Welcome to Claudio Brachino’s new appointment with Portraits, our video podcast series for Buongiorno America and all the newspapers that are part of Buongiorno America, we also call them Portraits, not because we are fond of Anglicism, but because we distribute newspapers that want to act as a cultural bridge between Italy and the United States. Our guest today is Matteo Zoppas, whom I thank for his availability.
He is a major entrepreneur and in this podcast especially president of ICI. I’ve done 20 years in the news and I’ve always written down the qualifications and definitions, so I read them, I’m never wrong. We tell you what it is according to the official definition and then have Zoppas tell us more about it.
“Agency for the Promotion Abroad and Internationalization of Italian Enterprises, the body through which the government promotes the consolidation of the economic and commercial development of our enterprises in foreign markets.”
Every presidency has a president. You are an entrepreneur, with an important history, so you are in the right place because you know the needs of businesses. I ask you, as president, what is the mission, strategy and goals of your presidency?
Every president has his own strategy. What is his?
Yes, let’s say right away that it’s not the presidency that does all the work, so you have to say that there is the presidency, the board of directors, the political directions, the control room that gives the directions that the Agency has to follow in unloading it on the ground what you can do is to try to prioritize in interpreting what are the directions and how best to unload it on the ground, of course with a public type of structure and Agency, because anyway we are part of the public administration and you have to be able to find compromises to give a let’s say entrepreneurial interpretation to what are the activities that can be carried out.
Perhaps this is the added value I can give. Certainly the mission of the Agency is the promotion and development of Made in Italy in the world. Promotion is a little bit equivalent to marketing a company, development is a little bit equivalent to commercial: we do development the moment we manage to bring our producers together in a systematic way with operators, importers and buyers on the other side of the border. That is the goal, strategy on the other hand, that is, how to pursue the goal by definition, is not an easy thing. It is something that anyway has been happening for many years already because unfortunately I realize as a person who comes from the company, who has followed the internationalization of an important brand, who has had the good fortune to represent as president of Confindustria many companies of a territorial, then of a regional one, I realize that what is called “country system” is not sufficiently known. I tell you, I even gave it a try because I thought it might be my problem, (because everyone has their own story as you said earlier): we gathered at a table other entrepreneurs, other territorial presidents and also export managers of companies and it became clear that not everyone really knows what ICE does nor the “country system,” which I remember is composed of that entity that the government can use to help export promotion and development, Sace, Simes, Cassa Depositi e Prestiti and especially all the government agencies, all the ministries that work on it. So the strategy, if I can call it, for me is really to be able to bring the mindset of the private sector much closer to the public sector and vice versa. The strategy is to make companies understand how much the country system works; I would like to be clear, the results are already being brought despite not knowing well enough what it does: when I say this I can also support it with a study we did with the Istat institute, with which we analyzed samples of companies that were being assisted by ICE, homogeneous companies that were not being assisted by ICE and there is on average a 5 percent more growth. So the tools are there, and if I may give an example, what do we do as ICE? We take entrepreneurs abroad to exhibit their products, to make issues, we make collectives in trade fairs, we have almost 90 offices around the world to give an address, especially to those small and medium-sized companies that still don’t know the market they want to approach, to understand which are the main customers in their sector, route them, help them and assist them in going to contact them, but then also all the other issues that there are that are normally country-specific, certification, bureaucracies, customs and whatnot. And then what we also and especially (and this is the part that you don’t know a lot about) is that we do so-called incoming, so we work abroad as we said, and in Italy we do both special issues where we take operators and entrepreneurs to visit industrial districts, manufacturing, craft and whatnot, but most of all, the most classic thing, is that to the various feristic events that there are we bring international buyers. From the furniture fair to fashion week, to Pitti Uomo, to Pitti in general and just agribusiness, I can think of VinItaly in particular with which we work very well with Fiera di Verona: in VinItaly out of 800 international buyers, 500 we bring them selected together with Fiera. If you put yourself in the shoes of an entrepreneur who is exhibiting and who sees 8 buyers coming, he should know that 5 are brought by ICE and maybe he doesn’t know it (and we can’t even pass them around with ICE coupons), but it is those buyers, those importers, those operators who then make the difference to him in their joint business.
And above all you also have to consider, this is a message I give to entrepreneurs (of interpretation of what we do), that normally at trade fairs in Italy and abroad, you make a first contact, out of 100 contacts made some take some home and start working those 10, 100, 200 million a year: the contract is not made right away, normally there is the first contact at the trade fair and then, after time, you go to finalize. So if you tell me what you did in the fair I can’t tell you: we brought you the various operators, then over time these businesses develop. We start with small and medium-sized companies, but also the big companies in these situations have the same buyers coming to see them, so we do a bit of an all-around operation, we are supervised by the Ministry of Foreign Affairs, so we are coordinated by the Ministry of Antonio Tajani, we have a direction that is composed of the Ministry of Foreign Affairs in the first place, the MIMIT, then the Ministry of Made in Italy, the Ministry of Tourism, and also the Ministry of Food Sovereignty (with whom we work a lot because we know that agribusiness is very important for Made in Italy), and of course also the Ministry of Economy and Finance that has to help us in some way economically to do our work well.
It was very clear, we consumed half of our format but I didn’t interrupt you because you also took my second question, which is also the essential one though. I just add one small thing as a journalist, and I am happy to communicate on this with you and these media, as I have also done with the other media where I work, because more and more we talk about this topic among journalists: internationalization that seems to grant a bad word, however we have to explain it and we have to understand what is behind it, you explained it well. Then at the end of the day these are things that many entrepreneurs don’t know, they don’t know the rules, they don’t know what big government agencies like the one you represent today are doing, and so doing communication on this and getting people to understand how the dialogue works today with the foreign market is very important.
I complete, maybe then the answer because it is important to understand one thing: internationalization goes from the beginning of foreign trade, which is what we do, to the establishment then of business units and then also production units abroad. It all starts from the first sales: when the sales then reach a level that justifies investments abroad, then there takes over even more assistance from SACE, SIMEST, Cassa Depositi e Prestiti, which also help financially then in the place to do these kinds of operations.
I always tell entrepreneurs, and I think it is necessary: read the instructions for use. If you know what the country system is doing, you can turn to it and then get it to help you. Let’s take away the skepticism, which maybe is justified by the fact that some experience may have gone unsuccessfully: we don’t have a magic wand so we won’t solve all your problems, but we are an infrastructure on which the development and growth of that internationalization should be based.
Let’s talk a little bit about our SMEs, which are important…
They are 95 percent is the entrepreneurial fabric of Italy.
It is the romance of our capitalism: the small, the micro-enterprises, the medium-sized ones. I have often interviewed the governor of Veneto, Zaglia, and he tells me “when he comes to Veneto and sees a street that looks like it’s made up of houses, it’s actually all SMEs, one behind the other.” It’s a very nice image, I have been covering PMI with my weekly magazine, and I must say that it is a world that even business journalists know little about and, as you know, it is also poorly represented in communication.
So, I take it from a distance, let’s talk about Italy and America, since we are talking here about organs of communication between the two countries, and the two models. When President Mattarella went to Kenya a year ago, talking about our SMEs, he said that “it is a model that makes entrepreneurship, it is territory that the world (regardless now of a place of view) envies us.” Here, this model when you compare, for example, with America, which is another country, an important gentleman worked for me, his name is Cirolle, who lives in Sacramento, an SME consultant, and he says the American model is very important, because it is very different from our SMEs.
We are ingenious, we are creative, we have extraordinary ideas, however, for example, we are disinclined to do start-ups, because for us there is the concept of “failure” which in America there is not, and Americans are very strict in the arrangement of rules. So I wanted to ask you, in this Italy-America relationship, which is a happy relationship, culturally, anthropologically, historically happy relationship, how do these two models meet?
More than models, which is not really in my area of expertise, I can tell you that there is a very interesting issue just on start-ups.
When I was at CES a month ago, a very interesting number came out, namely, the investments that are being made in Italian start-ups have grown very significantly. If I’m not mistaken it’s 60-67% increase in the last year. So there is more and more interest, more and more intense.
I must also say that the Italian model, compared to the American model, also has a certain characteristic. We have an ability, especially of small and medium-sized enterprises and even micro enterprises, to generate ideas, then products and have a creativity that normally abroad you only have when there are big companies that invest in research and development, and then bring to the product a characteristic of an objectivity that can be interesting. We, on the other hand, also do this with small and medium-sized companies because we have, as you mentioned it earlier the ingenuity, creativity, ingenuity and the ability to dump entrepreneurs on the ground that we can hardly find abroad.
And we put this to the system because there are so many companies, so there is a proliferation of ideas that there are the small and medium-sized companies, and also in start-ups of course, and this is one of our assets that is what allows us to remain Made in Italy in the world in some way. Then of course there are also the big companies that make those leaps, those very important leaps that become precisely the reference to markets at world levels. This is perhaps an observation that is not taken for granted and a little different from all the others that are normally made.
I repeat at CES we saw some important activities, maybe we are a little bit shy in using and dealing with Artificial Intelligence, maybe on that we should speed up a little bit compared to the others to the other realities that you see around, and maybe it can be scary that the time when Artificial Intelligence will become generative really, not the generative one of today, generative applied, maybe we could start to have that ingenuity, to know how to be creative also in using Artificial Intelligence because otherwise we really fall behind.
This is a very important issue that you touched on. I about the numbers, I don’t know whether more or less we have said everything, because I had a note on the overall ISTAT balance sheet on Italian exports, but it seems to me that more or less we have laid out the numbers clearly…
But look, let’s do a number that is the most important one. Minister Antonio Tajani gave it to us, for the growth of Made in Italy abroad: 700 billion. We are at about 620 billion euros: to get to 700 there are these 80 billion to close and we, as a country system, have to engineer ourselves to be a good infrastructure to reach those numbers. Beware that we have some pretty critical situations now: Germany, with not just a short-term issue but a medium- to long-term issue because it’s related to a long-term automotive industrial policy. We have China that is underperforming. We have some categories that are still hesitant.
We have the conflict situation in Ukraine that blocks me Ukraine and Russia. Russia when it unblocks opens up a market for me, Ukraine will become an opportunity for reconstruction that has 400 billion in general-we have to go and get as much as we can. We have the Mattei plan that needs to be “attacked” because it is an important foresight: 1.4 billion people making 20 billion in Italian exports versus Germany out of 80 million making 80 billion in exports.
So if we start to grow that market certainly there is a very large opportunity. And then there are opportunities like aerospace, which will go from 600 billion in the space economy to 1600 -1800 billion within 10 years. So we have at least 20 to 25 billion to take in that range.
So in short, the opportunities are there, we have to go get them and help entrepreneurs do that.
Absolutely. I mean you rightly mentioned two things, which are part of the subtext of our interview, which are knowledge and evolution of geopolitics, knowledge and evolution of the world of technology.
If you allow me time, it is also important to say that the United States makes 67 billion euros in purchases of Made in Italy, and this year they are looking at 65 billion, so a drop of 3 percentage points, little more. We have to understand what will happen with duties, we don’t know yet: certainly it should be taken into account that duties should be averted as much as possible.
A study on this by the OECD gives us two important numbers at the level of projections. If there were 10 percentage points, and 60 for China, the number would be, according to the OECD, around 3.5 billion reduction of that 67 billion. If there were 20 percent, again with the 60 in China, there would be between 10 and 11 billion reduction.
Consider, however, that to this must be added 7.5 percentage points of increased purchasing capacity of the dollar, which then makes it easier for us because it slightly netizes the amount and impact of the duties, and especially that the distribution chain has shown in various situations that it also absorbs certain cost increases. Let’s hope that it will happen again and that if there are these duties, which we hope diplomacy will be able to avert, they will somehow at least be partly reabsorbed.
Unfortunately, it does look like Trump is starting them to do these tariffs that he announces, but we know (this I say this as a political journalist) that our government, our PM has a privileged relationship with Trump, which hopefully is also mediating with the rest of Europe, and so let’s see: it’s a long way to come yet however it was right to put our heads there and refer to queta situation.
It has been amply demonstrated that we have a privileged relationship so I think credit should be given to this government and Premier Meloni for being able to build over time relationships of solid relationships. Of course whatever the outcome is, because in short if it wasn’t the outcome could have been far worse. So I’m sure we will have the best possible outcome given the situation.
I agree with you, I thank you for your time, I thank you for doing this interview, hopefully we have also given a little bit of news because, I mean, at the end of the day, the listener may have also taken some tools to tell what is being done in this complicated world, which then is our world of the future and we have to be there always precisely with a great awareness.
Thank you to Matteo Zoppas entrepreneur and president of ICE, for being at our Good Morning America portraits goodbye and good work.
The article ICE President Matteo Zoppas interviewed by Claudio Brachino Good Morning America | Ep. 3 comes from TheNewyorker.
