TOP TEN COUNTRIES DOING BUSINESS IN ITALY
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It’s important to remember that as well as the familiar boot of the Italian
mainland, the islands of Sicily and Sardinia both form part of the country.
Italy also contains two mini-states, San Marino and the Vatican State. The
Principality of Monaco, ruled by the Grimaldi family, considers itself to be
Italian, despite being surrounded by France.
Italy is a Mediterranean country but extends upwards into the Alps in the
north-west and to Austria in the north-east. The people of Trieste, Turin and
Milan have more in common with each other than any of them do with Rome
or Naples.
Italy used to be a collection of city states loosely held together under the rule
of the Austro Hungarian empire until 1861, when the country was unified.
But the regions jealously guard their cultural independence: indeed, Italians
embrace the concept of campanalismo, loyalty to the sound of your local church
bell or campanile. Some say the only time the country gets together is to
celebrate the success of Azurri, the national soccer team!
While many northern Europeans dream of owning a house in the Tuscan
sun, Italians get on with daily life – and that’s not always easy for them. Italy
shares some problems with other ‘old European’ countries – an ageing
population, high welfare costs and labour-market rigidities. It also has to
contend with its own unique difficulties. In recent years its growth has generally
been the slowest in the European Union. Embarrassingly for national pride,
the World Economic Forum in 2006-07 rated Italy only 42nd of 125 nations
in its annual competitiveness league (although in fairness, India and China
were placed 43rd and 54th). Added to this, Italy has to cope with high levels
of organized crime and the controversy over immigration, even though the
industrial north clearly needs labour. Tax avoidance is a national pastime,
and experts claim that the underground economy accounts for between 15%
and 27% of GDP. On top of all this, Italy has to import around 75% of its energy
needs and most of its raw materials.
A distinctive feature of the Italian economy – and what gives Italian products
so much charisma – is its huge number of energetic small firms, many of them
family-owned. Around 90% of Italian businesses have less than ten employees.
However, this vibrant SME (small and medium-sized enterprises) sector is
vulnerable to competition from lower-cost Asian products.
None of this detracts from the sheer fascination of being in Italy and in
interacting with Italians. Their cultural heritage is vast and varied, from the