Reaching Out to Foreign Markets

How Italian industry is facing the challenges of doing business remotely

By Federico Piazza

 

Remo Pedon, Vice President of the Confindustria Vicenza (Italian Industry association) who is charged with the specific task of handling foreign markets, is taking stock of the current problems, strategies and tools for Italian companies to deal with the export and internationalization situation in November 2020.

Vicenza is the nation’s number one when it comes to per capita exports. The manufacturing landscape is highly varied: in addition to metalworking and mechanical engineering, there’s also leather tanning, jewelry, fashion and many other specializations.

How are companies doing in terms of international operations?

Our exports have been heavily influenced by the pandemic. Major problems have occurred because our companies have been able to establish themselves and interpret client’s needs in a sartorial way, and that work model makes it difficult to let go of in person contact and to manage the relationships remotely.

However, it’s still important to take advantage of all the opportunities offered by technology. Virtual showrooms and trade fairs for example. There’s also using social networks more effectively, to continue communicating with your established clients and to acquire new ones.

What’s the first thing that’s needed to deal with international markets? 

The complexity of the geopolitical and macroeconomic scenarios requires exporters to increasingly diversify their markets, along with the ability to analyze those scenarios and the associated risks.

As a Confindustria, we collaborate with Intesa Sanpaolo, the most structured and internationalized Italian banking group, which offers us informational and operational tools to help our companies.

In which markets are Vicenza’s companies most internationalized?

The key markets are still European: Germany, France, Switzerland and the United Kingdom top the list. Then there’s also North America. The USA is really where the internationalization of our companies has grown the most; it’s a very dynamic and complex area that calls for organized oversight.

What about Asia and Africa?

China is important for Vicenza’s exports, not only as a place to go and produce things. Today it has become a market for our products, including consumer and luxury goods.

India has enormous potential, but there are still many barriers to entering that market.
We need to invest in on-site production, but India’s economic ecosystem is not easy for our SMEs to navigate.
That said, there are still many success stories, because India offers strong engineering expertise and the fact that the use of English is widespread also helps.
With ICE (an Italian agency promoting foreign trade and the internationalization of Italian companies) we are focusing intensively on agricultural machinery and agri-food technologies, sectors where India has made substantial investments.

We also expect a lot from African markets, where our companies can play an increasing role.

Are there prospects in Russia?

It’s a market which has given us a warm welcome. The Russians have purchased a great deal without forcing our exporters to establish a legal corporate presence in their country.
Now the context has changed due to the reciprocal sanctions and the depreciation of the ruble. Today, it’s very difficult for many sectors to sell in Russia without being physically present or without producing there.
We welcome the efforts of the Confindustria Russia’s companies, which are able to offer high-level informational and relational support with local institutions.
Of course, future prospects in the Russian market, as well as for the market in the Middle East, will depend very much on trends in the petroleum industry.

Do international trade agreements help?

Trade relations negotiated by the EU are an important growth lever. The agreements with Canada, South Korea and Japan have had immediate effects on the growth of our exports. We expect a great deal from the EU’s trade deal with Vietnam, which has just come into force. Meanwhile, we’re afraid that we won’t reach a Brexit trade deal with the UK.

There aren’t many international joint ventures on the part of Veneto-based companies.

It’s an old and complex problem, often a consequence of the size limits of our companies. Naturally, our SMEs move cautiously in areas and territories that they don’t know well. It’s possible that our institutions could help more, although the commitment and efforts of the embassies, ICE, and SACE/SIMEST in recent years is commendable.

In the Confindustria’s ‘Country Guides’ we organize country communities, relating corporate experiences and offering training and discussion. In 2004 we created the Samorin industrial park in Slovakia, the first and perhaps only one led by an Italian entrepreneurial association abroad.

 

 

 

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