Road to recovery
Italy’s leather sector, encouraged by recent comments from Prime Minister Mario Draghi, can be optimistic about contributing to the country’s recovery from covid and to benefiting from a share of European Union funding that will aid that effort.
The prime minister of Italy, Mario Draghi, delivered a message of hope to Tuscany’s tanners and leathergoods manufacturers during official visits to the leather manufacturing cluster around Santa Croce sull’Arno and the famous area for finished leather products manufacturing near Florence, in late February.
Speaking at a reception in Florence afterwards, Mr Draghi said that production environment the leather industry has in Tuscany was a good example of the benefits that industrial activities can bring if they are properly rooted in local cultures. “This isn’t only about links to external markets,” the prime minister said, “but also about important links that these activities have with the local area. They are an expression of companies’ willingness to invest in technology and in social capital, to take a long-term view.”
Centuries of artisan craftsmanship
He went on to say that Tuscan companies’ expertise in producing leathergoods exemplified this well. “The quality of the materials this sector uses helps to set it apart,” he said, “and this is a benefit of being close to the Santa Croce tanning district. It also benefits from the high levels of skill and artisan craftsmanship that come from centuries of tradition, enriched further by creativity and by the research that the sector’s academies and institutions carry out.”
Mr Draghi said this combination of qualities had allowed the leather sector in Tuscany to almost quadruple its exports in the last 20 years. National leather industry association UNIC confirms this is correct. In 1999, Tuscany’s leather-sector exports brought in €2.6 billion. By 2019, this had grown to €7.9 billion. “And after the slowdown that resulted from the pandemic, this sector is now heading towards a new period of vigorous growth,” the prime minister concluded.
Green light for billions
Just a few days later, the European Commission announced “a positive preliminary assessment” of Italy’s bid to receive funding under the EU’s post-covid Recovery and Resilience Facility, part of its Next Generation EU fund, worth €750 billion in total. Italy will be the biggest single recipient of money from this fund; its share will be worth €191.5 billion in all, €68.9 billion in grants and €122.6 billion in loans. Italy has to meet more than 50 different targets and milestones to receive the whole amount, but the “preliminary assessment” announcement at the end of February cleared the way for the Mr Draghi’s government to receive an initial €21 billion and move forward with the country’s post-covid recovery.
The president of the European Commission, Ursula von der Leyen, called this “an important step ahead” in the implementation of the Italian recovery plan. She said: “We consider that Italy has made good progress. So, as soon as this is approved by member states, Italy will receive €21 billion.”
Areas in which Italy must continue to make progress include reforms in public administration, public procurement, and in civil and criminal justice, as well as in helping businesses there advance in digitalisation and sustainability. These last two themes are at the core of how Italy’s leather sector can contribute to the country’s recovery, benefit from some of the funding the EU is providing and achieve the “new period of vigorous growth” towards which Mario Draghi has pointed.
Green transition
As in each EU member state that is eligible to receive recovery-plan funding, it was the authorities in Italy who designed their country’s plan, submitting it for the European Commission to assess in April 2021. In preparing it, they consulted widely with businesses and their social partners, regionally and nationally. The plan supports a “green transition” and the development of the circular economy. It also supports better use of technology in manufacturing and increased training in digital skills for the workforce. Almost 40% of the funding the plan attracts will go into “climate objectives” and 25% will go into projects that support the digital transition.
“Italy is on the road to recovery,” Mario Draghi said after visiting the Tuscan leather sector. “And the government will continue providing help to sectors that are in difficulty.”
An extraordinary opportunity
He spoke about the recovery plan as being something that presents opportunities to address challenges that the Italian economy has faced for decades, including gender and generational imbalances in the workplace, something many in manufacturing sectors believe digitalisation will help eradicate. He said the government would maintain close contact with regional authorities and industry organisations, adding that there was no “single recipe” for addressing the needs of all sectors or all parts of the country. Instead, he identified the need to adapt the measures the government can put in place to the requirements of different industries and different regions.
Italy’s Recovery and Resilience plan gives the government the possibility of carrying out “transformations that come from below,” Mr Draghi said, explaining that this means putting in place ideas for transforming different parts of the country and different industries that have come from the people who live and work in them. “This is why this is a truly extraordinary opportunity,” he said.
Mario Draghi visits Ferragamo’s factory near Florence. Leather and leather products manufacturers in Tuscany and across Italy can contribute to the country’s green transition.
All Credits: Government of Italy
