The term "centripetal mobility" was used to denote a form of business development that stems from within; it is the ability to adapt rapidly to changes by innovating. It is innovation, in its different forms, of products, processes, commerce, and technology rather than marketing that enables product ranges and business services to be overhauled and broadened. It is this in addition to developing new commercial concepts, as well as introducing new methods and processes of business organisation and management, production, supply and distribution.
A 2008 report on Veneto by MET (Note 1), an economic observatory, highlights that it is the trend towards innovation, which also involves small and very small enterprises, that is one of the main reasons behind the positive performance of the region's economy. In Veneto, 40.9% of businesses claimed they had introduced some form of innovation during the three-year period 2005-2007, a figure that is much higher than the one recorded for the rest of Italy (31.2%). At both regional and national level, there was a positive correlation between company size and drive towards innovation, but there was also significant activity in even the smallest businesses. It should be noted that with the exception of businesses with between 100-249 employees, the percentage of innovating businesses in Veneto was higher than those recorded for the rest of Italy. It is, however, in the micro class (1-9 employees) that the gap between regional and national figures is most significant, highlighting that the differences in innovation performance at aggregate level depend heavily on Veneto's 'micro enterprises', which seem more driven than their national counterparts. (Figure 3.3.1).
A closer look at the innovations introduced reveals that 20% of Veneto businesses introduced primary product innovations (compared with 15.8% nationwide) and 17% secondary product innovations (compared with 13.8% nationwide). The gap is similar in process innovations, although smaller: 13.7% and 10.1% of Veneto businesses introduced primary and secondary process innovations respectively, where national averages equalled 11.4% and 8.8% respectively. About 22.7% of Veneto businesses declared that they had introduced organisational innovations compared with a national figure of about 14%.
The most innovative businesses seem to be located in the food industry (about 30% of food businesses claim to have introduced primary product innovations, and about 28% secondary product innovations); other innovative sectors include chemicals, and rubber and plastic (32% and about 21% introduced primary and secondary product innovations respectively; 26% and 23% introduced primary and secondary process innovations; and 28% introduced organisational, management and commercial innovations). Figures that were somewhat higher than the regional average emerged for secondary process innovations in the vehicle sector (20%) and in the electric machinery and electronic equipment sectors (19%). However figures were somewhat lower than the regional average (though in line or better than national figures for the same sectors) in the transport and telecommunications sectors, which produced figures for product and process innovations (both primary and secondary) that were 50%-70% of the regional average. As mentioned above, however, these figures were equal or higher-at times even 50%-60% higher-than national figures for the sector.
The contribution innovative products made to turnover seems particularly high for new products or services (on average about 46% of turnover in 2007 (Note 2) was attributed to these goods, compared to a national figure of 34%). This data seems to confirm that Veneto is an innovative area that contributes a significant amount to the creation of wealth in the manufacturing sector. There is strong growth in advanced innovative strategies, as well as in ones that literature describes as "modern": today about 18% of businesses consider innovation to be an essential requirement for remaining on the market; 15% innovate because it is an essential part of their sector; and 10% innovate to keep up with their competitors.
One critical feature is the amount of research conducted by Veneto's production system. Although Veneto is starting to show some dynamism in this field, it is emblematic of the Italian model of "innovation without research": much of the innovation produced is informal and thus escapes detection by statistical research based on objective indices.
Eurostat figures show that between 2000 and 2005, regional expenditure on research and development was lower than the Italian average, which is already modest by European standards, both in terms of percentage of Gross Domestic Product and number of researchers.
Europe is, however, still far from the objective set in Lisbon in 2000, which aims for 3% expenditure by 2010. Equally distant is the 2.5% set for Italy. The situations in individual countries are very different: alongside countries such as Sweden and Finland, which surpassed the objectives in 2001, stand countries that devote a lower percentage of GDP to R&D: among them is Italy, which spent 1.1% in 2006. In Veneto, this form of investment has developed in recent years, and there was a 22.7% increase in expenditure on R&D last year. In Veneto, the number of R&D employees has also grown consistently, and there was an increase in all sectors last year. There was a particular increase in the number of people employed in R&D by businesses, which rose by almost 50%. The number of R&D employees also rose by about 20% in public and not-for-profit institutions. (Table 3.3.1).
As is well highlighted by the literature on the subject, there is a close link between a business's international outlook and its propensity towards innovation and productivity. The market's selection process ensures that the most dynamic and innovative businesses will manage to compete successfully by choosing different forms of internationalisation in accordance with their structural features.
Detailed analysis of roles and methods in research and development for three business macro-categories (national businesses, i.e. those that do not export; exporting businesses, i.e. those that only export; and multinational businesses, i.e. those with complex relations with abroad) reveals a major propensity to innovate in exporting businesses that is higher than in both national and multinational businesses. Indeed, in Veneto 28.5% of exporting businesses introduced product innovations in the last three-year period compared with 19.1% of national businesses and with 17.6% of multinationals. Exporting businesses also show a higher and more autonomous capacity to innovate in process innovations than the other two categories: 20.7% of exporting businesses introduced primary process innovations and 15.1% secondary process innovations. It was 12.9% and 9.5% respectively for national businesses and 10.8% and 8.3% respectively for multinationals.
Figures for businesses that conduct research or have research employees also reveal that there is a strong link between internationalisation and innovation: the percentage of businesses that conduct R&D (9.8% of national businesses; 22.4% of exporting businesses; and 22.6% of multinationals) and the percentage of research employees in a business (3.1% in national businesses; 6.7% in exporting businesses; and 7.9% in multinationals) increases with a company's internationalisation. (Figure 3.3.2).
The propensity of Veneto exporting businesses to invest in research and development is confirmed, and a deeper insight revealed, by new information regarding why businesses conduct research and development: the response that labels innovation as the business mission was given mostly by exporting businesses; the majority of Veneto's multinational businesses, on the other hand, gave the creation of innovative products as the main aim of their research.
However when it comes to the use of research as a 'defence', i.e. the business adapts to technological change or conducts research so as not to lose market share, national businesses take a far more passive attitude towards innovation than the other two.
As regards the national figure, it is Veneto's multinationals that seem to lag behind the most; this gap may well be due to Veneto's high level of district integration, through which a major aspect of competitiveness is left to the innovative nature of local sub-suppliers, also a key feature of Veneto's highly dynamic micro-enterprises.

The mobility of Veneto's economy has also been examined by looking at business demography and the rate of business survival. A recent nationwide survey (Note 3) showed that being a larger business and introducing a higher level of product technology both reduce the risk of failure. The positive effect of technology increases with the size of the company: large enterprises operating in high-tech sectors survive on average longer than small enterprises in traditional sectors. Being an exporting company and making Foreign Direct Investments can also reduce survival: on average competition on international markets is fiercer and thus operating in those markets entails greater risk. Likewise, the risk grows if a business is small and it operates in traditional sectors. Comparative analysis of exporters and non-exporters reveals that size and technology play a major role for exporters. It is important for businesses that innovate to be active in a high-tech market; non-innovating companies, however, can survive by exploiting their market power. We can confirm therefore, that an Italian business operating on the international market has more likelihood of survival if it is a large enterprise that sells a high-tech product and introduces innovation in products and processes in particular. We also wanted to observe the survival rate (Note 4) of Veneto businesses at regional level, so the different trends between business sectors were analysed in terms of both enterprises and employees. Between 2002 and 2006 (Note 5), the trend in business survival rate was studied, with survival rate meaning the relationship in percentage between the number of businesses active in year t and survived in t+n and the number of businesses active in year t. (Table 3.3.2).
This study confirms the strength of Veneto's business fabric: at one year the survival rate stands at about 92%, at two years it is higher than 85%, at three years it is 80%, and at four years three out of four businesses are still active.
Analysis of the various cohorts of Veneto's active businesses in this period reveals that there are no great differences between survival rates, which suggests that the trend is not particularly affected by the economic cycle.
However, analysis of survival rates at sector level shows that survival depends partly on the type of business activity. In general manufacturing businesses tend to survive longer than tertiary businesses. The most developed trends in manufacturing stem from the food, metal and mechanical sectors: the survival rates of these businesses at four years are consistently above the regional average by about four percentage points.
There is also a strong correlation between the survival of a business and its size: on average smaller businesses are more likely to leave their market. A comparison between survival rates in 2002 and business size reveals that businesses in sectors that are larger than average have higher rates of survival. The mechanical (16.8 employees per business), metal (10.7) and food (10) sectors are the ones that between 2002 and 2006 recorded the highest survival rates (78.4%, 78.6% and 79% respectively). (Figure 3.3.3).
Analysis of business survival also highlights some features of occupational development within businesses: the longest surviving businesses tend to increase the number of people they employ. During the above-mentioned four-year period, surviving businesses recorded a 5% increase in employees.
This rise in employment, however, did not include all of the business sectors taken into consideration: although employment rose in the food, metal, tourism and business-service sectors, it fell in the electronics and furniture sectors.
The fashion sector was hit particularly hard by the fall in employment (-15.3 %), which occurred against the backdrop of a long-term structural decline that has worsened in recent years due mainly to the growing competition from emerging markets.