Export, innovation and work: these are the foreign companies that drive the Italian economy

2023-07-10 13:52:21

The foreign companies who operate in Italia they played a decidedly incisive role in the national economy also in 2022, driving our country’s exports and contributing to the economic recovery between employment, revenues and innovation. What often makes the difference is their ability to adapt to the dynamics of the international market and to seize growth opportunities, favored by their involvement in international production networks. The real good news for the future, however, concerns the fact that foreign companies that have invested in Italy have shown a lower propensity to divest between 2019 and 2022 compared to what happens in other global markets, preferring to remain in the country albeit with mostly downstream of international supply chains.

The photograph taken from the third report of theForeign Companies Observatoryrealized by Confindustria and Luiss in collaboration with Istat, Scuola Imt Alti Studi Lucca and Ice Agenzia, and entitled “Foreign companies in Italy: between signs of recovery and new global risks”, tells of a country system which, despite the more classic structural limits and above all the side effects of the pandemic, remains attractive to international companies. If it is true that the experience of the three-year period 2020-22 has triggered a global trend to favor investments in the country of origin of the parent company (the so-called “re-shoring”), with an intensity directly proportional to exposure to the pandemic crisis, it is equally true that in our country there has been no rush to divest affiliates by headquarters around the world. On the contrary, the numbers show that the economic impact of the foreign presence in Italy has come out even more strengthened by the black three-year period. An initial phase of protection of activity and employment levels was in fact followed by a second phase of moderate recovery which, in the case of exports, turned into a significant performance.

According to the complete and detailed structural framework on foreign companies in Italy, which can be inferred from the Istat data referring to 2020 (the last available year of the definitive official data on multinational companies), today the companies active in Italy belonging to foreign multinational groups they are 15,631 and employ 1.5 million workers. The sales product is close to 548 billion and the added value is almost 122 billion. Although they represent only 0.4% of the total of Italian companies, the subsidiaries of foreign multinationals provide a significant contribution to the national economy: they employ 8.8% of the workers, realizing 19.0% of the turnover, 16.0% 5% of added value, 26.8% of research and development expenditure, 32.3% of national exports of goods and 50.3% of imports. From a sectoral point of view, services stand out with 11,114 businesses, a turnover that represents 20.7% of the total turnover of businesses residing in Italy (the 4,517 active in industry instead record an incidence of 17%), and spending on research and development of 31.8% of the sector total (24.5% in industry).

Particularly emblematic is the performance relating to theexport. According to the report of the Foreign Companies Observatory, last year was characterized by a remarkable recovery, with a export growth of foreign-controlled enterprises by 21%. A result that far exceeded the performance of other types of companies (+16.6% of Italian multinationals, +13.3% of companies belonging to domestic groups and +11.7% of independent companies). Analyzing the contribution of foreign firms to overall export growth in 2022, it emerges that 27% of total growth was generated by firms in the expansion phase, although there was also a negative effect of 6% due to firms in contraction. Despite this obstacle, signs of expansion have spread widely, indicating a favorable economic environment for foreign companies. The United States represented a particularly dynamic market, with a 22.7% growth in exports of foreign-controlled companies, accompanied by equally hot countries such as Japan (+22.1%) and India (+27.1%) which recorded a strong demand for the products of foreign companies in Italy.

However, the contribution of foreign companies does not stop at exports. As analysts from Confindustria and Luiss point out, these companies are generally the largest not only in terms of the average number of employees but also in terms of total and foreign turnover per company, they have the highest levels of labor productivity and boast a high degree of merchandise and geographical diversification of exports, essential for seizing the opportunities of new expanding markets and for overseeing the consolidated ones. Last but not least, thanks to their involvement in international production networks and their production specialization in supply chain segments, foreign companies also offer an important contribution in terms of innovation.