The international crisis is commonly considered to have started in September 2008, but this affected the production systems of Italy and Veneto during a renovation process which had been underway for a while. As gathered from extensive and recent literature (Note 1), the competitive context in which the manufacturing businesses have been working radically changed since the middle of the Nineties. Veneto's old competitive advantage factors which were mainly based on the control of production costs were taken on by other geographical areas (in particular by Eastern European Countries, China and India). Subsequently, the productivity experienced a stop which lasts for years and precedes the international recession. However, the pre-crisis evidence indicated that certain successful businesses had already changed their business models, focussing their strategy on both uphill and downhill activities with reference to the production process. The winning strategy seems to be that of differentiating and qualifying their own products against those of their competitors and escaping mere price competition by establishing specific Research & Development, design and advertising activities in addition to the creation of ad hoc distribution networks, the easy access to new markets and the guarantee of assistance. This transformation is defined as a sort of "tertiarization of manufacturing activity" (Note 2), and is a process in which intangible investments are acquiring importance in relation to those that are tangible.

Against the backdrop of the worst economic and financial crisis in recent history the European Union has adopted an ambitious strategy called "Europe 2020" aiming at long-term recovery and with the objective of achieving a smart, sustainable and inclusive growth, promoting competitiveness in a strictly economic field. (Figure 10.1.1)
The European Commission has drawn up a new regional competiveness index for all the European regions. In addition to purely economical aspects, it is made up of a series of indicators also concerning factors related to the quality of life and life expectancies considered in view of the perception of health, faithfulness as well as aspects related to innovation and technological availability (Note 3).
On the European scale, Veneto is placed in the middle of the ranking, far from the highly competitive German regions and the south of Great Britain. However it is higher in relation to the less developed regions of Greece, Eastern Europe, Portugal and Southern Italy. How, though, is it possible that an objectively wealthy area such as Veneto is not amongst the most competitive ones?
Even in Veneto, the economic crisis has highlighted the fact that the growth sources were not balanced enough. This consequently underlined the need to improve the economic performance criteria and include also the essential elements for a sustainable economic growth.
As we are informed by the manuals, the GDP growth of a region is determined by the increase of added value on goods and services provided for the internal and external market. Increases in added value due to gains in the efficiency and intensity of the capital and work in the relevant sectors can influence the employment growth. The balance at which the regional economy should aim involves ensuring, on one hand, that the goods and services provided have a competitive price and, on the other, that the received salary enables the workers to have a good quality of life.
The increase of productivity is essential for obtaining a higher salary without losing competitiveness. It is also the main source of GDP per capita growth and is expected to become even more so with the decline of the working age population share in the more advanced Countries. (Table 10.1.1)
According to literature, the growth in GDP per capita can be divided into: variations of the work productivity, employment rate and working age population percentage out of the total. From a study of the European Commission (Note 4) it can be inferred that in the period 2000-2007, the GDP per capita for the total EU regions grew by 1.8% per year and the productivity increased by 1.4% per year, contributing to the growth by almost 80%. Employment increased by 0.4% per year contributing to the growth by 20%. The percentage of the working age population remained largely unvaried. In the regions which are economically much more behind it appears that productivity increased more than in the EU average. This is because they are in a transition phase with a shift in terms of product and employment from less productive activities to activities with higher added value. Consequently, the employment in this group has only risen by 0.2% per year contributing only 7% to the total growth in GDP per capita. On average, the young population percentage in these regions is higher compared to the rest of the EU. This has resulted in the increase of the working age population percentage out of the total despite an overall decline.
However, in the regions in transition, the employment rate variations have contributed more than productivity to the GDP per capita. On the other hand, the growth in the economically more advanced regions which include Veneto has been almost entirely produced by the increase of productivity, whilst the fall in the percentage of the working age population, a sign of demographical aging, led to a slight decrease in GDP per capita growth. This therefore proved that the most important growth factor was in the regions with the best performance productivity. Obviously, growth was brought on by the balancing of productivity development and employment maintenance. Therefore, a socially fair indication for increasing the growth should be based on the methods of productivity increase.
Amongst the growth sources of work productivity, the European Commission indicates the combined effects of the improvement of the sector productivity (innovation) and the shifts among sectors (renovation). (Figure 10.1.2)
From the analysis carried out it can be inferred that in the majority of the 12 EU regions, the core of the European Union, an increase due to the first factor or the introduction of technically more advanced and efficient production and organisation methods occurred.
Innovation in the broader sense of the term, including investments in R&D and optimisation of technologies and existing resources as well as new organisational management techniques, is consequently an important source of competitiveness. On the other hand, the renovations should shift employment toward more productive sectors, or to a higher added value. The transition from farming to industry has obviously been more marked in the less developed European regions; in the more economically advanced regions which include Veneto the employment shifts among sectors were minimal. Therefore almost 90% of the productivity increase derives from the sector productivity growth. In these regions which already have a larger employment rate in the sectors with high added value the employment shifts which should mainly take place on the sector level, for example from less technological to more high-tech sectors, or from industry to services, financial services in particular and businesses. (Table 10.1.2.)
The aim of the following chapter is to understand the methods with which Veneto businesses can increase their productivity using the analysis of renovation in terms of productive specialisation, innovation growth and increase in the knowledge of human resources within the business.

The configuration of the production system is under continuous progress, even more so during the period of instability that the Italian businesses are experiencing. Understanding which transformations have interested the Veneto production system over the last years can enable the recognition of medium-term dynamics and help show the scenarios and opportunities which open up for Veneto businesses and their development models.
With regard to this, we considered it useful to analyse the structure and transformations of the regional entrepreneurship by dividing the time scale stretching from 2005 to 2011 into three two-year periods. These are the pre-crisis situation, the current stage of the recession and the last two-year period of partial recovery followed by the serious sovereign debt crisis. The changes were studied on the basis of business structural factors such as the legal status (Note 5) and the prevailing economic activity sector (Note 6). Also considered were internal specific production sectors relating to sectors with high technological and knowledge content which should constitute one of the main strong points of advanced economies. For this purpose, a classification which groups all the industrial manufacturing sectors into four classes determined on the basis of type of activity, technological intensity, and production and market features was used. It was based on a processing of Pavitt's taxonomy (1984) (Note 7): these are the "traditional" industry sectors, sectors characterised by "specialised offer", a "high research and development intensity" and with "high economies of scale".
In order to understand the tertiary sector's changes in knowledge content we also wanted to study the transformations of activities on the basis of the classification which groups the services (Note 8) into four classes determined on the basis of type of activity and the knowledge content, using an Eurostat/Ocse (Note 9) classification: technological services with high knowledge content or advanced technology, technological services with high knowledge or market content, financial services and other services.
A further examination regards the transformations of the exchange of goods on foreign markets in the same time scale: with reference to this, export values regarding the geographical area of destination and the product category have been analysed.
The indices of structural changes (Note 10) must not be read on the basis of the numeric value they are awarded, but with regard to their sign (+ o -) and trend. The structural change index will therefore be awarded positive values when the time interval considered raises the diversification of activities in relation to each of the analysed characteristics. Those we calculated allow us to recognise a continuous growth in the diversification of the Veneto production system, give details on dynamics which are already underway but also on new trends: between 2005 and 2011 a differentiation of production activities occurred with changes to the relevant importance of the sectors in line with the Veneto production transformation, which sees certain important traditional sectors giving way to newer sectors with higher technological intensity and knowledge contents.
After an intensification of the re-organisation processes of the Veneto production system which was witnessed up until 2009, a slight decrease in the speed of this trend was noticed in the last two years with the exception of technological intensity; in any case, the values still remain positive for all the features, showing the continuous evolution. (Figure 10.2.1), (Figure 10.2.2)
From this, we note that the more traditional manufacture with low technological content is particularly subject to a slow but continuous reshaping, passing from 9.4% of the Veneto businesses in 2005 to 6.4% in 2011. On the other hand, the manufacturing sectors characterised by a specialised offer increase, in clear contrast with respect to the general trend of the manufacturing, from 1.8% of Veneto businesses in 2005 to 2.9% in 2011 (Note 11). The importance of these "strategic" sectors in the regional production system is above that of the national average, which in the same year showed the manufacturing activities characterised by a specialised offer covering 2.1% of the Italian active businesses.
Similar is the behaviour of tertiary sectors with high knowledge contents which recover the share of active businesses to the detriment of other sectors. In fact the technological and market services with high knowledge content in Veneto, for which 11.8% of active businesses were recorded in 2005, reached 14% in 2011. In the same year in Italy 12.4% of the businesses performed activities with high knowledge content services.
The strategic purpose of the advanced tertiary sector in Veneto is also confirmed by the first observation results of the Osservatorio permanente sui servizi innovativi e tecnologici del Veneto (Note 12). The data confirms the relevance of innovative and technological services in our region and the importance of their role in support of the same Veneto entrepreneurship. The businesses are in fact their main clients since 80% of the segment's total income is actually produced through relationships with other businesses; the remaining 13.5% is acquired for P.A. services and 6.1% is for activities requested by private parties. (Figure 10.2.3), (Figure 10.2.4)
This transition towards a new structuring of the regional production economy also involves the legal status of the business: we observe changes in the importance of different company types, with a shift involving sole traders which are gradually decreasing compared to corporate companies, even if they remain prevalent. In 2011 in Veneto, there are still 59.3% of sole traders but the corporate companies have reached 18.2%, four percentage points above that of 2005 (14.2%). (Figure 10.2.5), (Figure 10.2.6)
The trend for the re-organisation of Veneto production system can be also inferred by turning attention to the subset of Veneto businesses on the foreign markets, by analysing the sales flow abroad. It is necessary to consider that such businesses belong almost exclusively to the manufacturing sector and consequently represent a particular segment of the businesses analysed to date.
From the perspective of the sales exchanges on foreign markets, the re-organisation of Veneto production and the related marketing implies a clear trend for the diversification (Note 13) of the end markets (Note 14) for goods coming from the Veneto region: the exports to the European Union which is the first market for Veneto products reduced from 61.6% in 2005 to 59.1% in 2011, as well as the exchanges to North America which fell from 10% to 6.8% in the same time period. The market flow towards Asia, Latin America, Switzerland and Turkey sees an increase despite the fact that shares are still small in some cases.
On the other hand, the analysis of the export trends for product export sectors (Note 15) shows changes in specialisation which causes Veneto businesses to focus on the production of certain goods in the last two years; in the 2009-2011 period, however, the structural change index of exports took on negative values on the basis of the product category. In the observation period the growth is considerable for the export of mechanical products (20.2% in 2011), metallurgy (12.1% in 2011) and food (8.9% in 2011); fashion which is one of the most important production sectors in Veneto continues to slowly lose foreign market sales, falling from 21% in 2005 to 17.6% in 2011. Chemical industry products and minerals lost around one percentage point in the same period, falling below 11% in 2011 similarly to the reduction of exports for means of transport (6% in 2005 and 3.8% in 2011).
We have therefore seen how the Veneto entrepreneurial system has been subject to some structural transformations over the years which were already present before the economic crisis which broke out in 2008, and are still apparent today. At a time when the growth of an area like ours is driven by foreign demand, the sales focus on made in Veneto leading products allows exports to continue to support the regional economy today.
At the same time, the diversification of economical partners for Veneto goods allows the subsequent diversification of risks and opens up new opportunities offered by emerging economies which are growing rapidly.

During this historical period innovation represents a fundamental strategy for directing mature economies towards recovery and once and for all leaving behind the difficult moments of crisis which negatively impact on investments and competitiveness. In the same Europe 2020 Strategy, the priority axis "smart growth" promotes understanding and innovation as driving motors for our future growth and requests the continued monitoring of the parameter concerning the Research and Development (R&D) expenditure in relation to GDP. Major investments in research and development would in fact allow not only to stimulate the growth in the medium-short term, but would provide a way, in times of economic recession, to spark off an anti-cyclical effect in the favour of local economy: the Countries which have increased their research and development investments have greater chances of getting out of the crisis because they have taken measures to fight against the depression on the economic activity.
The European Union is moving steadily towards its own method, investing 3% of the GDP in R&D: in 2009 the EU expenditure in R&D reached 2%, still retaining a distance from the major world competitors (the United States and Japan), but in the same year 23 Member States managed to maintain or even increase their own R&D expenditure.
In 2009 in Italy 1.26% of the Gross Domestic Product was directed at research activity; this value constantly brings our nation closer to the national objective fixed for 2020 which is 1.53%. The distance from the target is therefore constantly reducing for Italy as it is only 0.3 percent points below the threshold.
Amongst the main European Countries, Finland, Germany and Sweden also show a reduced distance from the fixed objective whilst the Czech Republic and Denmark already achieved the 2020 target in 2009 (Figure 10.3.1)
There are many facts showing that the introduction of innovation is not necessarily connected to research and development activity: it is in fact estimated that one out of two innovating businesses in Europe does not carry out any R&D investment (Note 16). Therefore, the measurement of innovative processes is extremely interesting. They show much less homogeneity within the European Union: in fact the innovative potential, synthetic indicator calculated by the European Commission on the basis of the level of technological innovation and the assimilation and divulgation of innovations varies from region to region. Some Northern and Central-Western European regions are the 'big innovation generators', qualified by important investments in research, innovation and accumulation of specialised human capital. The indicator describes Veneto as a 'weak assimilator', a region which is moving towards the levels of the first group. A rising of the education levels of its workforce to reduce the amount it is behind other majorly innovative regions will be indispensable. (Figure 10.3.2)
The effect of research expenditure on the GDP in Veneto continues to increase even in 2009, reaching 1.8%, a percentage below that of the national value, but in continuous growth since 2005.
The expenditure composition also shows that almost 2/3 of this can be traced back to the private sector, which in the last year however, recorded a slight reduction in expenditure compared to that of 2008. In the year most influenced by the global crisis, even the public sector shows a negative variation of -3.5%, whilst universities and private not-for-profit institutions recorded an increase in expenditure in the same period, of 9.8% and 5.8% respectively.
In 2009 the total expenditure for research and development in Veneto increased to 1,530 million euros, placing our region at fifth place in the Italian regions' ranking after Lombardy, Lazio, Piedmont and Emilia Romagna. In the research and development field for the Veneto region there are 21,619 full-time employees which corresponds, in relation to the population, to 4.4 per 1000 inhabitants. This value is just above the national average of 3.8 employees per 1000 inhabitants. (Figure 10.3.3) (Figure 10.3.4)
The total expenditure in R&D of companies in Veneto is equal to 981 million euros; 86.8% comes from businesses with a registered office in Veneto and 12.8% from businesses with a registered office outside of Veneto but which carry out research activity also within production units located in our region.
With regard to the total of, Veneto and non-Veneto businesses, the most involved economic sector is manufacturing from which over 70% of the expenditure originates. The second sector interested in research is sales. In fact, 14.2% of research expenditure is carried out by companies classified as belonging to the sales sector because these businesses perform both production and distribution activities but since they achieve a larger income from the latter, they are classified in the sales section. The other relevant economic categories concern the information and communication services and the professional, scientific and technical activities.
It is deemed appropriate to go into detail on the internal manufacturing sector which is more interested in raising its technological content. 25.7% of the research expenditure in manufacturing in Veneto come from mechanical companies, followed by the entire textile, clothing, leather and accessories sector, optics and electronics, chemistry-rubber-plastic and metal sectors, with expenditure shares rising from 9.3% to almost 18%. (Figure 10.3.5), (Figure 10.3.6)
The breakdown of the manufacturing sector's expenditure by technological intensity of the business activity allows the observation of how over one third of the R&D expenditure of the manufacturing businesses are carried out by businesses belonging to sectors characterised by "specialised offer", which are mainly mechanical, optical, electronics and metallurgy sectors. 28.3% of R&D expenditure in Veneto originates from businesses belonging to "high economies of scale" and 8.5% of the Veneto expenditure is due to activity officially known as "high R&D intensity", first amongst all the optical and electronic activities related to the production of medical equipment. It is interesting to observe how even the "traditional" industry sectors are always good research investors and in fact contribute to 28% of the total R&D expenditure.
However, as regards the breakdown of R&D expenditure carried out by the tertiary businesses (Note 17) by knowledge content of the business activity, a recorded 42.3% of the expenditure comes from technological or market service businesses with high knowledge content: the related sectors mainly concern the business services; information and communication services in first place, followed by professional, scientific and technical activities. (Figure 10.3.7)
In further detail, products from the pharmaceutical industry primarily emerge from the total amount dedicated to development or improvement of products and production techniques. 12.2% of the expenditure is directed to this industry, followed by 7.7% to the textile industry, and by 6.5% to clothing, 6.2% to the manufacturing of electrical equipment industry, 4.2% to the manufacture of vehicles, 4% to mechanics and 3.8% to the food industry. Compared to the previous year's situation, in 2009, the year of the economic crisis, it can be observed that the traditional "Made in Veneto" sectors, considered by many to be "mature technology" sectors, from then on, are regaining ground in research and design for a continuous evolution and improvement of the product. (Figure 10.3.8)
In 2009 there are around 1,200 businesses with an office in Veneto investing in R&D, with an average expenditure of around 750 thousand euros per company.
55% of the investments come from businesses with an income above 50 million euros, Another 22.5% come from businesses with an income class between 10 and 50 million euros. Another 9.7% from those with an income between 5 and 10 million euros.
The R&D expenditure of Veneto businesses is attributable by 98% to corporate companies and, from a size perspective, well over half come from businesses with more than 250 employees. Obviously, the volume of investments is proportional to the size and income, but it must be highlighted that almost 86% of Veneto businesses that invest in R&D belong to the Small and Medium Enterprises (Note 18) category, which, in terms of expenditure, contribute by 42.2% to the total growth. (Figure 10.3.9), (Figure 10.3.10)
It is interesting to monitor the research in the areas which are more innovative and have larger technological content: energy, bio and nanotechnology.
In 2009 Veneto businesses invested over 58 million euros in research in the energy sector amounting to 6.5% of the total R&D expenditure. With regard to research in biotechnologies, around 4 million euros were spent by Veneto businesses and the expenditure in the nanotechnology sector increased to 11 million euros: the main research areas were the applications of nanotechnologies in the medical-health field and in the life sciences sector, the development of nanomaterials and the use of nanotechnologies electro-chemical processes.
The intangible capital and the creation of value for maintaining competitiveness in the global market
Enhancing intangible capital, like human resources and research, is a crucial component for the development of our area: the objective of moving closer to the technological front requires a more qualified workforce, whose intellectual capacity must guarantee a development of scientific and technological knowledge in Italy and Veneto. Some progress has been made from the early 2000s until today: the number of 20-29 year old science and technology graduates per 1000 inhabitants in Veneto rose from 6 in 2000 to 10.7 in 2009; similarly, the number of graduates amongst the employees inside the work market rose by 4 percent in 5 years reaching 14.4% in 2009. Less positive is the data related to the resort to lifelong learning, decreasing slightly between 2000 and 2009 and to the burden of public expenditure for education on the GDP which is stabilised on the level of 10 years ago.
Efforts for improving human capital are contributing each year to regaining an increase in research investments and of technological content of productive activities in the Veneto region; the patent intensity also increases in the same time period, from 11.7 to 12.5 patents issued per 10 thousand inhabitants in Veneto. With the purpose of helping Veneto businesses face the challenges of global competition, the Regional Administration is maintaining a constant commitment to sustaining the businesses in terms of infrastructure and digital services like broadband and cloud computing, in such a way which transforms their way of staying on the market and creates new opportunities. (Figure 10.3.11)
The challenge of investing more in knowledge remains a priority even in the presence of the current significant weaknesses of the economic cycle, even more for the businesses which operate on the international market due to the need to protect their competitive advantage. Combining the statistics archives of Veneto businesses which carry out research and those that export their products abroad with a third databank relating to their balance sheets, we are able to provide an assessment of these businesses in terms of size classification, expenditure, income and cyclic progress (Note 19).
Businesses which invest in R&D share some characteristics with those that operate abroad, or have larger dimensions in terms of employees and total income and are more structured than average. With regard to the class of foreign income we have the prevalence of research investments by large exporters: a quarter of the traders with a foreign income class above 10 million euros covers 63% of the expenditure, whilst the small traders with foreign sales less than 5 million euros account for more than half, covering 25% of the expenditure.
Does research pay off in terms of profitability? With respect to the average trend of all the manufacturing sector in the Veneto region, traders performing foreign operations and investing in R&D had a greater chance in the expansion period (2012/2009) with 66% of them increasing their income in 2010 compared to 58% of the entire manufacturing industry. In 2010, even the main capital profitability indices, as well as the resort to debt, compensated for the loss recorded the previous year. (Figure 10.3.12), (Figure 10.3.13)

The emerging of the "economy based on knowledge", already present in the Lisbon Strategy and recovered by Europe 2020, indicates that the human capital has become the key to international competitiveness.
Even within a company, the development of human resources is a factor providing an extraordinary opportunity for success: the intangible elements of the company wealth are included in the human capital; the level of education which the employees have, their know-how, their professional qualifications, the expertise, are all factors that we do not yet know either how to measure with standard criteria or handle in terms of money. Nevertheless, they certainly influence the results of a business.
Amongst the weak points of the businesses, aside from their small size, family management is often cited, lacking a management structure which is able to guide the company with competence away from the difficulties of an increasingly globalised market. From the official statistical data provided by the Istat survey on workforces it has been possible to observe whether something changed in the organisation of company staff over the last five years. (Figure 10.4.1).
In Veneto between 2005 and 2010 the employees in the total production sectors increased by 2.4%, i.e. almost 50 thousand jobs were created, but the employment growth is differentiated according to the sectors of activity, professionalism and study qualification of the worker.
In Veneto the continuous shift of the workforce from agriculture and industry towards services can be witnessed and the tertiarization results in a growth of the employed and freelance section to the detriment of the self-employed artisan-type workers, 6.9% and in parity to the factory workers, 0.6%.
On a national level the same trend appears, even if the reduction is less marked in agriculture and more intense in industry in the strict sense and the building and sales sectors record an inverted trend (+0.9% in building against -1.6% in Veneto; -1% in sales against +1% in Veneto).
Looking in more detail at the professional qualifications in Veneto, over the course of five years a 1% increase in the number of directors concentrated in the industrial sector was observed. The rate value appears low in the globalisation context but it is highlighted that the trend was growing significantly between 2005 and 2008 at an average annual rate of 2.6%. The crisis reduced the use of such professional qualifications by 24% in 2009 and by 9.4% in 2010. Due to this, over the five years a reduction of the managers (-8.4%) was shown and was spread over all the analysis years.
The freelancers, despite even them being subjected to a loss in 2009 which was a bleak year for all the professions, increased over the course of the years by over 9 thousand units (+10.7%). The most important increase was recorded in 2010. This trend shown along with the data relating to the directors seems to indicate that the more qualified class of workers which was sent away by the company came back as consultants. The employees increase by 17.9% and this progress spread to all the economic sectors. The number of workers rose from 2005 to 2010 (+0.6%), but had a fluctuating trend which ended with a fall of 6.1% in 2010. The industry sector was hit hardest.
The national level does not follow an identical trend: in the course of the five years a total drop in the number of directors of 7.3% was recorded and concentrated in the last two years; the freelancers increased but proportionally in smaller percentages; the factory workers increased by 1.4% between 2005 and 2010, only suffered a slight reduction in the last two years.
In the specific Veneto industrial area the most evident transformations in the professional profiles in the company are noticed: in 2005 1 director for every 74 factory workers, 24 office workers and 3 managers; in 2010 the proportions change; there is 1 director for every 42 factory workers, 16 office workers and 1.5 managers. The ratio between office and factory workers changed less over time: passing from 3.1 factory workers per office worker to 2.5 factory workers per office worker. If, however, we group directors and managers together we see that the ratio with the number of factory workers does not change: there were still 18 in 2005 and 2010. This suggests a larger posting of managers of which in 2005 there was 1 for every 24 factory workers and 8 office workers and in 2010 1 for every 32 factory workers and almost 13 office workers.
Analysing the professional qualifications in relation to the study qualification of the worker we are trying to understand whether the work world is becoming structured on the basis of cultural expertise and whether the latter is used in a coherent way within the company. Between 2005 and 2010 Veneto employees significantly improved their cultural preparation: graduates increased by almost 61 thousand units in total and represented over 15% of Veneto workforce. Half of the workers possessed a senior high school diploma. (Figure 10.4.2)
Over the course of the years in Veneto, a continuous increase of office and factory workers with degree was recorded, something which does not occur for managers and directors in all the sectors. Between 2005 and 2010 in Veneto the number of graduate directors decreased by 6.6% (-11.7% in Italy) and graduated managers reduced by 8.5% (+3.1% in Italy). It is likely that the already noted increase of freelancers establishes itself as an offer of highly qualified knowledge in outsourcing, given that in five years the number of graduated consultants grew by 15.7%. It is true that these considerations apply to the whole of the agriculture, industry and service sectors, whilst by looking at empirical evidence we can confirm that in the specific industrial section the number of graduated directors increased.
If the number of self-employed workers in Veneto decreases, their cultural level rises: over the five years graduates increased by almost 10 thousand units. This anticipates a new conception of the self-employed activity, separated from the type of work once considered "manual/hand-crafted" and now instead aiming at the development of creativity in the more various areas of design, communication, technology, innovation, new forms of agriculture, etc.
In short, it can be affirmed that in Veneto the cultural heritage of the workers has definitely increased, but not on all levels. It seems that we find ourselves faced with a sort of assignment of workers to positions requiring fewer skills than they are capable of due to the presence of many graduates with "basic qualifications". However, at the management level the choice of resorting to the outsourcing of culturally higher qualifications seems to prevail. It is in fact assumed that the company management level guarantees the required managerial expertise, which is the result not only of personal skills guided by 'innate' individual talent but also the study of regulations and tools that can be coded and consequently are the result of degree courses.
The other element that emerges is the cultural change of graduates that prefer to seize the opportunities provided by an open market and offer themselves to the work world as freelancers or self-employed workers instead of aiming for a fixed job.

Business is one of the strengths that can contribute to Italy's re-launch. In order to return to grow, reduce the unemployment rate and give a new impetus to the development it is necessary to invest in new ideas, energies and businesses.
The future of the younger generation, their success and failure will depend on the ability of the system to direct them towards entrepreneurship, to cultivate their enthusiasm, optimism and motivation of making on their own and making with others. The new measures proposed by the Monti's government seem to be going in this direction.
The first part of the Liberalisation Decree approved by the Monti's government in the Official Journal of 24th January 2012 is mainly focussed on professional orders and business: measures for the simplification of economic activities, Srl (limited companies) simplified for young people who want to become entrepreneurs settlement of overdue bills for the Small Medium Businesses that are in credit with the Public Administrations for reducing the PA's delay in payments, new protection measures for micro businesses and a long list of interventions regarding professions (taxi, pharmacies, lawyers, notary publics), banks and insurance (current accounts, car civil liability insurance).
Article 3 in particular provides interesting news for young people who want to try the entrepreneur career: a new simplified form of Srl (limited companies) for young people below 35 years old, which requires a simple certificate incorporation deed and a corporate capital of just one Euro. In practical terms, young people can establish a company without the need for a notary public and with just one Euro instead of 10 thousand Euro which are required for a normal limited company. Furthermore, they will be exempt from the obligation of paying at least 25% of the capital as a type of protection. It is however expected that when a member exceeds the age requisite of 35 years, he will be expelled if the meeting of members does not immediately take measures to carry out the transformation of the company.
The initiative intends to promote business activities for the under 35-year-old young people and shall be applied above all in the small services companies. The "simplified limited company" will prove to be an interesting tool even for young professionals who, taking advantage of Monti's liberalisation, decide to establish a corporate company. It is interesting that this facility does not require any state contribution or financing that cost the community much more than the advantage it obtains.
Other measures regarding the new businesses are recorded in Article 90 "interventions to favour the flow of venture capital towards new businesses (Note 20)". Actually, it concerns a series of small modifications to what was already set by the July financial measures (Article 31 of the decree no. 98 of 6th July 2011 as implemented by law no. 111 of 15th July 2011) for financing the growth of new businesses via funds for the venture capital investing at least 75% of the collected capitals in unquoted companies in the experimentation phases (seed financing) establishment (start-up financing), start of the activity (early-stage financing) or product development (expansion financing).
With regard to that proposed in July, these funds no longer have to be EU harmonised.
In 2011 there were 33,867 people under 30 years old holding a position in a Veneto business, 4.6% of the total of the people involved; this value showed Veneto at a slight disadvantage compared to the national context, which sees the same group of young people occupy 5.5% of the total employed people in Italy. It was actually partnerships and sole traders that hired the largest amount of young people: 82.1% of the individuals less than 30 years old employed in Veneto companies and active in sole-trader companies (42.9%) or partnerships (39.2%). These two types of companies are probably the most popular among young entrepreneurs because of the fact that they are the most simple and less burdensome forms today and probably respond better to the demands of those entering into the job market for the first time. For example, this could be a business with limited dimensions dealing with hand-crafted instead of sales activity. In fact 22.1% of young people were employed in the field of sales, but a good percentage was also recorded in manufacturing sector, 10.3%.
Although the economic difficulties in the last two-year period delayed the establishment of new enterprises in Veneto, there were 30,576 newly registered in 2011 and excluding the sales sector, notoriously characterised by a strong turnover, there were 25,280 newly born enterprises.
From a territorial point of view, the areas more favourable to the development of new entrepreneurial ideas seemed to be the provincial capitals and their surroundings, the entire Adriatic coastal area, the municipalities at the foot of the mountains and more generally the central strip of Veneto. (Figure 10.5.1)
In short, the innovative ideas and the desire to enter into play are not lacking, but in a competitive market such as the one today the method and financial resources are also fundamental. As a result, the new businesses are becoming increasingly more reliant on the startupper networks than on the idea incubators. Today the startuppers are communities in continuous movement which use new technologies, social networks and specialised forums in order to compare and favour the meeting opportunities for innovative ideas and possible financers. There are thousands of members of the various idea development communities on the web as well as groups active on Facebook which organise meetings dedicated to the presentation of their business ventures. Moreover, the Veneto universities participate in the "Start Cup" project. This is a Business Plan Competition that awards ideas of innovative businesses with prize money, inviting young people to show their own entrepreneurial ideas in an informal way to successful entrepreneurs available.
The survival rates are a useful indicator not only of the performance of the newly born enterprises, but also of the area providing a background favourable or not to the development of economic activity.
Analysing the percentage of businesses with employees which were still active in 2009 three years after the establishment which took place in 2006, Veneto was shown to be one of the regions with the highest survival rates: 65% compared to the national average of 62.1%.
We have attempted to thoroughly examine the matter in the Veneto area in order to work out whether in the recent past it has been a fertile zone for businesses established there. Moving away from the considered period by a couple of years, between 2004 and 2009 it was observed that the survival rate in 2009 of the businesses established in 2004 remained close to 54% in all the sectors. In other words, five years after the establishment 54 businesses out of 100 were still active. This percentage was greater in the industry sector in its strict sense (57.1%) in the services excluding sales (55.9%) whilst it was smaller in the sectors with the greatest turnover: building (50.9%) and sales (50.9%). The rate at one year after the establishment was generally very high; it is necessary to highlight that the rates of the companies established in 2008 were relatively lower, further proof of the particularly unfavourable economic situation in which they found themselves taking the first steps.
Also in consideration of this five year time span, the solidity of Veneto business in relation to the national average was inferred: in Italy around half of the companies established in 2004 were still active in 2009.
In terms of provinces, the survival rate was not significantly lower than the Veneto average. Only the Padua and Belluno provinces were positively differentiated. (Table 10.5.1)
The average size of businesses with employees both in the year of establishment and in the following years, constituted an important indicator of performance, able to show the growth of the businesses in terms of employment.
The businesses with employees which were still surviving five years after the establishment recorded an increase in average size from the initial value of 1.5 employees in 2004 to that of 2.3 in 2009 (Note 21).
In the industry sector in the strict sense a larger size at establishment was observed and a larger growth in the five years of survival analysed (from 2.3 to 4.2 average employees); in the tertiary sector, on the other hand, a lower average size either at establishment (1.4 employees) or after five years (2.1 employees) was recorded. It must be highlighted that, on the whole, in 2009 the size growth experienced a slowing down in comparison to that of 2008 and this trend which was clearly present in all sectors assumed a greater intensity in industry and building. (Figure 10.5.2)
From the employment point of view, the increase in the average employees number per surviving business does not compensate for the mortality of the business taking place in the period: the businesses established in 2004 and surviving in 2009 employed around 30,700 employees against the 34,900 which were employed by all the businesses established in 2004; 12% of the total staff is lost. The only sector recording an employment increase in relation to its year of establishment was industry in the strict sense (+13.1%); all the other sectors recorded a negative value with respect to that of 2004. It is clearly true that the loss of employees coincided with the international crisis emerging in 2008 in all the sectors excluding sales. (Table 10.5.2)
Placing the total employment recorded in 2004 by the cohort of businesses established in that year at 100, it is noted that the businesses operating in industry in the strict sense and still active in 2005 recorded an index equal to 146 for that year. This value can be divided into two components: the employees present at the establishment of the survivors (equal to 94) and those hired following their development (equal to 51). This last amount which indicates the creation of new jobs by the businesses established in 2004 and surviving in the period under examination, presented a constantly increasing trend in the first two years of survival and fell slightly from 63 in the second survival year to 61 in the third. It then rose again in the fourth to 63 and decreased to 53 in the fifth year. This resulted in a total employment growth of 13.1% in relation to the establishment. The building sector created new jobs for 21% in the first year of survival and then reached 33% in the third year; in the fourth and fifth year of survival this percentage decreased (respectively by 31% and 27%) and was not enough to compensate for the employment losses: in 2009, five years after the establishment, about 80% of those employed in the surviving business were the original employees of the section.
A slight growth in sales only occurred in the first year; the number of staff employed by the surviving business did not in fact manage to compensate for the employment loss caused by those businesses that died: the number of employees in the businesses of the 2004 cohort were recorded at 89% in 2008 in comparison with the total of the employees born, which dropped to 84% in the fifth survival year. Even the employment rate created by the surviving businesses over the various years was lower with respect to the sectors analysed, and was equal to 15% in the first year. This grew slightly in the following years until it settled at around 29% in the fifth year of survival. Finally, even in the sector of the other services the creation of new jobs in surviving businesses was only sufficient to compensate the employment loss caused by businesses that did not survive in the first three years. In the fourth survival year the employment decreased by 6% whilst in the fifth year the employees of the surviving businesses constituted 86% of the original employees of the businesses established in 2004.
On the national average, the total employment loss of this panel of businesses was below that of Veneto (-10.5%) but the decrease had a similar sector trend. Also on a national level the only area which experienced growth was industry: +14%. (Figure 10.5.3)
Two indicators proposed by Istat (Note 22) as business trend indicators: the "high-growth" and "gazelle rate", both based on employment growth were also considered. In fact not only the recently established businesses but also those that showed a rapid employment growth in a relatively short period carried the important "entrepreneurial values" or created "new value".
The two measures of "entrepreneurial performance", the business "high -growth" rate and that of the "gazelle" businesses are calculated on the basis of a precise OCSE-Eurostat definition: «"high growth" is defined in terms of employees all the businesses with at least 10 employees at the start period which recorded an average annual growth in terms of employees of more than 20% over a period of three consecutive years». All the businesses for which the growth in terms of employment was due to transformation events (purchasing/closure of company branching) were excluded from the high-growth. Also excluded from the high-growth calculation were the businesses established in the year of the start period. The threshold of 10 employees was adopted in order to avoid the introduction of possible distortions which would essentially emphasise the growth of smaller businesses. The same definition identifies the "gazelles" as the subset of young "high-growth" businesses, that is to say being 4 or 5 years old maximum. In Veneto in the years between 2005 and 2009 the high-growth rate is maintained between 2.7% and 2.3% in 2009, a year that clearly already feels the effect of the international recession. This means that in 2009, 23 businesses out of 1000, including those with over 10 employees, had an annual employee growth over 20% per year for the last 3 years.
The gazelle rate changed in value from 0.4% in 2005 to 0.2% in 2000: in 2009 2 young businesses out of 1000, established at a maximum 5 years previously and with over 10 employees, increased the number of their employees by 20% each year from 2007 to 2009.
Both of the rates are in line with those of the North East, but slightly lower in Veneto in relation to the national average and lower on the whole compared to those of the territorial division including the South and the Islands. This may have been due to the greater diffusion of businesses in the North East which dispersed the employment growth, but also the greater presence of manufacturing activity which recorded lower performance rates than those of the other economic sectors. (Table 10.5.3)
If the same indicators were calculated on the basis of the growth of sales as well as employment, the values changed level, clearly maintaining the same trend. In the years from 2005 to 2009, in Veneto the high-growth rate increased from 5.4% in 2005 to 9.3% in 2007 and fell to 3.4% in 2009. This means that in 2009, 34 businesses out of 1000, including those with over 10 employees, had an annual sales increase of over 20% in 2007, in 2008 and 2009. That of 2009 was the lowest value of the historical series and more than halved with respect to that of the previous year when there were 79 businesses out of 1000 to have increased the income by a rate superior to 20% for three consecutive years.
The gazelle rate calculated on the income changed in value from 0.6% in 2005 to 0.3% in 2009. Even in this case a slow in the percentage rate could already be observed in 2008: in 2009 3 young businesses out of 1000, born a maximum of 5 years prior and with more than 10 employees, had increased their minimum income by 20% each year from 2007 to 2009.
Also with regard to the income, the Veneto and North East rates were lower than the national level and particularly lower than the South and Islands. (Table 10.5.4)