcontractors a topic for discussions?

Of particular relevance was the capacity of SMEs to face international competition and develop in a globalising economy. The lack of managerial skills, the difficulties to invest in R&D, and the capacity to expand to foreign markets were particularly prominent.

As for subcontractors, it must be mentioned that the special Wages Guarantee Fund (Cassa integrazione guadagni straordinaria) can be extended to craft subcontractors when the main contractor is covered, provided the contractor accounted in the previous two-year period for over 50% of the subcontractors’ turnover.

• Did the discussions rather deal with the enterprise perspective or with the employee perspective or both?

Following what was mentioned above, it dealt more with the enterprise perspective.

1.2. Did the global economic and financial crisis of 2008/09 cause any change in focus of the above (for example, increased/decreased focus on SMEs and their employees in restructuring, change in policy areas or issues covered)?

Yes. The main changes were certainly:

  • The inclusion of the employee perspective by the extension of the Wages Guarantee Fund through the introduction of the ‘exceptional’ scheme which is funded by regional resources, including those of the European Social Fund (ESF). It entails the activation of social dialogue at regional level, with a view to define the overall framework for the implementation of the scheme as well as territorial level to specifically cover the individual firms covered by the tool. It also comprises both income support measures and activation initiatives, essentially in terms of training initiatives, as required by the ESF.
  • The focus on the credit crunch increased the importance of the access of SMEs to credit. This led to the launch of different initiatives to help SMEs to access credit and face (temporary) liquidity problems.
  • The other areas of intervention focused on strategic development were not abandoned because they are regarded as crucial in the medium-to-long term run. The new initiatives are more focused on ensure the short-term sustainability of SMEs. But the main policy objective is their long-term viability and development.

1.3. Are social partners or employers’ and employees’ organisations involved in public and policy debate on restructuring in SMEs?• If so, which (types of) organisations and at which levels?

Yes. As mentioned above there are different actors involved in the public and policy debate on SMEs (which is often about reorganisation and restructuring in the broad sense). Local business and trade associations are certainly key players in the debate, especially where specific SME clusters are present. However, it should be underlined that in Italy there are numerous employer associations which cover SMEs in particular, like all craft associations, while others have most of their affiliates among SMEs, as in the case of commerce and tourism associations. These associations are particularly committed to support SME policies, including fiscal and administrative matters. Finally, it must be stressed that the craft sector in Italy has a strong system of joint bodies (enti bilaterali), which engage in different services for firms and employees, including training and welfare. These are certainly important actors whereby employer associations and trade unions jointly participate to the debate and maybe more interestingly act to support SMEs.

Trade unions are well aware of the specificity of SMEs and it should be mentioned that also the traditional industrial districts model included an important collaborative role of trade unions at both territorial and workplace levels, especially through the influence of the specific political cultures which were prevalent in the territories of the socalled ‘Third Italy’ (Terza Italia; third after the industrialised areas of the North-West and the regions of the Mezzogiorno), that is the socialist and communist tradition in the Centre and the Christian-democrat in the North-East. For instance, in the latest Industry Report of the trade union confederation Cisl (Nono Rapporto Industria. Fare sistema per rilanciare l’industria e la crescita) published in July 2012, a whole section is devoted to “the policies for SMEs, clusters and territories”. The report mentions a number of critical issues, including liquidity and access to credit, generational renewal of family firms, vacancies and skill mismatch. It also proposes three main areas of policy intervention: a) strengthening the financial culture of SMEs, in terms of management, access to credit and utilisation of available incentives; b) develop a system of accessible business services at sustainable costs; c) the promotion of the internationalisation of SMEs. According to the report, these policy areas should be developed essentially at local level.

It can be mentioned that in May 2010 some of the main employer associations representing SMEs in the craft and commerce sectors set up a common organisation to participate in the public debate on economic and social reforms and sit together in consultations and negotiations with the public authorities. This new organisation is R.E TE. Imprese Italia, which was set up by three craft employer associations (Confartigianato, CNA, and Casartigiani) and two commerce, service, and tourism employer organisations (Confcommercio and Confesercenti). The policy documents and proposals of R.E TE Imprese Italia focus in particular on the role, interests and needs of SMEs, in the perspective of their growth and consolidation in both the domestic and the international markets. A recent initiative is a National Observatory on Credit for SMEs.

• What are their opinions, perspectives, recommendations?• Did they succeed in convincing governments or public authorities at various levels of their viewpoints?

It is rather difficult to answer these two questions, especially given the plurality of initiatives and positions at various levels. It can be sad that they are important actors and they can certainly influence the policy process. In certain cases, especially at local level, they can be the promoters of initiates, which are shared and taken on by political authorities. In recent negotiations with the national government, for instance those on the 2012 labour market reform of the ongoing debate on a possible pact on productivity (October 2012), R.E TE Imprese Italia has been an important actor, which put clearly forward its positions and requests.

In its strategic document of October 2010 (Ripensare la crescita del paese: strategie e scelte di medio termine, 6 October 2010), R.E TE Imprese Italia pointed to a number of priority initiatives to help overcome the economic crisis and to foster economic growth and support the business sector, including:

  • A fiscal reform to reduce administrative burdens in general, decrease taxation on production activities and labour, introduce fiscal incentives to help employment creation, diminish business start-up costs, implement a federal fiscal system;
  • Administrative simplification to make all regulations simpler and more business-friendly;
  • Policies for innovation in SMEs, with a special attention to the territorial dimension of competitiveness and growth and to the importance of industrial clusters and business networks. Industrial policies should be focused on SMEs and business networks, with a better coordination of the different initiatives, at national and regional levels;
  • The enhancement of partnerships between SMEs and the financial sector, with the development of specific initiatives for SMEs;
  • Improve ‘active labour’ policies, both within companies and in the labour market, by investing in participatory industrial relations, by developing performance-related pay, training and apprenticeships at workplaces, to be supported by appropriate monitoring tools of the actual firms’ requirements, and by strengthening the role of joint bodies in these fields.

It must be mentioned that R.E TE Imprese Italia has signed in 2012 two important documents with the main Italian employer organisations on measures to address the crisis and support economic growth. This highlights how employer associations are working together and also that SME issues are largely shared by all employer organisations, which in fact usually feature among their members a large number of SMEs. This is for instance the case of the major Italian employer association Confindustria, which organises firms of all sizes in its member organisations and has a specific section devoted to the interest representation of SMEs (Piccola Industria).

Part 2: Support instruments

2.1. Please provide an overall assessment about how accessible and suitable public and social partner based restructuring support for companies in general are for SMEs or their employees.• Do SMEs and/or their employees generally have access to the available instruments and are these suitable for their specific needs in restructuring?• Are there specific (types of) instruments (for example, targeting specific types or phases of restructuring, offered at specific administrative levels) that are more/less accessible and suitable for SMEs and/or their employees that for larger firms? If so, why?

The present ‘exceptional’ Wage Guarantee Fund responds to the demand for short-term support during the crisis, with a view to retain employment and reduce costs in presence of a significant fall in demand. In particular, the integration of the income-support measure with training and requalification, which specifically applies to the ‘exceptional’ scheme, if properly implemented, may help address the more general issues of adapting to a changing business environment, considering the usual low investment in training that SMEs are able to directly support. It is important to stress, however, that the ‘exceptional’ schemes was introduced in 2009 and is only a temporary measure, which should be phased out in the future and whose duration is presently envisaged until 2013.

2.2. Do there exist specific public or social partner based support instruments explicitly targeting at SMEs and/or their employees in restructuring? Please specify, for example:• If so, by whom are they offered (public vs. social partners/employers’/employees’ organisations) and at which administrative levels (national, regional)?

Many initiatives are specifically devised for supporting SMEs in running and developing their business both in terms of improving internal management and devising new product, market and financial strategies. They are aimed to supplement the internal resources of SMEs for R&D, marketing, fiscal and legal matters, as well as HR management and provide skills and competencies which would otherwise not be available within the firm. They are actually meant to fill important gaps, which differentiate small and large firms.

These initiatives are often locally available and depend on the specific demands and actions of local actors. As a consequence, it is not possible to list or provide a comprehensive coverage of all instruments aimed to support SMEs in Italy also because of their local differentiation and articulation.

There are two interesting examples, which refer to support in access to credit and to joint initiatives in the fields of training and welfare benefits.

The first one is made of the various guarantee consortiums (Confidi) for the access of SMEs to credit for various reasons, including company expansion, R&D, internationalisation, liquidity and financial management and consolidation. Confidi are consortiums usually promoted by employer associations at local and national levels, which provide guarantees and access to credit for associated SMEs at special collective rates. They also often provide a number of financial advice services. According to a recent research (Comitato Torino Finanza-Camera di Commercio di Torino, I Confidi 2012), in 2011 there were almost 540 Confidi in Italy (there were nearly 700 in 2007). Such a high fragmentation is linked to the high associational density in Italy as well as from the local scope of many Confidi, but it can produce a number of limitations in terms of prices for the associated firms and risk management capacity, to name the most important ones. Despite this structural problem, it is important to highlight that Confidi developed in the late 1950s as a bottom-up development in the craft sector as a means to increase the bargaining capacity of associated SMEs. At present, there are seven main federations of Confidi which are linked to employer and business associations, including Confindustria (Federconfidi), crafts associations (Fedart), Confapi – the small businesses association (Fincredit), Confcommercio (Federascomfidi), Confesercenti (Federfidi), Legacoop in the cooperative sector (Legacoop) and Coldiretti in the agriculture sector (SGFA-Coldiretti).

The Confidi system can use the public Central Guarantee Fund (Fondo centrale di garanzia), which has been set up to support access to credit of SMEs for loans of up to € 1.5 million, to acquire a second order guarantee. Alternatively, any SME can directly ask its bank to apply for the public guarantee on its loans. The guarantee is granted or refused after the examination of the request.

During the economic crisis a number of further specific initiatives have been started to address the issue of the access to credit of SMEs. For instance, in 2009 and 2012 the Cassa Depositi e Prestiti (CDP, ‘a joint-stock company under public control, with the Italian government holding 70% and a broad group of bank foundations holding the remaining 30%’) agreed with the Italian Banking Association (ABI) the mobilisation of funds to support investment and liquidity management of SMEs to be allocated through Italian commercial banks. The resources provided by CDP were € 8 billion through the socalled ’Plafond SMEs 2009’ (Plafond PMI 2009) and € 10 billion with the ‘New Plafond SMEs’ (Nuovo Plafond PMI) launched in March 2012. The latest intervention includes € 2 billion to cover overdue credits of SMEs towards the public administrations, which could be sold to banks through this credit line.

The second examples are the joint bodies (enti bilaterali), which also developed originally in the craft sector as a joint initiative of employer associations and trade unions and were mainly an instrument of occupational welfare. They nowadays provide different services ranging from training to income support measures on a mutualistic basis. There are different national systems of joint bodies, including in the craft sector (Ebna, which was established by the employer confederations Confartigianato, Cna, Casartigiani, Claai and the trade union confederations Cgil, Cisl and Uil), in the commerce and service sector (Ebinter, set up by Confcommercio and Filcams-Cgil, Fisascat-Cisl and UilTuCS-Uil), in tourism (EBNT, created in 1991 by the employer organisations of the tourism sector affiliated to Confcommercio, Federalberghi, Fipe, Fiavet, Faita, Federreti and the trade unions Filcams-Cgil, Fisascat-Cisl and UilTuCS-Uil). The joint bodies are present at local levels, usually provincial and regional.

The instruments which have been specifically devised for SMEs by the joint bodies typically and traditionally include support during restructuring. This is in particular the case of the craft sector that, notably because it was outside the coverage of the national mandatory schemes developed a contractual system tailored o the needs of craft firms centred around the systems of joint bodies. Given the structure of collective bargaining in the craft sector, the implementation of the system has been left by national agreements to the regional level, which represents the second level of bargaining. The joint bodies includes many initiatives in favour of both firms and employees, which typically include, for firms, support in case of suspension of production due to exceptional circumstances (like adverse meteorological events), and contributions for investments and training; and for employees, income support measures (it should be mentioned that the present exceptional Wages Guarantee Fund scheme has redefined and integrated the provisions of joint bodies), seniority allowances, support for maternal leave, and study grants.

The national joint intersectoral funds (IT0202103F, IT1201019I) are another more recent type of joint bodies. Intersectoral funds are set up by means of an agreement between unions and employer associations according to article 118 of law 388 of 2000. They are funded by an obligatory contribution, which is equal to 0.3% of the wage bill. Each company can decide to join an intersectoral fund and membership in a fund is a requisite for benefiting of the fund’s financial support for training. The funds sponsor local, sectoral, company and individual training plans, selected through a joint evaluation procedure. There are special intersectoral funds for SMEs (like Fondartigianato, created by Confartigianato, CNA, Casartigiani, Claai and Cgil, Cisl and Uil, FOR.TE, promoted by Confcommercio, Confetra and Cgil, Cisl and Uil, Fondo Formazione PMI which was set up by Confapi, Cgil, Cisl and Uil, and Fondo Dirigenti PMI established by Confapi and Federmanager), but also the other funds cover SMEs, sometimes through reserved selection procedures, like in the case of Fondimpresa, the intersectoral fund established by Confindustria, Cgil, Cisl and Uil. Indeed, the bulk of Fondimpresa’s member firms are SMEs (98% with less than 250 employees and as much as 54% with up to 9 employees) as well as the majority of the covered employees (54% in companies with less than 250 employees, 5% in companies with up to 9 employees) (Source: Fondimpresa, http://www.fondimpresa.it/).

• Are the activities of different support service providers coordinated? If so, how and how well does this work?

There is no overall coordination of the various initiatives. As for the two examples mentioned, the national Confidi federations and the national joint bodies in the different sectors coordinate to some the extent the activities of the associated bodies (individual Confidi and local joint bodies).

• Which phases of restructuring do they target?

See above. All of them, but with a particular attention to innovation and business expansion in an anticipatory perspective. These initiatives typically operate in a segmented and specialised manner, by both territory and topic. The support of firms and employees during restructuring, especially in the case of employment reductions, is less developed. Important exceptions can be found, for firms, in the case of credit to address liquidity problems and, for employees, in the income-support measures administered by the joint bodies system.

• Which types of restructuring do they target?

See above. They can address all types of restructuring.

• Do they target SMEs in general, or specific size classes, sectors, regions, legal forms, roles (for example, as subcontractors) etc.? Do they target employees of SMEs in restructuring?

Since they are usually local and sectoral initiatives, they tend to focus on certain areas and sectors. The link with employer associations makes the legal form also relevant in many cases; for instance, there are often separate and specialised support schemes for craft firms or cooperatives.

Employees of SMEs in restructuring are targeted by the ‘exceptional’ Wages Guarantee Fund and joint bodies, which provide income support measures (both) and training and labour market services (the joint bodies).

• What type of support do they provide? What specific challenges for SMEs in restructuring do they address?

See above.

• Is there some information about how well they are known among SMEs and their advisors and about how they are generally assessed by the SME sector? What are their strengths and weaknesses? Are there recommendations for improvement?

The instruments mentioned above (Confidi, joint bodies, and the ‘exceptional’ Wages Guarantee Fund) are very well known by firms and advisors, not least because they operate through the social partners.

Part 3: Good Practice

  • Name of the instrument in national language and English: Cassa integrazione guadagni in deroga, ‘Exceptional’ Wages Guarantee Fund (the generalised scheme introduced in 2009)
  • Justification for selecting this measure as Good Practice: It is a very important measure to address the difficulties SMEs experience during the economic crisis.
  • Date of launch of the instrument and end date (if applicable): February 2009-2013 (expected)
  • Initiator/administrator (organisation): National government and regional administrations
  • Other involved actors and their roles: Social partners define at regional level with the regional administrations the framework for the application of the tool
  • Source of funding: national and regional (which include European funds)
  • Target group/eligibility/coverage: it is not limited to SMEs, but SMEs and their employees are an important target since they are outside the coverage of the standard Wages Guarantee Fund schemes (Cassa integrazione guadagni ordinaria and Cassa integrazione guadagni straordinaria)
  • Phase of restructuring targeted: Management of restructuring
  • Type of restructuring targeted: Internal restructuring, in order to avoid dismissals by a ‘suspension’ of the employment relationship.
  • Purpose/content/characteristics/description of services provided: Income support measure for the employees with training and requalification. During the suspension, which can concern only part of the total working time, workers receive an allowance equal to 80% of their pay for the non-worked hours. The allowance cannot exceed a maxim level which is set every year. The maximum duration of the allowance is defined in the territorial agreements implementing the schemes and it varies according to the kind of intervention. It can be defined in hours per employee or months per intervention.
  • Outcome of the instrument (e.g. number of beneficiaries, effects): The total amount of authorised hours of income support were some 122 million hours in 2009, 370 million hours in 2010, 320 million hours in 2011, and 239 million hours in the January-August 2012 period (Source: Inps). Authorised hours are usually not used entirely by firms. The most recent data indicate an average utilisation rate of around 50% (Inps, CIG-Cassa Integrazione Guadagni. Ore autorizzate per trattamenti di integrazione salariale, Focus agosto 2012).
  • Strengths/success factors of the measure: Relatively easy and rapid access, job retention in temporary economic difficulties, working time and wage flexibility of employers combined with income support, job security and training for employees
  • Weaknesses/bottlenecks of the measure: Mainly short-time oriented even if the training and requalification can provide some longer-term perspective, employer has to prefinance the income support and is only reimbursed later
  • Was the instrument formally monitored/evaluated? If so, please specify (by whom, how, what were the finding and how were the findings used etc.): No
  • Weblink: http://www.inps.it/, the National Social Security Institute.
  • Information sources used for filling this section: Ministero del lavoro e delle politiche sociali, Inps (see also ERM 2010 Annual Review, Extending flexicurity – The potential of short-time working schemes and Salvatore, L. (2010), Italy: Wage guarantee fund, solidarity agreements, bilateral bodies and wage guarantee fund in derogation, Dublin: Eurofound).

Commentary

The importance of SMEs in the Italian production structure, the relevance of ‘industrial districts’ and local specialised production clusters, and the presence of many employer organisations and trade associations specifically focused on SMEs have fostered the development of many initiatives aimed at supporting SME restructuring in a broad sense. Quite interestingly, the focus of the public debate and of the actual initiatives has for many years been on the capacity of firms to adapt to a changing business environment and support innovation and business internationalisation, with a view to compete effectively on global markets. This was also due to the traditional specialisations of Italian SMEs in mechanical productions and socalled ‘made in Italy’ products in clothing, shoes and furniture, which expose Italian SMEs to the direct competition of emerging economies. Relatively lower attention was given to support of employees, especially during management of restructuring. Some support in this field was available, for instance through the system of joint bodies in the craft sector, but no significant national measure was present. The 2008 crisis has focused the attention of public authorities and social partners on the difficulties of SMEs and an ‘exceptional’ Wages Guarantee Fund scheme was introduced with a rather general coverage (as opposed to other previous exceptional schemes focused on particular sectors or areas), which in practice extended the income support measure provided by the fund to all SMEs. In fact, SMEs are only partially covered by the standard Wages Guarantee Fund schemes. The ‘exceptional’ scheme is considered important as it ensured to extend the employment protection to all SMEs and their employees and to combine the income support measure with training and requalification. The scheme should be phased out after 2013 and replaced by occupational funds.

Roberto Pedersini, Università degli Studi di Milano

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