Artisans for Growth

HIGHRANGE CRAFTSMANSHIP, BY CREATING UNIQUE PRODUCTS, CAN BREAK ITALY FREE FROM INCREASED COMPETITION FROM CHEAPER PRODUCERS

by Matteo Vizzaccaro
Translated by Alex Foti


Italian companies have lost significant market share in recent years. Three main factors are behind this regressive process: cheap imports from from the East, reduced scale which has limited access to finance and investment thereby hindering capacity expansion, and the inability to participate profitably in the market globalization process.
 
In a globalized system, where new countries (Asia, Africa, Latin America) are flooding the market and cutting prices to levels unreachable by European firms, trying to compete on costs could be fatal. There is however one exception: artisanal companies excelling in craftsmanship. Their model based on the supply of high-end products can, for its uniqueness and inimitability, provide a way out of cut-throat competition. The continuous quest for quality and value rewards these companies, which despite their limited size (in 87% of cases they have less than 10 employees), have increased or kept constant operational investments in 50.5% of cases, and maintained (in 55% of cases) or increased (in 15% of cases) their employment levels. These results are due to the making of unique products of excellent quality and well-conceived strategic choices. Some 71% of these firms have access to foreign markets, with 33% of them make more than 60% of their sales as exports abroad. Western Europe and the US are the main markets of destination.
 
Only by pursuing excellence and quality can Italy step out of fierce competition and meet  the emerging demands expressed by a class of individuals who have changed their purchasing behavior. They are going beyond mere possession, to look at the intrinsic value of a good characterized by cultural depth and people's know-how, which means craftsmanship, authenticity, expertise, creativity. Today this kind of demand finds no adequate satisfaction from a supply system that continues to linger on the past, without realizing the chances for seizing generational change in consumer behavior. Today's consumers are more knowledgeable, but also more critical. Italy has a network of craft enterprises of excellence that is difficult to imitate, and is really capable of meeting these needs, so a new business orientation is would be not only decisive, but quite feasible.
 
Growth in size, however, remains a crucial necessity. Artisanal firms must grow for several reasons: to get more financing and make additional investments both to revisit processes and innovate products, to have the resources to hire managers and work on digital culture, to attain the volumes needed to enter export markets, to have bargaining power with local retailers. Through excellence and growth, Italy can return to be a country of incomparable charm. Excellence in craftsmanship can be the ambassador of Italy's improved positioning in the global economy.