Regione del Veneto - U.O. Sistema Statistico Regionale
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Statistical Report 2013
Statistical REport 2013

Veneto in transformation: reaction and evolution

'Living things can only be if they become; can only exist if they change. Transformation and growth are qualities inherent to the life process.' (Erich Fromm, 1976).
Transformation is the hallmark with which we wanted to distinguish this year's Statistical Report, now in its tenth edition, associating it with the idea of development. If transformation is the means, the essential instrument for evolving, then development is the end, the ultimate goal for collective and individual well-being. Development can be defined as the inclination towards improving the conditions and quality of life of the population who live and work in a territory, the prospect of improving the human and natural environment, making sure it is stable and secure for future generations.
The theme chosen for this year is the natural continuation of the reflections touched upon in previous editions of the Report. Over time the Report has grown in structure, with deeper analysis and insights. Already in 2007, the theme of competitiveness was proposed within a development model, and in 2008, data processing and analysis were targeting towards the concepts of progress, wealth and well-being in the context of a focus on the quality of life. After that, regarding the issues of mobility, networks and sustainability, the tools and possible strategies were proposed for exiting the crisis and devising new growth models. Finally, last year the Report talked about opportunity, with the proposal of identifying the advantages that accompany transformation as well as the possibilities of injecting life into an economy and a society tried by the effects of rapid change; it goes without saying that transformation and development are the next steps necessary in the difficult economy that we are currently experiencing.
Thus, with this in mind we will retrace the classic areas of our Report - economy, society, environment - focusing on and highlighting the transformations that, perhaps only in essence, signal a possible change to the paradigm of development compared to the period just past. It is an ambitious goal, in view of the rapid, complex changes that are, at times, apparently contradictory to what we see on a daily basis; but we want to take up the challenge, magnifying that which reality only hints at, without the pre-tensions of predicting its end: transformation is, for all effects and purposes, a path, rather than a state. Regarding etymology, the term derives from the Latin 'transformare' formed by the components trans- i.e. 'beyond' and formare meaning 'give form'. Thus the term transformare means 'form beyond', or rather 'form into the deep', form inside'. In other words, transformation is not creation; there is already something latent that takes its shape through transformation' (Note 1).
After all, what we are currently going through is an age of radical transformation, similar to other historic moments that Europe and Italy have already faced in the past. In 1846, Karl Marx wrote, 'the economic forms in which man produces, consumes and exchanges are transitory and historical. With the acquisition of new productive faculties man changes his mode of production and with the mode of production he changes all the economic relations which were but the necessary relations of that particular mode of production'. Every area is subject to continuous change, there is a continuous reformulation of ideas, beliefs and theories, a continuous reaffirmation or rejection of norms. The 20th century has seen two world wars, which were dramatic moments of deep crisis, as well as a series of transformations in all areas, from the economy to socio-culture and the environment, unprecedented in scope and speed. Today, scope and speed are amplified by the fast interconnection of people and Countries due to telematics, means of transport and the fall of many constraints of pre-existing borders: following the theory of the butterfly effect ('when a butterfly flaps its wings in Brazil, it causes a tornado in Texas'), today, not even a generation would pass from the beating of the wings and the tornado.
There is no doubt that the current global crisis is the engine of ongoing transformations, but just describing it is insufficient. 'Crisis' in itself contains an idea of temporariness and parentheses, almost suspension. However, things continue to happen. The crisis does not only change; it expands, touching the initially immune economic sectors (from global finance to small retail outlets) and then gradually involves people, social ties, behaviours and culture, changing the concepts of citizenship, rights and economy. The crisis is not simply acknowledging that which was previously unaffected now no longer works, rather it initiates and leads to a more structured re-orientation of strategies, actions and networks, which were previously residual. The transformations we are witnessing are not only to be considered as simple 'reactions' to the shock that destabilised equilibriums reached, but in some cases they are examples of real 'pro-actions', i.e. processes that demonstrate the ability of the system to change the reality of context independently, stimulating renovation, taking unexplored paths and following new life styles and new prospects. Transformation, therefore, defined as the ability of the society and groups to change their mechanisms to adapt themselves to a scenario which is at times hostile, but in any case rapidly moving, and, during this adaption, lay the foundations of a new society and a new development model. With this in mind, the theme proposes to rediscover the resources within large sectors of the economy and society, at times not adequately utilised, recognising untapped potential and searching for those underground energies, not always obvious, to transform them into kinetic energy targeted towards a positive dynamic. When talking about energy, we have to consider young people: a society that wants to evolve must be able to reflect on its generative capacity, i.e. investing in young people and exploiting their potential and resources. Young people, who today in Veneto are 17% foreigners, have higher standards of living, social, cultural and relational opportunities that their parents did and they have invested in education and training which ensures high levels of human capital, however, it seems that young people are destined for an uncertain and very difficult future. The President of the Italian Republic Giorgio Napolitano, trying to restore confidence in young people, drew attention to the social issue of rampant unemployment of which 'we need to take charge, placing unemployment at the centre of public action, which must establish itself as being more and more active in seeking timely and effective solutions to the pressing needs of the citizens.' (Note 2))
Therefore, the difficult moment that we are experiencing can be and must be used as an opportunity to trigger a new and vital social, economic, cultural and moral effervescence, able to transform the difficulties into opportunities of new growth.
Changes to the economy during the long international crisis...
The current evolutionary stage of the economic cycle is distinguished by more discontinuity factors compared to the past and the classic Schumpeter theory of business cycles. In the last twenty years there has been a change to the socio-economic system that can be summarised in two basic elements: 'space-time' compression and financial innovations. Progresses in the world of information and communication have allowed an enormous reduction of distances in terms of time and space and a consequent speeding up of processes. People and events in distant places come into contact and interact, giving rise to global consequences; the major financial markets and stock markets are now able to move huge amounts of money in just a few minutes; the growth of real and virtual mobility favours the full integration of exchange rates and international movement of goods, services and capital. Financial innovation has led to new and complex financial instruments being offered, the risk profile of which is hard to fully comprehend. While the interconnection between markets increases, possible financial imbalances are becoming increasingly difficult to identify and the risks of adverse shocks from local contexts or specific segments of the financial sector can rapidly spread on a global level.
The combination of these factors together with the delay with which the fragilities and the interconnections of the financial markets emerged has increased the impact and persistence on the current economy of the financial crisis that exploded in the summer of 2007 in the United States.
The crisis has accentuated the effects of a transformation that was already under way, unfortunately emphasising its negative aspects rather than the profitable developments. After a slight recovery in 2010 and a 2011 in deceleration, the global growth prospects represented in the figures for 2012 were still uncertain. The strengthening of emerging Countries, the agreement reached in the United States to avoid the fiscal cliff as well as the relaxation of financial tensions in the Euro Area were all positive signs; however, Europe's industrial production continued to lose force.
... ongoing distress
2012 saw a slight improvement in the international economy in the third quarter and overall growth stood at 3.2 % for the whole year. In 2013, the sixth year since the beginning of the great international economic crisis which started in 2007, recovery will remain fragile, especially in the Euro Area and will be characterised by great diversity between the different areas and Countries. The probability of a recession remains high, especially in the Euro Area; the International Monetary Fund suggests that the expansion of global GDP will intensify in 2014. The European Union closed the year in recession, -0.3 % for the EU27 and -0.6 % for the Euro Area.
The cyclical downturn, the measures for the consolidation of public finances and the structural reforms are beginning to correct the external imbalances of some of the Euro Area Countries. Despite the progress achieved at a European level and the reduction in the fears of extreme unfavourable events, international financial conditions remain fragile. The main risk posed to financial stability in Europe and Italy is represented by the spiral of low economic growth, the sovereign debt crisis and the conditions of the banking system. The particularly high sovereign spreads recorded in several Countries due to the fears of the reversibility of the euro, if persistent, will dampen growth.
The Italian economy is going through a phase of profound difficulty, in which the structural weaknesses are exacerbated by the unfavourable economic situation. Over five years, Italy has had to deal with the financial crisis, the instability of the sovereign debt market and two deep recessions. Since the beginning of the crisis, Italy's GDP has fallen by 7 percentage points and the number of employed by 600,000 units.
In 2012 estimates, Veneto was also affected by the recession in a similar manner to the national level: the percentage decrease of -2.3% (Note 3) of GDP is only slightly better than the national -2.4 %. 2013 will represent a year in stagnation to then give way to a recovery predicted for 2014, leading to a growth of around 0.9%.
Despite economic difficulties, Veneto remains the third region in Italy for wealth production, after Lombardy and Lazio: 9.4 % of the Gross Domestic Product is generated in Veneto. The GDP per Veneto inhabitant estimated in 2012 was around 29,600 euros, 15 % higher than the national value. However, we are far from pre-crisis values, according to 2014 estimates Veneto's GDP could reach 130,079 million euros, i.e. return to 2003 levels; In 2014, GDP per inhabitant, while maintaining above the Italian average, is predicted be similar to 1995 values, almost 20 years earlier.

The economy

Transformations of the economic system
The economic history of Veneto was studied through the period 1995-2011 and during the subsets 1995-2000, years of wellness, 2000-2007, when the GDP trend started to fluctuate and finally 2007-2011, the years of the great crisis.
Considering the entire period 1995-2011, Veneto's GDP grew on average by 0.9% a year, as did Italy's. This result arrived after the strong average annual increase of the period 1995-2000, equal to 2.4% (1.9% for the whole of Italy) to which the 2000 exploit contributed especially: the 2000/1999 percentage variation was equal to +5%. The years 2000-2007 saw a growth in GDP equal to 1.3% (similar to the national figure): after the weakness of 2002 (-0.8%) good recovery was seen especially in 2004, +2.7%, until the percentage variation of 2007/06, +2%. Finally, the latest period 2007-2011 saw a reduction in wealth of 1.4%: the drop in 2009/2008 of 5.5% strongly affected the entire period.
In a territorial comparison, Veneto had the highest development of all the regions, except during the crisis period when it experience a bigger decline compared to the other economically strong regions of the North, such as Lombardy and Emilia Romagna, perhaps due to its economy which still strongly relied on manufacture and international trade, thus it was more affected by the global recession.
From the shift/share, a technique allowing the growth of added value be broken down into components that consider the contributions of various development factors, it emerged that Veneto is affected by the type of its production activities, as is Lombardy, Emilia Romagna, Abruzzo, Marche, Piedmont and Tuscany; regions that were affected by the slowdown caused by a penalizing structural composition, as wealth of activity in those economic sectors proved less dynamic and did not grow as much as others in the period of reference. Despite this, Veneto recorded an added value in the decade a little lower than the national average, thus proving to have a positive local component, behind which lies a stable productive system, able to maintain the territory at a relatively solid level of economic development compared to the National trend, fuelling a sign of strong productivity in the area.
The drivers of change: trade flows
Globalisation through the development of trade and production flows has become a motivating factor for the competitiveness of the territory and opening up to foreign markets is considered one of the pillars of regional economy. At a national level, the three regions which contributed the most to the growth of foreign sales in the last twelve years, explaining over 55% of the increase of national export, were Lombardy (+27.7%), Emilia Romagna (+16.4%) and Veneto (+11.5%).
The changes that have taken place over the last twenty years and most influenced the structure and operation of businesses were the reduction of trade barriers and the revolution of logistics and communications. Therefore businesses had to start operating in a much more integrated manner on a global scale, whilst those that operated on a purely local scale found themselves in distress.
This has led to profound changes in the dynamics of international trade flows, both in terms of sector and geography. Trade expansion is strongly associated with strong growth in the export of manufactured goods, particularly in production with high technological and knowledge content. Furthermore, the increase in the fragmentation processes of production cycles among more Countries has led to a growth in the trade of intermediate products and instrumental goods. The significant growth of some emerging Countries has led to a shift of world trade that has generated a new equilibrium of global wealth distribution. The formation and dissemination of international production networks has allowed some new emerging economies to notably increase the technological content of their exports. This process has led to the export of these Countries coming close to that of advanced Countries, gaining sectors with higher added value of exported goods.
Between 2000 and 2012, a growing presence in the markets of emerging economies was associated with the gradual decline of specialisation to the EU area. In fact, the contribution to Veneto export growth in the last twelve years was still closely related to sales to mature markets - in the period in question, about 55% of new export generated can be attributed to the EU markets- however, the markets of the new emerging economies recorded the highest average growth rates, with peaks in central Asia (+13.2%), Eastern Europe (+8.2%) and the Middle East (+6.5%).
Greater propensity to serve the more dynamic markets is associated with placement on the medium-high end range of exported products, especially with regards to precision mechanics - for many years one of the flagships of high-tech regional production. By observing the dynamic of export in the manufacturing sector and aggregating the basic sectors into classes based on the technological content of the goods, we see that the sector of goods with medium-high technological content has become the most representative of regional export, absorbing 39% of the entire value of regional foreign sales. The increase in export of this type of goods significantly affected mechanical sector products, electrical appliances and the optics industry. In recent years, following the automation of production processes and its high capacity to innovate products, instrument mechanics in Veneto has been able to offset the lesser demand from advanced markets with a more favourable trend in the demand for machinery from emerging Countries. The other component of intermediate content goods has also increased: the share of export of the medium-low technological content goods sector increased from 15.9% in 2000 to 19.2% in 2012. This sector, boosted by the export of metal machining, contributed to the increase of regional export seen in the last twelve years with a share a little higher than 30%, recording an annual growth rate equal to 4.2%.
A flywheel for development: trade of the 'beautiful and well made' goods of the 'traditional' sectors
The worsening Italian and European economy makes the need for Veneto's economy to seek the grip necessary to get back on its feet even more imperative. The considerations set out in past editions of the Report, regarding the opportunity for businesses to turn their attention toward the emerging markets, are therefore timelier than ever, as these markets are more dynamic than mature markets and above all are experiencing vast economic and social changes that are altering consumer behaviour in profound ways. Particularly in new markets, a potentially very large expenditure area derives from the broadening of the middle class. This section of the population is moving towards more evolved consumption, i.e. those kinds of goods that are not of necessity but hold a fascination or even play the role of status symbol. The Veneto Region can use two tools which are part of its productive DNA to exploit the potential of this market demand: a marked tendency toward export activities and an economic fabric rooted in the values of quality, design, as well as the experience inherent in beautiful and well-made products that have an obvious appeal to new consumers.
Beautiful and well-made (hereinafter called 'BBF' from the Italian 'bello e ben fatto') pertains to middle-to-upper class consumer goods made in Italy according to ancient tradition and artisanship, but also with innovative designs, cutting-edge technologies, high quality standards, and professionalism. With respect to the analysis presented in last year's Report, the field of observation regarding BBF mid-high consumer goods has expanded by including, in addition to food, home clothing and textiles, footwear and furnishing, two sectors particularly relevant to Veneto's economy: eyewear and jewellery.
Even facing a deep internal consumption crisis, export numbers show that BBF products represent an important lever for Veneto's economy: in 2012, compared to a 1.6 % growth in total exports, BBF exports increased by 4.7 %, weighing in as 29 % of Veneto's overall exports; while in 2011, BBF impact on total regional exports is 28 %, almost double the national average. In addition, Veneto's BBF export trends by destination area clearly show that growth opportunities should be sought in new markets: in 2012, exports of BBF increased by 8.1 % in emerging Countries, and 4.7 % in mature markets.
Among the more relevant new markets, Veneto shows greater penetration in Russia, in the food, furnishings and fashion sectors. Such significant presence is favoured by the twofold consideration that Russia has a more numerous middle class with new consumers swayed by a stronger fascination for BBF products than other emerging Countries such as Brazil, China, or India. However, in addition to Russia, other Countries are important reservoirs of demand: China, first and foremost, represents the added opportunity of having access to other high potential Asian markets that are more difficult to approach directly (i.e., India, Malaysia, and Vietnam). In China, given the scale of the market, Veneto's BBF products exert considerable weight; Veneto holds a market share of more than 20 % of the Chinese market for the eyewear and jewellery sectors
The United Arab Emirates represent another market of great interest where the presence of Veneto's BBF products is relatively low compared to international demand (except for eyewear). Margins of expansion are in fact detectable in all sectors, thanks to the growing appreciation of typical made in Italy products, known also through tourism and trade fairs.
The lever for triggering change: research
In this historic time, research is a multiplier of productivity and as such it is a strategic lever essential for kick-starting mature economies towards recovery. The current phase is not only one of cyclic downturn but it is also one of systemic change, and there will be even more 'technological leaps' to give impetus to the recovery and to the development of a different economic structure. Aiming towards innovation is a real strategy against the crisis, also focussing on the macroscopic issue of the scarcity of some non-renewable resources on a global level and the pressure that this is placing on the prices and availability of some goods.
In the 2020 European Strategy the 'smart growth' priority axis promotes knowledge and innovation as the engines of our future growth. Europe encourages innovation and the transfer of knowledge in the whole Union, the optimal use of information and communication technology and incentivises the transformation of new products and services of innovative ideas. It has been recognised that in order to overcome the challenges that our society faces today, from energy efficiency to demographic changes, investments in research and innovation must be strengthened so as to ensure a more efficient and more sustainable future, for society and for our territory.
In Veneto the effects of the crisis were felt by this sector: universities and public institutions have cut activities deemed additional to minimum standards more so than businesses, and have therefore reduced spending on research. The incidence of spending of the GDP in Veneto in 2010 was equal to 1.04%, slightly lower than the year 2009, 1.08%.
The agents of economic change: the businesses
The dynamic of the active Veneto businesses in the last three years confirms that the change of the regional production system is still in full swing: the service sector continues to play a driving role for Veneto economy; the services to businesses in fact represent over 54% of the regional production system (over 65% excluding the agricultural sector). The businesses that suffered the most from the recession in 2009-2010 are definitely manufacturing businesses, -1.9%, followed by those operating within the building industry which fell by 1.7%. The transport sector is next with a decrease of -1.8%, followed by trade, -0.2%. The other sectors have kept increasing, especially the 'services to businesses' (+1.9% in the three year period), businesses operating within the voluntary sector 'social and personal services' (+1.5%), those that work within tourism, 'hotels and restaurants' (+1.4%) and the banks and financial institutes (+1.2%).
The metamorphosis from a mainly agricultural economy such as that prior to the second world war, to the high post-war industrialisation, until the outsourcing trend that begun in the 1980's, allows us to understand the flexibility of the Veneto system that continues to adapt itself to the structural changes and different conditions of the national and global economy.
The Veneto industrial system, although hit hard by the international recession, still remains an important backbone in terms of the labour force as well as wealth production boosted by the international trade of goods produced in Veneto. Furthermore, it should also be noted that the service sector, in addition to the large component related to tourism, is mainly composed of businesses that operate in services to support industry.
Being a region with such a strong international vocation, it has become important for Veneto to follow the recommendations of the European Commission identified through the flagship initiative on industry that promotes an 'integrated industrial policy for the globalisation era'. Such policy should improve the environment in which the industry operates through optimising the access to funding for businesses, strengthening and developing the single market, actively defending the rights of intellectual policy, improving infrastructure, activating new industrial innovation policies, regulating international trade and agreements and ensuring access to raw materials and critically important products; all this without forgetting environmental sustainability, thus addressing the issues of energy-intense industries, as well as social sustainability, with the expansion of the business' social responsibility.
Veneto manufacture has changed over time: since the mid-2000s Veneto has experienced a differentiation in production activities, with changes in the relative weight of the sectors, in line with the transformation process of Veneto production which sees some traditional sectors making way for new sectors with higher technological and knowledge content.
The service sector obviously remained strategic, especially in the recessive periods of the economic cycle. Even here there are big differences between the businesses that were heavily affected by the crisis of consumption in recent years and other sectors. For example, the high knowledge content service sector in recent years has been approaching a higher level of active businesses at the expense of other sectors: in Veneto, in fact, the proportion of such businesses in 2005 was 11.8%, increasing to almost 14% in 2011.
How Veneto Business' are responding to the crisis
Business transformation and development are strongly correlated, as they constitute the flexibility necessary to overcome this difficult period. Business transformation actions implemented to overcome the historical crisis-restructuring relationship, which can be considered as a punctual and cyclical phenomenon, can lead to an evolutionary process that will improve the corporate situation. By observing the bedrock of businesses in Veneto, i.e. those that always remained active in 2005-2010 and fairly structured, i.e. with at least 10 employees, we are trying to identify and define the features of businesses (other than micro-businesses) that have maintained or even improved some financial variables in recent years, including turnover and profitability. The businesses studied recorded an increase in profitability proportional to the increase in employees. The differentiation in business results seems to be a consequence of business size: if small businesses (10-19 employees) suffered in 2005-2010, recording negative average annual changes both in terms of employment and profitability, medium-sized businesses tended to maintain their status, while the larger ones greatly improved. Businesses with a number of employees between 50 and 249 showed a mutual proportional growth in profitability and employment, while those with over 250 employees further enhanced employment size.
Our analysis shows that the highest performing businesses were medium to large-sized; they were almost 3,000 (20.7 % of the businesses we observed) and amounted to 66.6 % of all employees in our cohort of businesses (2010 data). The only small businesses that managed to emerge did so thanks to innovation and research investments.
Overall, the businesses that carry out Research and Development activity and operating in foreign markets showed a great improvement in profitability and good employment growth.
An example: small instrument mechanics businesses
In the latter half of the first decade of the 2000s (2004-2010) in the instrument mechanics sector in the Veneto region, small businesses - with a turnover lower than 7.5 million euros - implemented changing competitive behaviours for dealing with the ongoing changes of the economic scenario, with the aim of reinforcing their hold on the market: in a schematic approach, it can be said that both adaptive behaviour (mainly the downgrading processes aimed at simplifying the internal value chain structure and the connected business organisational set-up) and proactive behaviour (the adoption of more complex business models) have achieved this objective with remarkable success. Indeed the probability of survival on the market has increased significantly for enterprises undertaking this process of transforming their business model, above all in the short term (all above 90 %), but also in the long term. On the contrary, enterprises that have maintained a stable competitive approach and the same structure of the internal value chain, without changing their 'value proposition', generally have more difficulty in keeping a hold on the market; the only exceptions are, on the one hand, models with an approach to the market focussed on intangible investments and managerial skills able to sustain competition on international markets, and on the other, the model of 'exclusive' subcontractor, aimed at a single main client.
Farms: between traditions and new horizons
The Italian agricultural sector, above all in recent years, has undergone highly complex developments, influenced by the economic crisis, the volatile prices of agricultural commodities, changes in the CAP and lastly but not least, the new challenges related to environmental sustainability. All this, added to the demands of renewed entrepreneurial capacity and needs tied to increased profitability in agriculture, has contributed to deep changes, as recorded in the various censuses in agriculture, and which to a certain extent has led Italian agriculture to move closer to European standards: in fact, Italian farms are clearly going towards, albeit slowly, indisputable processes of enlargement and specialisation. However, in 2010 individual directly owned agricultural holdings, with exclusively owned land, small in size and strongly centred on the family of the owner are still the most widespread form. Furthermore, half of the Veneto farm managers are over the age of 60, and other profit-making activities of the agricultural holding are still unknown and used by just a few.
When considered in its entirety, the Veneto agricultural sector is undergoing slow but inexorable changes, with the progressive disappearance of small, less competitive farms and a timid emergence of more business-like and specialised agricultural holdings. However, upon analysis of individual specialisations (organic, DOP and IGP certified products, animal breeding) these new boosts become evident, even though they still occupy marginal areas in terms of percentage. With respect to the regional average, the agricultural holdings are larger, younger, tending often to rent land and constitute management companies, with a more multifunctional set-up, based on environmental sustainability and aimed at increasing income.
In the meantime, the same European agricultural model is changing drastically, moving towards a business model where innovation is its paradigm: this intense process is marked by new production methods and new types of partnerships, as well as new products and services offered to consumers. Furthermore, in recent years markets have been increasingly oriented towards the unstoppable process of globalisation and substantial evolution in buyer demands, and thus need to be able to satisfy these needs, while keeping a close eye on production safety and quality; the competitive environment is now transnational and requires entrepreneurial skills, decisional flexibility and prompt responses to change, growth, innovation, organisation and development of businesses and networks.
In the last thirty years, the evolution in mass communication systems on a world scale (the Internet), leading to massive increases in the speed of exchanging information as well as goods, has considerably closed distances, and the consequent phenomenon of globalisation has had a remarkable effect, especially in the last few decades, on international production and above all the commercial system of goods destined for human consumption. Consumption has in fact increased in line with production and exchange.
Veneto has responded to these demands, becoming ideal location to concentrate agricultural and food products of other manufacturing regions and countries, and can be defined as an effective platform for re-launching these products abroad, given its ideal geographical location and long-standing tradition of large-scale trade, dating back to the Republic of Venice, in addition to other favourable conditions, such as the fact that still today approx. 90 % of agricultural and foods products are transported on road.
Veneto operators thus play a dual role, one of redistribution over the regional territory and across northern Italy, and one of re-launching and sorting for foreign markets, exploiting the traffic corridors heading north and east, both for agricultural products made locally or those from the rest of Italy and other countries in the world: these peculiarities have led our region to hold some records in agri-food export, firstly wine which in 2012 broke every record in terms of value, with over 1.4 billion euros.
Tourism offers in continuous development
In a way, Veneto operators also contribute to enhancing tourism, for example, the 'Strade del vino e dei prodotti tipici' (Roads of Wine and Typical Products).
The Veneto region offers visitors and residents a complete landscape to admire, experience and enjoy. A synergy between public and private is essential to highlighting all aspects of production that make us instantly recognisable, and here is the flourishing of systems that approach the market under the same flag, valuing however the peculiarities of each participant: congress tourism, Veneto's villas, wine routes and local products will provide as examples. However, the range of offers is constantly developing to meet the needs of a wider audience and to research the best ways to meet one's expectations.
Regardless of the unfavourable crisis period, in 2011 Veneto tourism recorded record numbers, and it would be hard to compare to the figures well above the trend achieved in recent years. However, in 2012, the great potential of the Veneto tourist supply, enhanced by the entrepreneurial ability of the operators and by a structured and synergic promotional plan, enabled Veneto to maintain the record flow of visitors, totalling 15.8 million arrivals (+0.3%). The reduction in tourist stays in holiday resorts, now ongoing for several years, was reflected in the reduction of overnight stays -1.7%, while still maintaining the remarkable figure of around 62.4 tourist stays.
The stability of Veneto tourism is due to a growing interest from foreign customers offsetting the reduction of Italians holidaying within their own Country. The consensus increases of traditional markets, primarily the German one, while the so-called BRIC (Note 4) areas continue to climb, which now represent the 'new frontiers' on which to base new promotional strategies.
In 2012, the expenditure of international tourists in Veneto exceeded 5 billion euros for the first time, with an increase of 5.3% compared to the previous year and 2.6% compared to 2007, which was the best performance before the crisis. Therefore, the decline in international tourism revenue has finally recovered, having reached its minimum in 2010 of 4.3 billion euros.

The social

Families: between difficulties and new lifestyles
There is no doubt that this time is a moment of transformations, including social ones: in the space of just a few months, not only the general awareness of the particular nature of this historic time has changed, but also the need to adapt behaviours, life styles, personal and collective choices to the new situation.
In 2011, the 15th Population and Housing Census took place, which redrew the demographic map of the Country, highlighting the changes which have occurred in the last ten years and providing answers not only to 'how many of us are there', but also to 'who we are' and 'where and how' we choose to live. Choices that are increasingly linked to the contingencies of work and income, but also social climate, intertwining satisfaction for the present and confidence in the future.
In 2011, Veneto had 4,857,210 inhabitants, 7.3% more than in 2001, one of the biggest increases recorded in Italy (4,3%). In this decade, the foreign population especially made a positive contribution to the overall change of residents, reducing decreases and increasing gains: in Veneto the foreign presence increased by 304,254 units, reaching 9.4% of the population (457,328 people, an increase of 198.8%), while Italians only increased by 25,262 (0.6%).
The deepening of the economic crisis has cultivated the spread of a climate of general mistrust and dissatisfaction that crosses all the segments of the population, areas of the Country and different social classes. Italians, more so than Europeans, have expressed concerns about the economic and employment situation of the Country, disappointed by institutions and unhappy with the measures regarding the inclusion and social protection system, including distrust towards their neighbour.
In 2012, the level of satisfaction for life in general decreased in Veneto, as well as throughout Italy: the opinion on the personal and family economic situation especially worsened, whereas satisfaction within relationships with family and friends remained at very high levels.
Households are increasingly suffering hardships seeing a decrease in income, equal to 37,353 euros a year in 2010, 5.3% less than in 2007: 67% of households struggled to make it to the end of the month, 27% would not be able to cope with an unexpected expense of 700-800 euros and 34% cannot allow themselves even one week of holiday. The proportion of households unable to support primary expenditure, such as being able to eat adequately on a regular basis or sufficiently heat their home, or who accumulate payment arrears, especially for mortgage or rent, also increased. To make ends meet, households are increasingly forced to use savings and, when this is not sufficient, they have to eat into their equity.
The reduction in income is such that it exposed 15.9% of the population to the risk of poverty or social exclusion, a value that is still rather small compared to the national and European value (Italy 28.2%, EU27 24.2%), however, it is increasing. In Italy, especially in the South, the effect of the crisis was felt the strongest, so much as that in the last year alone the number of people in severe difficulty increased by around 2.4 million.
With the loss of purchase power, consumption levels diminish, which today sees the worst performance since 1997: in 2011 Veneto households spent 2,903 euros a month on average, 7.5% less than fifteen years ago and 12% less than in 2007, the period of maximum economic expansion in our region. Over time, the structure of consumption has changed, due to the evolution of household needs but especially in response to the different economic conditions: housing costs and food expenditure absorb around 46% of Veneto household expenditure and affect household budgets with fewer economic opportunities, who have little to spend on goods and services that are not strictly necessary and are easier to give up. The level of expenditure of the wealthiest households is 4.5 times more than that of the most disadvantaged households and the different economic availability results in a different expenditure structure of consumption: important differences remain even regarding access to basic rights, such as being able to look after or educate oneself. Households with the lowest income are only able to allocate 3% of expenditure to health care, compared to 5% of those who are economically better off; they are almost forced to abandon medical visits, clinical analysis and radiology exams, keeping only the irreducible expenditure for medicine, confirming that socio-economic differences result in health inequalities.
However, households find themselves having to make sacrifices and face limitations, but they show the ability to adapt, to differentiate from past and personal paths, even reinterpreting their vision of the world. Households reorganise their expenditure, adopt more careful and sustainable behaviour, even resetting consumption to logic, competitive need and importance, they eliminate waste and excess which was considered normal during the economic growth period: simplicity, requirement and rediscovery of worth. Large-scale distribution stores were confirmed as the main place to spend at the expense of traditional shops. Increasingly more citizens shop on-line, often benefitting from advantageous savings compared to traditional purchasing. Although a long way from the European average, 32.5% of people from Veneto who have access to the internet shop on-line, more than the national level (28.2%).
The projects the foreigners, despite the criticalities
The foreign presence, that in this crisis situation risks being experienced in terms of conflict, is still considered with ambivalence between being excessive and valid rights and recognition.
During 2012, there was an alleged phenomenon of foreigners escaping to Italy, especially emphasised in the media, which commentators have blamed on the advancing of the economic crisis and the absence of the main reason for foreigners settling here, work.
For Veneto, in 2011, enrolments at the Registry Office by foreigners from abroad decreased (32,244, 19% less compared to 2010) and at the same time the number of foreigners who decided to leave Italy for other Countries increased (in 2009-2011 the outgoing flow reached 5000 people on average, when up until a few years ago it was 2000). However, the share of new entrants remains almost seven times the outputs, resulting in a positive balance that increases the number of foreigners resident in Veneto and the population as a whole. However, the balance is in decline, a decrease that is more due to a decline of entrants from abroad rather than the strengthening of a mass exodus. However, the tumultuous growth of foreign immigration which characterised the pre-crisis years seems to have given way to smaller flows, but has not completely stopped, given that the international crisis involves even the poorest Countries, from which these people come from in general.
Moving to seek better opportunities to face the crisis seems to be a strategy put into place not only to destinations abroad, but also within the Country. Perhaps due to fewer family ties, friendships or links to the community, which generally act as support systems against economic difficulties, foreigners demonstrate more flexibility of moving more often that Italians.
Foreigners however, who suffer more from the drama of growing unemployment, are the most optimistic. It is a belief that also extends to children, a sign of a soaring projection of intergenerational well-being, at the base of which there is the will to get involved and persevere through scholastic education. It is also because of this that the majority of foreigners express the desire to stay in Italy for the next few decades, to restructure or by a house in the city in which they live, all signs that suggest the will to establish themselves, settle down, be part of the community and to think about having a family.
Those who settle down in a foreign country due to necessity know the difficulties well and often the severity of the conditions of family members who stay at home. Often people emigrate thanks to family support including economic support and migration is an investment in a plan to get out of poverty which is collective and involves the whole family rather than just the individual. The 'luck' of the immigrant therefore primarily concerns the ability to send money home. From 2005 to 2011 the amount of remittances to foreign countries was increasing, however there was a substantial halt in 2012: 423.3 million euros was sent from Veneto, 15% less than the previous year, a staggering figure if you calculate that on average one foreigner from our region was able to send more than one thousand euros in 2007, while in 2012 the estimate was 813 euros.
What the future holds for young people...
Young people are in particular difficulty; being young means being in the process of development, searching for a centre of gravity on which to build oneself, avoiding threatening falls or at least trying to learn from them. Engaged in getting to know themselves and discovering their own potential, a young person is also a citizen of a world that challenges them and that also needs their contribution. Despite the general lack of confidence in institutions, young people continue to show interest in their territory, engaging in voluntary work more often, yet still little in political life.
Young people still trust in a future where their socio-economic system can be better, compared to now and that of their family of origin. This trust can be the lever on which to invest in order to contribute to the civil society and to build their independence. It will depend on the personal efforts of the young generations, but also on the opportunities that society can offer them.
Work is certainly one of the central issues for new generations, it is a vehicle of independence when there is work and an obstacle to their own achievements when there is lack of it or it is precarious. At a national level, today the unemployment rate for young people between 25-34 years old is 14.9% and even 35.3% for boys between 15-24 years old, the highest value in the last twenty years and above the European average which stands at 22.8%. Fortunately, the situation of young people in Veneto is among the most favourable in Italy: with an employment rate of 23.7%, a sharp increase however compared to the 8% recorded a decade ago, Veneto ranks as the second region for the lowest unemployment levels. The share of young people who have been looking for work for more than a year is a lot lower than the national average: 6.1% of the labour force against, 17.2% for the whole of Italy.
Among those struggling to find employment, young people with a low level of education are the most affected: their unemployment rate from 2008 to 2012 grew by almost 10 points, reaching 17.2% in the last year, compared to 11.3% of graduates. However, although a high level of education is no guarantee of a steady job, it is still an important tool which young people can use to enter a very precarious and uncertain labour market. It is also for this reason, in addition to the lack of jobs that 54% of graduates choose to continue their education with a specialist degree or Masters.
Opportunities for social mobility are lower in Italy than elsewhere: the conditioning of family origin is still strong, resulting in unequal opportunities for individuals. Young people seem to inherit the privileges and disadvantages of their parents, family background influences their educational choices as well as the learning environments and therefore the possibility of success in their personal life.
The economic difficulties being faced in our Country further complicate the achievement of full independence for young people.
To be generative, they must know how to put a healthy distance between them and their family of origin, which allows them to develop independently and make a personal contribution to society. At the end of 2011, there were 881,389 young people living in Veneto, a decline of 23.4% compared to 1998, today representing 18.2% of the population. More than half of young people in Veneto are still living at home with their parents, (58.3% in Italy), despite it being believed that the right age to leave home is at 25 years old. The hardships of leaving home is related to the complexity of precariousness in life, but also the difficulties of supporting the costs of a house, reasons which have increased compared to ten years ago.
Those who are still living at home have less economic independence and may not always contribute to household expenses. Many are still students, often unemployed, but there also some young people who do not work and are not in education (Neet): in 2012 they made up16% of 15-24 year olds in Veneto compared to the figure from seven years earlier of 9.5%.
When they decide to separate from their family of origin, this is mainly because of marriage or for cohabitation (53.8%), although this is in sharp decline compared to a decade ago.
... trying something new
During this time of economic change, today more than ever we face the prospect of having to go and work and live elsewhere, not just as a temporary solution, but as a final plan or for at least the medium or long term. In the last decade, the amount of young people who leave Italy to go abroad has increased, transferring their residence, thus assuming a long stay. In the last five years, more than 1,600 young people in Veneto aged 18-35 years moved abroad (compared to an average of one thousand in the first few years of the 2000s). They mainly move to the UK (18% in 2011) and Germany (12%), but over time, even the destinations have changed: up until a year ago most moves were to Great Britain, now other destinations are becoming attractive, even outside of Europe, such as Brazil and the United States.
Youth is still the time of life when capabilities are put to the test, in which you experiment. Despite the difficulties in the labour market and in gaining independence, there are still those who invest in ideas and new forms of entrepreneurships. In 2012, there were 13,879 proprietors in Veneto under 30 years old, 5.2% of total young people. The future of young people, with challenges and successes, also depends on the ability of the system to guide them towards entrepreneurship and to incite their enthusiasm, optimism and motivation to make something of themselves and deal with others.
The difficult dynamics in the workplace: Veneto, a region still strong despite everything
It is not just young people suffering from the job situation. The many socio-economic changes that our Country has experienced in the last century have led to profound consequences on the labour market. The current unemployment level in Italy is the highest of this century, but is still lower than that recorded from the end of the 1980's to the 1990's, when there were many difficulties for the baby boomers in finding a job, there was the currency crisis in 1992, the desire of women to enter the labour market grew and the industrial system turned into one of services.
Many reforms have been introduced over the years; in particular by the 'Pacchetto Treu' in 1997 and the 'Legge Biagi'. In 2003, Italy was given a jump start, achieving an excellent performance with regards to the general lowering of the unemployment level. Our region has had excellent performances, recording the lowest rates since the Nineties up until the current economic crisis, decreasing from 6.4% in 1997 to 3.5% in 2008. However, since autumn 2008, the crisis has disrupted the results obtained even in our Country; despite this, in these difficult years Veneto was confirmed as among the leader regions and in 2012 recorded the fourth highest employment rate (69,3%), already reaching the national target fixed for 2020 (67%-69%) and boding well for the European target to employ 75% of the population between the ages of 20 and 64 years old, and the second lowest unemployment rate of both the total (6.6%) and of young people (23.7%). Even the 'discouraged' are fewer in Veneto than in Italy, i.e. those people who, whilst being available to work, have stopped looking for a job in the last month, as well as the 'underemployed' i.e. workers who would like to work greater number of hours and who would be available to do it immediately.
Furthermore, in Italy, there was a particularly complex intertwining between demographic changes and the labour market. The combination of increasing longevity and a decrease in the population of working age and, consequently of the supply of potential work and economic growth. For a long time, European governments have been committed to raising the age limit of retirement and achieving a significant increase in the employment rate of the elderly. To this end, the Lisbon strategy fixed the goal of 50% employment rate of the population aged 55-64 years by 2010. The EU27 neared the target which increased from 36.3% in 2001 to 48.9% in 2012; Italy also achieved good results, even starting from smaller levels, going from 27.6% to 40.4%, and Veneto was even better, which increased its rate by 18 points, from 24.4% to 42.8%.
Thus between the emergence of aging and the crisis, an action policy was needed to promote more prudent management of pension savings. A step forward in this direction was made by the social security reform of the Monti Decree in 2011, which aimed at increasing the average pension age in the next few decades. Furthermore, among the priorities of Monti's technical government were the flexibility of the labour market, both entering and exiting, a structural reform of the social safety net system and the full inclusion of women and young people, the latter were particularly affected by the crisis, as discussed in the previous paragraph. The priorities included in the more ambitious 'Fornero reform' (Note 5) are aimed at renewing and reorganising the Italian labour market, which has proved to be more appropriate to the timescale.
Sectors and professions: the mirror of a new society
However, not all sectors and professions were affected in the same way. The crisis particularly had an impact on sectors that were already experiencing difficulties and especially industry: in Veneto from 2008 to 2012 those working in the sector of industry in the strict sense decreased by 11.5% and less than 7.2% were workers in the construction industry. However, accommodation and catering activities and trade increased the number of employees significantly even during the economic recession: a positive aspect especially for a region such as Veneto, where tourism has always been particularly important. But the sector that recorded the biggest increase of workers is the collective and personal services sector: this sector includes services such as membership organisations, services for people and household activities such as domestic staff. In fact, in the last few years, the professions that grew were mainly in education services, health services and services to the person. Domestic personnel belong in this group, which includes the so called 'maid' services and carers. The increase in the number of these employees reflects the structural trend underway for some years now, responding to the changes in Italian society: on one hand the aging of the population, which leads to an increase in the need for elderly care, and on the other the feminisation of the labour market, which implies lesser availability compared to the past of carrying out work related to home and family care, for which formal work is increasingly used. Such jobs are often occupied by foreigners, which among other things saw their regularisation in the amnesty of 2009.
Education... driving development
The enhancement of human capital is closely related to employment: investing in education is not only majorly beneficial for young people and their families, but also is the basis on which to re-launch the Country's economy and is the engine which drives development.
In 2012, 47.6% of people in Veneto had at least a secondary school education compared to 35.4% in 2001; in particular, the share of graduates increased by four per cent, whilst those with high school educations decreased from 25.9% to 37.1%.
Furthermore, in the broader context of the European Strategy 2020, the enhancement of human capital has a further function: encouraging the compatibility between growth and social inclusion. In fact, the choice of the two targets on education, combating premature school leaving, which should be reduced by 10% before 2020, and increasing the amount of young people aged 30-34 years old with degrees to at least 40% in these ten years, reflects this function. In Italy, although its performance has been improving in recent years, the share of 30-34 year olds with degrees was equal to 21.7% compared to the EU27 figure of 35.8%, and a rate of school leaving, or rather the share of those who have an educational qualification lower than the high school diploma and do not attend other educational courses or carry out remaining activities longer than 2 years, 17.6% compared with the European figure of 12.8%. In Veneto, where school leavers are always less, a figure of 14.2% was recorded compared to 18.1% in 2004, and the share of 30-34 year olds with degrees grew from 16.1% in 2005 to 21.4%. These figures highlight our region because, on one hand, the gradual increase in graduates bodes well for achieving the national fixed target, and on the other hand in 2010 Veneto already reached the goal of reducing the levels of premature school leavers: in fact, since the Italian regions started from lower levels, our government fixed a more realistic target to be reached before 2020, i.e. 26-27% for tertiary education and 15-16% for school leavers.

The environment

From global to local
The eighteenth Conference of the Parties of The Framework Convention on Climatic Changes (Unfccc) (Note 6) was held in Doha, Qatar in December 2012. This had some important objectives, including laying the foundations for the continuation of the Kyoto Protocol, the so-called phase 2 and consolidating the agreements on long-term cooperation and those relating to assistance to be given to the developing countries. The first objective, the Kyoto Protocol, saw the adoption of a specific amendment for the institution of phase 2 thereof commencing from 1st January 2013. With regards to assistance to developing countries, the industrialised countries confirmed their commitment to contribute economically so as to achieve an overall allocation of 100 billion dollars per annum destined for mitigation and adaption from 2020 onwards. Passing from the global to the European dimension, where the commitment to safeguarding the environment is particularly strong, the European Commission introduced the proposal of a decision of the European Parliament and Council on 29th November 2012 on the Seventh European Programme for environmental action, valid until 2020 and called 'Living well, within the limits of our planet'.
There are multiple aspects characterising the interactions between civility and the environment: producing wealth requires energy, energy requires resources and, lastly, wealth produces waste. The actions undertaken by the European Union to that effect impact precisely on this process, in a perspective of both reduction of energy consumption and 'scrap'. In parallel, the transformation of the production processes and creation of eco-compatible goods is leading to improvements, still slow, with regard to the inputs of pollutants to the air, water and subsoil. Another important trend being pursued is reduction of waste, by greater efficiency in the production sector and also by reusing waste as a new resource. There are many actions undertaken in the environmental field which involve a multiplicity of aspects and players: from more systematic and precise monitoring of the territory in which we live, the water that we drink and the air that we breathe, to planning for reducing the environmental impacts of anthropogenic activities. The main aspects treated in this report regard air, water, waste and energy, with particular reference to their current condition and the changes that have occurred over the years and are currently underway in Veneto.
Air, water, waste and energy: 4 faces of the same tetrahedron
Italy defined strategic objectives for air quality with Legislative Decree no.155 of 2010, implementing Directive 2008/50/EC, and the recent Legislative Decree. No. 250/2012 to change and add to the aforesaid 155/2010. The Veneto Region has commenced the process of updating the prevailing Regional Atmosphere Protection and Recovery Plan so as to align it with the new European Directive and related Legislative Decree 155/2010.
With regards to the monitoring of fine particles (PM10), the 2007 trend shows a slight decline up until 2010 in most of the units in question, which is however, counterbalanced by a higher value in 2011. This phenomenon can be partially explained by taking into consideration that the problem of very fine dust, outside the quantity that is input to the atmosphere, is also that of the stagnation thereof and this is strictly linked to the surrounding climatic conditions. The climate of the Po Valley favours the permanence of PM10 particles in the air, and, in addition to this, there was a particular situation in 2011 that saw, contrary to the standard, a winter period characterised by the months of February, November and December with high pressure and rather stagnant air, which certainly did not favour the dispersion of very fine dust. Ozone (O3) saw a very fluctuating trend from 2007 to 2011. Even in this case O3 concentrations are heavily influenced by climatic conditions. In summer strong solar radiation, high temperatures, the presence of high pressure and low ventilation are all phenomena that favour stagnation and the accumulation of pollutants that give rise to the formation of O3.
The other big environmental question is water, a subject that includes many different areas: from the availability of drinking water resources to the quality of the same, from the suitability of water bodies for swimming, to aquatic flora and fauna. The sustainable use of these resources is becoming an increasingly pressing problem as the difference between demand and offer increases. We are beginning to realise just how important more rational water management policies are, and the UN declared 2013 'international water cooperation year'. In the year 2000, the Italian Parliament and the European Council approved the EU Water Directive Framework (the WDF 2000/60/EC - 23/10/2000), the main objective of which was to establish 2015 as the year in which all EU member states are required to reach a 'good' ecological status for their water resources.
In Veneto the situation of water quality is positive: most of the water in bathing points fall under the category 'excellent'. Similar consideration applies to drinking water, in fact, in the entire region: the median values of nitrate concentration are below the threshold of 50 mg/l provided for by Italian Legislative Decree 31/2001 for the protection of human health. However, with regards to the use of water resources, in Veneto in 2008, 730 million cubic metres or water were abstracted, 8% of the national total, which places the region fourth among those with the greatest demand for water. This absolute figure is counterbalanced, however, by analysing the average abstraction per capita: with 149.4 cubic metres in 2008, Vento is below the average value of the rest of the peninsula, equal to 151.7 cubic metres per capita.
The issue of waste is increasingly current, also because of the strong emphasis placed on the problems connected with it. In Veneto, much has been invested in this sector, and the results are tangible. The transformation which has occurred over the last 10-15 years is clear. Although the level of waste produced has not decreased yet, apart from the last year (2011), the figures show a sharp change in the waste management processes, mainly due to the crisis. The municipalities that carry out separate waste collection doubled between 1999 and 2011 and there was a real boom (almost 300% more) of those that do door to door collection. The result reached in terms of overall separate waste collection is clear: from 28.4% in 2000 there was a constant increase, reaching 60.5% in 2011, exceeding the 31st December 2011 target of 60% required by Legislative Decree 152/2006. Beyond the numbers it is important to note how the quantity of waste sent to landfills has drastically reduced (in 2011 it was equal to 8.2% of the total compared to over 39% in 2000). This is mainly due to the recovery of dry and organic waste, with a respective variation of 19.5 - 33.4% and 15 - 27%.
The final key issue related to the environment is energy which is one of the main challenges for Europe. The reliability of supplies, cost reduction and respect of the environment as well as reducing greenhouse gas emissions, are the priorities. Energy efficiency plays a fundamental role in this scenario, and is a key instrument for reaching European energy and climate targets. Energy efficiency is achieved through a better use of resources, but also an increase of the use of renewable resources. In this sense the goals for the European Community set for 2020 are clear:
  1. a 20% reduction in EU greenhouse gas emissions from 1990 levels
  2. raising the share of EU energy consumption produced from renewable resources to 20%
  3. a 20% improvement in the EU's energy efficiency
Each member state was assigned a specific target and if every state reaches their target, this should make the European target of 20% a concrete reality. Italy has been assigned a target of 17% and by 2011 the share reached around 11.5%, a distinct improvement on the 4.9% of 2004 but which shows there is still a long way to go.
The regional institutions, as far as their contribution goes, play a fundamental role in pursuing the target. For this purpose, the Decree of the Ministry for Economic Development passed on 15/3/2012, known as the Burden Sharing Decree, divides the national target for renewable energy sources between the regions for electricity and heating/air conditioning sectors, but not for transportation, which is the sole competence of the State. The target set by the Burden Sharing Decree requires 10.3% of gross final energy consumption in Veneto to be obtained from renewable energy sources by 2020. Statistical data at a regional level is currently only available for the electricity sector. The general target can however be broken down into sectors, and the target for the electricity sector in Veneto is 15.1%. Studying the trend of this indicator from 2005 to 2011, it is immediately apparent that we are witnessing a major transformation: from the initial figure of 12.9%, there have been rises and falls in the trend with small gains up to 2010. In 2011 however there were significant increases with a major leap forwards in terms of renewable energy from 13.6% in 2010 to 17.1% in this one year alone, reaching and exceeding the 2020 target.
In general, there are still some issues regarding the dependency of Veneto on imported energy supplies, but there are some glimmers of hope thanks to the ongoing activities aimed at innovation of production processes, mostly regarding the use of renewable energy. A strong sign comes from the important impetus given to photovoltaic energy which has grown almost exponentially, even though its effects in the medium term are still to be evaluated, but it should be kept in mind that this explosion is also the result of a national incentive campaign.


Veneto: a new map of the territory for greater optimisation of public resources
The current socio-economic situation also requires important decisions to be made by the government. For a long time, at both a national and regional level, we have been travelling along a road to reforms and transformations that will restructure the entire territory in terms of optimising the use of public resources. One example of this is the territorial reorganisation plan for the Veneto region that is moving in two distinctive but interlinked directions, or rather the associations between municipalities for the management of the essential functions and the simplification of the governance levels present in the area.
At the moment, Veneto geography is very hazy and defined by a variety of levels of governance often connected to one-function logics: to cite just a few examples, there are 25 Local Programmatic Agreements (IPA), 19 Mountain Communities, 21 Ulss (Healthcare) Services, 51 Social and Healthcare Districts, 82 Local Police Districts and so on. Consequently, a study is in progress to evaluate and rationalise the levels of governance, in terms of simplification and re-composition according to a multifunctional logic which allows more effective political decision-making for the benefit of the citizens and of the services offered to them. The territorial reorganisation plan should be based on the uniform areas identified by the Regional Law 18/2012: the central Veneto area, that of lower Veneto, the area with high urbanisation and that of the mountain and partial mountain area.
With regards to the search for the optimal and most uniform territorial dimension for associated management, an analysis of the financial reports of the Veneto Municipal administrations has been carried out (2009 final cost statement) that takes into consideration the total current expenditure and that of five essential functions (administration of management and control, local police, social sector, viability and transport, public education); The purpose was to find out if an 'economic' management of the expenditure can be linked to socio-economic parameters in the territory.
On average, the municipal administrations have an expenditure of around 720 euros per inhabitant. The figures show that the mountain municipalities are those with a higher per capita expenditure, together with the major province towns and the area of Polesine.
The levels and types of expenditure of the municipalities largely depend on the number of inhabitants relying on the territory since there are many different demands and services offered. In general, the very small and very large municipalities have the highest expenditures even if for different reasons; the municipalities with over 50,000 inhabitants (i.e. the major municipalities with the exception of Belluno), for example, offer more services and act as a centre also for the neighbouring municipalities, while the smaller municipalities have to bear larger expenditures in order to guarantee some essential services. It can be said that the central population classes, between 10,000 and 20,000 inhabitants, are the cheapest.
In order to identify the optimal size with regards to the territorial areas suitable for the exercise of functions and services by the Municipalities, in the month of September 2012, a consultation process was launched involving all the Veneto municipalities, who were invited to submit an associative proposal to be realised according to the criteria indicated by regional law. By the middle of February 2013, 114 responses to the regional invitation were received by the Directorate of Local Entities, 23 of which were deemed formally eligible, for a total of 92 municipalities (75 of which were subject to associative obligation). The proposals received indicated a preference for the convention rather than the more structured model of the union; in any case no new territorial areas were proposed with regards to the current Unions of Municipalities, thus the current associative dimensions were merely confirmed.
Towards efficiency and equity in the expenditure of local entities: standard needs
The enabling law on fix fiscal federalism (Law 5 May 2009, no. 42) and the implementing provisions regarding the standard needs of local entities (Municipalities, Provinces and Metropolitan Cities) issued with Italian Legislative Decree 26th November 2010 no. 216, offer Italy an important opportunity to modernise intergovernmental financial relations and make the expenditure of local entities efficient. The reform process will allow equalising transfers to local entities based on standard needs, abandoning the criteria of past expenditure which is at the base of both the inefficiencies in the distribution of intergovernmental transfers and mismanagement of expenditure by local governments.
During the two year period 2011-2012, SOSE S.p.A. identified the method for measuring the positioning of local entities based on efficiency of expenditure and the quantity of services offered.
With regards to the general duties of the local government and the police (Note 7), overall the Municipalities of the Veneto Region show a higher standard need than the past expenditure of 5.65%; in other words, this can be seen as a sign of an overall 'good' government. In general, the small municipalities of Veneto, with a population up to 2,000 inhabitants show a lesser need on average compared to past expenditure, whereas the municipalities of Veneto with over 3,000 inhabitants show a greater need on average with regards to past expenditure. It should be noted that the small municipalities have significant diseconomies of scale.
The economic analysis of the differences between past expenditure, standard need and effective output (past output) and quantity of services showed that there is a large percentage of municipalities that can improve their performance.
The 'virtuous' municipalities may be considered as 'benchmark' for the identification of best-practices, both on a level of supply of services, which is higher than the estimated demand with the analysis of quantity of services, and for levels of expenditure efficiency - past expenditure is in fact lower than the standard need.
Cover Statistical Report 2013