Italian economy helped by companies brought online by pandemic
Pierangelo Masciadri sells his little one’s ties workshop on the shores of Lake Como since the 1970s, but the pandemic has forced it to take its sales online.
As businesses across Europe closed their doors during last year’s shutdowns, Masciadri, which has tens of thousands of customers worldwide including former US President Bill Clinton, opened an eBay store. . “It was a big revolution for my business,” Masciadri said.
“Who would have thought of learning what search engine optimization was at the age of 70? . . When the first order arrived I couldn’t believe this was really happening.
He is not alone. Italy’s booming merchandise exports have become a key driver of the country’s economic recovery after last year’s historic recession, fueled by a rapid increase in businesses using digital technology.
In April, merchandise exports were 6% above January 2020 levels – the highest growth rate of any major eurozone economy, compared to rates below 1% in France and Germany. As a result, Italy’s merchandise trade surplus has grown since the start of the pandemic.
Online retail volumes increased by more than 50% in January 2020, well above the euro area average of 42%.
It is not before the hour. Italy has long been a digital laggard. In 2015, a year before Rome launched an industrial plan to boost technology investment, less than one in ten small and medium-sized businesses were selling online – just half the euro area average.
This has since improved by 6 percentage points, but it still leaves the vast majority without an online sales transaction. This has hampered the productivity of Italy, which has not only been hit by the crisis but has barely increased in real terms since the turn of the millennium.
Andrea Basso, sales director of Aptos Italy, a company that sells retail technology primarily to small and medium-sized businesses, said that because many companies faced “extremely limiting situations” during the pandemic ” they were therefore forced to find creative solutions, accentuating the process of digitization ”.
“Very small businesses, in particular, have realized the importance of an extremely fast reaction time if they are to compete,” added Basso.
Dario Carosi, who runs Mondo Convenienza, which designs, sells and distributes furniture and home accessories, said digital investment has been key to keeping the company’s turnover at 70% of levels normal, even during the most acute phase of the pandemic.
The digital division the company created in 2017 “saved us,” Carosi said. Since then, the company has devoted more resources to digital projects, recognizing that its customers’ journey online is here to stay.
Digitization and innovation are also at the heart of Italy’s ambitious post-pandemic reform program. Mario Draghi, Italy’s prime minister, took office earlier this year with a pledge to overhaul the country’s notoriously slow bureaucracy and legal systems.
He wants to use the 205 billion euros that Rome will receive as its share of the EU’s stimulus fund to digitize the economy, as well as on infrastructure projects, climate and environmental initiatives, education and health. .
Speaking at a press conference last month, Draghi said digitization was “of the utmost importance” in reducing socio-economic inequalities and helping the economy recover from Covid-19.
“This is one of the government’s most urgent priorities,” Draghi said. “Many projects [in other sectors of the economy] could not be done without taking a step forward by digitizing our public administration and our planning capacity.
Massimo Rodà, senior economist at industry lobby group Confindustria, said digitization was “a decisive factor in the economic development of a country and in improving its competitiveness”.
“This changes consumption and production patterns, business models, preferences and relative prices and also affects variables relevant to policies such as employment, productivity and inflation,” he added. .
This is helping to mitigate the economic impact of the pandemic. Italy was the only major eurozone economy to grow in the first quarter of this year. Its production increased 0.1 percent from the previous three months; in contrast, the euro area as a whole recorded a contraction of 0.3 percent.
“The whole future of Italy lies in digitization and the current circumstances have led to the unblocking of a modernization process for a country which has been evolving at a slow pace for too long”, said Irene Finocchi, professor of computer science at LUISS University in Rome. . “It’s finally an opportunity to catch up with other countries.”
This change during the pandemic means more Italian businesses are reaping the benefits of their surprisingly rapid transition to digital commerce.
Maura Maitini runs a shop selling religious items and liturgical clothing in the medieval city of Assisi, a popular destination for pilgrims. She said her business had been “almost flattened by the pandemic” – until she opened an online store.
“The first item we sent was a chalice for Holy Mass,” she said. “Of course, human contact is important, but faith also evolves with technology. Sometimes when someone orders a pendant or rosary online, I bless them at church before I send it out.