In an economic climate that is under considerable strain both nationally and internationally, businesses need to be able to consolidate their competitive position if they are to perform better than the sector average, or simply to survive. These goals can be achieved by continuing the minor, yet in some cases radical, structural changes that have swept Italian businesses over the last few years.
In 2008 the number of active businesses in Italy rose by 2.7% on the previous year, the highest annual growth in the last decade. It should be remembered, however, that last year's national figure bore the effects of changes made to the Rome Chamber of Commerce's Business Register in 2008.
Analysing the births and deaths of Italy's active businesses gives a glimpse of how worsening markets have affected them: the failure rate is a little higher than the start-up rate, which produced a 0.4% drop in the business population. This reduction in Italy's businesses is due to a continuing process of selection. This process concerns both sector, where agricultural and industrial businesses are an increasingly smaller part of the total economy, and kind of ownership, where there has been a slow but continual resizing of sole traders (-0.5%) and an increase in partnerships, and in corporations in particular (+16.3%).
It should be noted, however, that the cessation indicator gives only a partial indication of the ability of businesses to stay on the market in that bankruptcy procedures in Italy last almost 7 years on average. It is, therefore, likely that the effects of the international credit crunch, which blew up at the end of last year, will drag on for several more years, spreading out, sometimes in patches, over the long term.
Business sectors are being restructured, a trend that has increased in recent years, with the result that the economy is heading down the well-trodden path of tertiarisation. In 2008, the highest annual variations were in the energy sector (+22.5%) and in a range of sectors covering business and personal services. Over the last year, the health sector has grown by 8.7%, business services by 7.5%, education by 6.6%, and hotels and catering by 5.7%. There was almost zero growth, however, in transport and fisheries, while active businesses in the agriculture sector fell by more than two percentage points.
In 2008, Central and North-West Italy made the largest contribution to the growth in Italy's business population. The regions that grew most when compared with 2007 were Lazio (Note 1)
, Lombardia, Toscana, Liguria and Piemonte; a major rise in the number of businesses was also experienced in Campania, which stood out from the rest of the southern regions where growth was on average lower than the national trend. There were less encouraging variations in two regions of North Italy: Valle d'Aosta and Friuli Venezia Giulia had negative variations when compared with the previous year's figures. (Figure 3.1.1)
The demography of Veneto businesses in 2008 closed on a positive note: the number of active businesses on Veneto's Business Register increased by 2,549 units last year. When compared with 2007, growth in 2008 was equal to 0.6% when considering all sectors and reached 1.4% excluding agriculture. Although Veneto's annual growth is well below the national average and despite fierce competition, Veneto is Italy's third-ranking region for the number of active businesses with 8.7% of the national total: a value that highlights the major role the region plays.
On 31 December 2008, there were 462,567 active businesses in Veneto, a 0.75% drop in its business population (Note 2)
, 32,427 start-up businesses and 35,884 cessations were recorded in 2008. The business population in 2008 was the lowest in the last fifteen years, highlighting the first consequences of 2008's economic crisis. The figure is the result of the difference between the high number of start-up businesses (Note 3)
(7.0%) and of cessations (Note 4)
, (7.8%), with a similar trend being seen nationwide. Figures for kind of ownership in 2008 reveal a fall in the number of sole traders (the 2007 figure, 61.8%, dropped to 60.4% in 2008) while the number of corporations showed an annual increase of 7.5%, which brought their figure for 2008 to 17% of the total number of active businesses in Veneto. In Veneto's traditional sectors, commerce and real estate were hit hardest by the stagnation, especially regarding their share of Veneto's overall economy. The former recorded practically zero growth, while the latter grew by one percentage point last year, the lowest in recent years, which confirms the slowdown in growth of this sector in Veneto.
The highest increase in active businesses was in the business-service sector, which recorded growth of 3.2% in the last year. This figure confirms the trend of the labour force shifting towards some key activities in the service economy in a context where the trend towards long-term tertiarisation is fuelling structural changes in the economy at both regional and national level. (Figure 3.1.2)
Despite a fall in the share of value added from industry in the strictest sense last year, the growth of Veneto's manufacturing businesses in 2008 was more consistent than in services: after five years of decline, industry in the strictest sense recorded annual growth of 1.6%, reaching 66,898 active businesses, while tertiary businesses increased by 1.3% on the previous year. Veneto's fashion industry showed the most consistent developments in the region's manufacturing sector: hide- and leather-working businesses had annual growth of 6.5%, while textile and clothing businesses grew by 4.4%; behind them came vehicle-manufacturing businesses, which grew 4.9% in the last year. The food, printing and paper industries increased their population by two percentage points. However, Veneto businesses in sectors such as chemicals, coke, rubber and plastic, mechanical goods, and printing and paper, grew less than the national average. The metal industry holds the highest share of Veneto businesses: almost one Veneto business in five works in this sector. However, it grew less than the average of Veneto's total manufacturing sector in the last year. In 2008, the number of businesses in the jewellery, furniture and sports items sectors fell by 0.5% and those in the wood industry fell by 1.9%. (Figure 3.1.3)
The growth of businesses in the provinces in 2008 saw a good performance by Rovigo, which was up 1.5% on the previous year; the provinces of Verona and Venezia also grew at a rate higher than the regional average (up 0.8% and 0.7% respectively on the 2007 figure). Belluno was the only Veneto province that witnessed a fall in active businesses in 2008, recording a drop of 0.6%. Once again, the provinces of Padova, Verona and Treviso had the highest number of active businesses in the region, confirming the strong presence of businesses across the centre of Veneto. (Figure 3.1.4)
and (Table 3.1.1)
Artisan businesses maintain their key role in Veneto's economy: almost one third of Veneto's active businesses belong to the artisan production system, which is traditionally the backbone of Veneto's production.
The trend in artisan businesses, which had grown fairly rapidly up to 2007, about-turned in 2008 with numbers falling by half a percentage point on the previous year. This negative figure can be explained by the unfavourable trends in sectors with a high share of artisan businesses: building, which accounts for 41% of Veneto's artisan businesses, recorded practically zero growth last year, while there was a 1.2% fall in the number of artisan manufacturing businesses, a sector that accounted for 31% of all Veneto's artisan businesses in 2008. Commerce and transport were two other sectors in which the number of artisan active businesses fell compared to 2007, with drops of 2.1% and 3.8% respectively. It is probable that the artisan industry, which forms the weakest link in the business system in terms of structure and borrowing, took the brunt of the financial crisis. This negative year for Veneto's artisan industry occurred against a national backdrop which saw artisan production grow by only 0.3% last year, extremely low growth when compared to the total of Italian businesses which, as mentioned above, rose by almost three percentage points in the same year.