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The Small Town With A Big Place in Cycling

Sidi first factory

Today’s stage of the Giro features the sharp climb of the Forcella Mostaccin near the finish. The climb gets the attention because of the race yet the small town of Maser which lies at the foot of the hill is arguably more interesting because it’s central to the sport. This town and the area around it is host to Pinarello, Sidi, Campagnolo, Selle Italia and more, while Segafredo coffee and Oakley sunglasses all have connections to this small part of Italy. More than ever they’re crucial to the Italian economy.

Sidi began trading in 1960, that’s the first building in the photo at the top and you can see its swish modern factory just above. It began making hiking boots but within a decade moved into production of cycling shoes and motorcycle boots and today the brand is equally famous in cycling and motorsport. It’s based in the small town of Maser, a place of just 5,000 people. Just a few hundred metres away from Sidi’s factory is the Gaerne factory, another big name in cycling shoes and motorcycle boots.

Maserati

If this isn’t coincidence enough, both have “backwards names”:

  • Sidi was founded by Dino Signori. Take the first two letters of Dino and the first two from Signori and what have you got? Di and Si. Flip them backwards: Si-di.
  • Gaerne was founded by Ernesto Gazzola. Take the first four letters of Ernesto and first two of Gazzola to get Erne and Ga. Flip them backwards: Ga-erne.

Talking cobblers
Two shoe makers from the same town might sound odd given it’s such a small place but in fact several other footwear brands are in close proximity. Motorcycle and mountain bike brand Alpine Stars is on the same industrial estate as Sidi. Diadora, now owned by Geox, is 3.5km to the south of Maser. Northwave is 5km to the north-east. In fact the Veneto region is responsible for 70% of Italian sports shoes and 65% of the world’s ski boots and the Treviso province within it has the high concentration of cycling brands.

Premium brands
80% of Italian sunglasses come from this region too. 7km away from Maser is Montebelluna, home of Rudy Barbazza and his eponymous sunglasses company Rudy Project. It’s also where Luxottica was founded, the Italian company is the world leader in premium sunglasses and includes brands like Oakley and Rayban in its portfolio and makes the sunglasses for almost all the famous fashion names like Prada, Armani, Chanel and more while owning a string of retailers like Sunglass Hut from which to sell them all from. Brands like Benetton, Diesel, Marzotto and Stefanel come from the region. Pinarello is just a spin away – to coincide with the Giro’s visit they until their 2017 collection this evening – and Wilier Triestina and Campagnolo are not far either.

Lampre Merida

Made in Italy? Or Taiwan and Switzerland?

The Italian Jobs
Today the Italian economy is in a funk and this isn’t immediately obvious to people watching the Giro with its pink celebration but look closer and you can see the signs. Ads in La Gazzetta Dello Sport for Bank Mediolanum, sponsor of the blue points jersey, come with a “stability rating” to reassure depositors as the country’s banking system wobbles. Race organiser RCS is the midst of a bizarre and Byzantine financial web illustrated by today’s interview in La Repubblica with boardroom denizen Giovanni Bazzoli where masons and Catholicism intersect with corporate dealings. Meanwhile Michele Acquarone’s claims of wrongful dismissal at RCS Sport are taking years to initiate in the Italian courts, an illustration of how the country’s justice system is gummed up and millions are denied the chance of justice. Or just look how Italian cycling has dried up with only Lampre-Merida left in the World Tour. Is it even Italian? The team is half-funded by a Taiwanese bike brand and the corporate entity behind the team is CGS Cycling Team AG… of Switzerland.

Looking at more classic indicators, Italian growth for 2016 is forecast to be a meagre 1.2%, unemployment is at 12.4% and beginning to fall after hitting a record high in late 2014 and public debt is very high as the Rome government battles and negotiates with Brussels in order to meet the strictures of compliance with Europe’s single currency. If the Italian economy was a cyclist it’d be pedalling into a headwind with low blood sugar, a crisi di zuccheri.

With all these woes it’s companies like Sidi, Gaerne, Pinarello and more that keep the economy turning, the jobs onshore and the Veneto region is central to this. Italy is the eighth largest economy in the world and a large share of its wealth comes from mid-size businesses like Sidi and Gaerne and thousands of similar success stories, all family owned and often with a flair for design and marketing. A firm like Selle Italia – its new HQ is just 20km from Maser after it took over Selle San Marco recently – makes its goods in Italy and exports 90% of its output. These cycling names are replicated across many other sectors from ski wear to auto parts, leather goods to mechanical parts, fashion to food, a myriad of small to medium sized firms. 28km from Maser is Villorba where the coffee company Segafredo-Zanetti began, now a multinational and a sponsor of the Trek team and just nearby is De Longhi, maker of coffee machines. “I never imagined cycling would get me such reach in the world” purrs Massimo Zanetti, the President of Segafredo, in La Gazzetta Dello Sport today.

So far so good
These middling companies often stay this way. In America they’d be bought up and merged in the way SRAM snapped up the likes of Sachs, Sedis, Zipp and other component manufacturers to build a company capable of supplying a whole groupset: Italy is great at producing mid-size companies but struggles to convert them into big ones. Meanwhile on the ground the locals complain a lot of the factory jobs go to immigrants as the factories siphon workers in from Romania and Albania at their expense and this contributes to the rise of populist politics. Further into the mountains from today’s stage finish is Castelli which trades on its Italian heritage among other elements but has moved some work to lower cost Romania while Campagnolo’s workers went on strike over a redundancy scheme and plans to move jobs to Romania.

Conclusion
The Giro visits the Veneto region and the province of Treviso today with it comes the chance to briefly shine a spotlight on the Italian cycling industry and the concentration of brands that are all within a short ride of today’s stage finish. It’s not by accident, the proliferation of shoe manufacturers stems from the past production of leather goods but the concentration of famous brand names is exceptional, this is the Silicon Valley of sporting goods. The Veneto isn’t unique, there are pockets in northern Italy with similar but smaller stories like Colnago and SMS Santini in between Milan and Bergamo. All these small firms are perfect case-study examples of businesses that started in Italy’s post-war boom, that remain family-owned and rely on craftsmanship and design to export a large share of their production. As the riders approach the Forcella Mostaccin some will tighten their shoes in anticipation of the climb, and many will be reaching for their Sidis which are made just down the road.

Comments on this entry are closed.

  • Anonymous Wednesday, 18 May 2016, 12:03 pm

    Interesting piece. Long live great Italian brands, hopefully made in Italy.

    • Ecky Thumps Wednesday, 18 May 2016, 12:08 pm

      – by Italians. On a decent, liveable wage.

      • Anonymous Wednesday, 18 May 2016, 12:37 pm

        Exactly!

      • J Evans Wednesday, 18 May 2016, 12:39 pm

        By anyone on a decent, liveable wage.

        • Ecky Thump Wednesday, 18 May 2016, 12:52 pm

          The trouble is, JE, ‘anyone’ has a different definition of what is decent and liveable.
          And there’s always someone, from somewhere, who will do the work for less.
          Yet Pinarello have just opened a new store in Regent Street, London with barely a bicycle on display under £8000 (including some of the cast-offs from Team Sky).
          Frame made in Taiwan, assembled by an immigrant workforce that has ousted the locals?

          • Anonymous Wednesday, 18 May 2016, 1:08 pm

            There will be mortgages available soon to buy bikes, 100% no deposit 25 year terms.

          • J Evans Wednesday, 18 May 2016, 1:19 pm

            Made in Italy on a wage that is decent and liveable for anyone who lives in Italy.
            And you can substitute any country for ‘Italy’ in that sentence.
            Governments could ensure that any minimum wage was decent and liveable for the people who live in the country.
            As it is, they prioritise business and ensure the wages are at a level that make the maximum profit for people who are already rich.
            (I’ll stop there rather than go on all day.)

          • Anonymous Wednesday, 18 May 2016, 1:30 pm

            I support your first comment wholeheartedly, but there is a bit of humorous irony in that the Italians were (I think) one of the first large scale low wage, harder working, immigrant labor forces at the Ford Motor Co. after the turn of the last century.

            The shame of it is not the workers, who are just trying to improve their own situation, but the almost inevitable need for companies to grow in size and increase profit margins.

          • Anonymous Wednesday, 18 May 2016, 1:36 pm

            @JEvans

            One of the problems here is that the minute the government ensures a wage just like a union, the need for an employee to hustle goes out the window. This is certainly bad for the company, who may have been taking advantage themselves, but it has a detrimental effect on the region as well.

          • The Inner Ring Wednesday, 18 May 2016, 1:42 pm

            If this is going to get in to political tennis game with people lobbing the ball back and forth I’ll zapp the comments.

          • Ecky Thump Wednesday, 18 May 2016, 2:01 pm

            Let’s not talk of economic migrants and irony!

          • bolshevism is dead Wednesday, 18 May 2016, 4:09 pm

            zap comments ? the way you zapped one from yesterday asking an anonymous poster to define “deuntegrating” ? how was that offensive ? or worth a zap ?
            certainly most of comments on this article could be zapped for just being ignorant of how an economy actually works.

          • Kev Thursday, 19 May 2016, 7:56 am

            That’s a Phil Griffiths financed enterprise (Pinarello Regent Street store) managed by his son, Kevin.

          • Merino Thursday, 19 May 2016, 10:17 am

            Hi Kev,

            I’m not looking for agro but it may be good if you could give your opinion why certain bikes are so expensive?

            If your a middle aged amateur what percentage of improvement would you get per £ spent on bikes once you go above £2000 for instance? I know it has a lot of vagaries but it would be good to see it from a different perspective.

          • Kev Thursday, 19 May 2016, 11:35 am

            Hey Merino
            No worries, I’m not Rocky Balboa!
            I’d point out, that I’m not Kevin Griffiths, owner / manager of the Regent St outlet.

            You asked “why certain bikes, so expensive” ?
            If you mean, the Italian branded teambikes, then it boils down to the equipment, fitted,
            how the frames are manufactured, R&D / Construction / Marketing / Brand Costs / Distribution Margins / Dealer Profit / etc.
            I’m sure some hot shot economics genius, may respond with an accountant proof perspective,
            but that’s the bottom line.
            Team bikes are available at wide ranging prices, worldwide. Look at Colnago’s – via dealer networks, you can pay up to 14k GBP for a top model. If you look harder, you can find an established outlet in the south coast of UK – who sells them for a lot less, and has done so, for more than 40 years.

            The basics, about what level of bike to buy, varies on each opinion, from “experts”.
            It’s difficult to quantify how much percentage you’d improve – fitness, ambition, coaching, all are relevant, to improvements, relative to your cycling ability.

            🙂

          • Merino Thursday, 19 May 2016, 11:40 am

            Thanks for reply.

            I did think you were possibly Kevin Griffiths.

          • Kev Thursday, 19 May 2016, 11:44 am

            coughs, splutters, staggers around room, head going all woozy…… at that comment!

            Nope, I’m better looking 🙂

          • J Evans Thursday, 19 May 2016, 12:39 pm

            Bolshevism is dead:
            ‘How an economy actually works’ is not an innate thing – an economy is how we make it work.
            Capitalists tell us – and most believe them – that the only way it works is for the aim to be maximum profit for business. But we could create economies where the aim is better lives for everyone.
            The most simplistic of these capitalist lies is that it’s outright capitalism or communism. Half an hour of research would show how ludicrous an idea this is.
            All of this is steeped in the dogma that hard work is a morally righteous thing (hence the ‘need’ for ‘hustle’) – a lie hammered into us to ensure that we keep working for them.

        • gabriele Wednesday, 18 May 2016, 1:40 pm

          @ one of the Anons
          “the minute the government ensures a wage just like a union, the need for an employee to hustle goes out the window”.
          This is plain false like heaps of economics papers and data do show, both comparing different experiences within Italy and looking at the situation of different countries.

          • Pierre-Jean Wednesday, 18 May 2016, 4:27 pm

            As if hustling was a good thing in itself… And there’s no way all Governments in the world will come together to enforce decent work and social upgrading throughout the planet, there will always be one government or some who will see the obvious competitive advantage of social downgrading and attracting investment… and then the rest will have to follow suit or lose out. You can’t deal with this global problem in a global way. It hasn’t even been possible so far at EU level!

      • Larry T Wednesday, 18 May 2016, 4:15 pm

        SI! When the stuff you make is the best, you can pay reasonable wages and make it in Italy. When you start to cut corners and try to jack up your profit margin, nobody is too excited to pay the higher prices vs cheap stuff from Asia. I’m happy the companies like Sidi and the rest have resisted the American idea that unless you’re growing constantly you’re falling behind. What’s wrong with making a decent living – not everyone needs to be a billionaire. W ITALIA!

  • Anonymous Wednesday, 18 May 2016, 1:16 pm

    There a more than a few aspects that set this blog apart and above the others, regional stories like this one of them.

  • Steven Smith Wednesday, 18 May 2016, 1:25 pm

    With a very intimate first hand knowledge of Castelli, I’d like to point out some inaccuracies in this article. While INRNG correctly noted that our HQ is further into the mountains (in beautiful Fonzaso), saying that we trade on our Italian heritage but have moved plant to lower cost Romania is far from accurate. We do all design, development, research, testing, sourcing, production planning and coordination, warehousing, sales and marketing from Italy and we have 150 jobs that pay a decent wage that for most of our employees is higher than the market rate. While less than 10% of our products are actually stitched in Italy, the vast majority of our fabrics are made in Italy, and we coordinate a part of production (cutting, stitching, finishing) in Eastern Europe where at least 1000 families have liveable wages while allowing us to provide cyclists with a quality product at a reasonable price. In addition to our Italian HQ we have 38 people in Portland, Oregon and further manufacturing in the US.
    We’re not just trading on heritage, but building on Italian textile know-how, creativity, and the world’s best testing ground.

    • The Inner Ring Wednesday, 18 May 2016, 1:30 pm

      Thanks for this Steven, although I’m not sure if my original text was factually inaccurate, that Castelli is Italian brand but manufactures a lot abroad? Either way I welcome the fuller explanation and readers, like me can learn from this, for example I didn’t know there were so many working in the US. And if Castelli trades on its Italian heritage, it also trades on images of modernity, inventive textiles, pro team sponsorship etc etc

      • gabriele Wednesday, 18 May 2016, 1:37 pm

        I think that an important point made by Steven which might be missed out is that a “vast majority” (how much would also be interesting data) of their *fabrics* are made in Italy. That’s something you can’t take for granted – not at all: the fabrics production of whole Italian provinces has been moved abroad (especially to China) during the last decade, hence the fact of working on Italian-made fabrics is far from irrelevant.
        OTOH, you should also compare that to competitors like Assos, trading on Swiss heritage 🙂 while at the same time manufacturing elsewhere.

        • The Inner Ring Wednesday, 18 May 2016, 2:06 pm

          You’re right and Italy is one of the last countries in Europe with a substantial textile industry left making fabrics, a lot of which are the same mid-size family firms with a flair for design and marketing that keep them going in the face of Italy’s headwinds.

        • Ecky Thump Wednesday, 18 May 2016, 2:19 pm

          I’m just looking at a couple of Castelli skin suits I have; one made in USA and the other in Bosnia and Herzegovina…

          • gabriele Wednesday, 18 May 2016, 2:28 pm

            That generally refers to the final manufacturing (as Steven says, leass than 10% of the products end up being stitched in Italy), but the fabrics do count a lot, too – especially in technical clothes, I’d dare to say.

      • Mick Tarrant Wednesday, 18 May 2016, 5:04 pm

        Yes, I know that we’re talking Italia here but for the record, not aware of much in house production at a certain high end Swiss manufacturer.

        • Kev Wednesday, 18 May 2016, 6:19 pm

          probably best you don’t delve too deeply into the Descente world then Mick

          • Mick Tarrant Thursday, 19 May 2016, 1:35 pm

            Yep, probably another world Kev and one that deeply depresses me as there was a time when Descente produced some quality kit but that was then, this is now. Personally, I enjoy the aspect of visiting one of our suppliers and observing the manufacturing process happening in-house.
            Not just because it is made in the same country of origin as the Manufacturer but also because it provides employment for a great many of the inhabitants of what is sometimes a very small community. Old fashioned yes but heart warming neverthless.

    • MickR Wednesday, 18 May 2016, 3:33 pm

      I too have a Castelli kit that says Made in America. It was designed by an artist in Portland so, I wonder was the fabric made/printed in the US too?

      Conversely, I’ve bought dress shirts that say Fabric – Italy, Fabrication – China. It seems crazy to make fabric in Italy, ship it to China to be cut and sewn into a garment, and then shipped to the USA for me to wear. But that shows how far the cheap labor of stitching can take you in the fight for price point/cost of goods. How much more would it cost to cut and sew in ITA? More than shipping bolts of fabric to China on a oil-munching steamship, obviously.

      • Tovarisch Wednesday, 18 May 2016, 3:59 pm

        I recently saw a graphic showing all the moves involved in manufacturing a Marks and Spencer suit. 10 different countries and 12 different transfers were involved. I’ll see if I can find it.

        • Tovarisch Wednesday, 18 May 2016, 4:09 pm
          • GeorgeY Thursday, 19 May 2016, 10:45 am

            I am itching to make a political comment but I will not, respecting Mr Ring’s hospitality.

            On the subject of labor cost I guess you are aware that for industrial products 90% of the total cost is labor. So I have a little story to share with you in relation to Italy: FIAT group had financial problems 20 years ago because it sold too many small cars (Cinquecento) and relatively few family saloons (Alfa Romeo). Their problem was that the profit margin for small cars was small while the cost of manufacturing was about the same as larger cars which had higher profit margins.

      • Big Drag Wednesday, 18 May 2016, 5:26 pm

        Welcome to the global economy.

        Aside from shipping materials a third of the way around the world, and a finished shirt another third, sub-text of your comment is that choice of Chinese fabrication is based on cheap labor. To the contrary, many Chinese factory owners have been working at mastering high quality workmanship, investing in the most modern of equipment, and innovating on process control for 25 years. Surprising to most people, a sewing worker’s wages in Romania are lower than a worker in China. And, in my opinion the quality of Romanian production is not nearly as good.

        There is a reason bike brands like BMC, Pinarello, etc have moved frame production to Taiwan. Taiwanese factories have invested in highly trained engineers, production workers, machinery and planning systems.

        As labor rates rise in these developing countries, it is the vision and investment of countries and their entrepreneurs that will determine where and how things get made.

        • channel_zero Wednesday, 18 May 2016, 8:15 pm

          There is a reason bike brands like BMC, Pinarello, etc have moved frame production to Taiwan.

          This is a little dishonest. They buy from Taiwan’s OEM industry as do most of the bicycle industry world. They benefit from a depressed currency exchange rate, though not as much as the mainland.

          I just have a problem with the representation that BMC and Pinarello own Taiwanese manufacturing plants. They certainly didn’t when I was in the business. I don’t know why that would change now as it is cheaper and easier to play the OEMs off of each other.

          To be really clear: without a doubt, Taiwanese quality is world class with production technology that follows “bleeding edge” tech. The labor/worker standards are almost first world. All the leading manufacturers produce great product.

    • Patti Golebieski Wednesday, 18 May 2016, 11:45 pm

      I enjoyed reading your comments, and enjoyed working in the Portland location. Your comment “pay a decent wage that for most of our employees is higher than the market rate” did not actually work out for me. When I was offered the job, the message was “here’s the offer, no negotiation” I accepted, but when I accepted, the offer was lower. I wanted the work, the opportunity to get back in my game, so I accepted the lower offer. I think in the long run, that was one of the reasons that I decided to leave. Working on the Castelli brand was really fun, and it was challenging to move fabrics from Italy to various production locations. Working on top-notch, well engineered apparel is challenging and rewarding work. Hope you have continued success with the Castelli brand.

    • Bemused Thursday, 19 May 2016, 2:31 am

      When did this formal Steven business start Steve? 😉

      Just wanted to add that Castelli USA is a separate company owned by Greg Cowan (an ex-Nike buddy of Steve’s). And of course Castelli Europe is owned by the Sportful Cremonese family. In fact they bought Castelli and revitalised it through some serious innovations (driven by the likes of Cervelo Test Team but mostly by a Mr Steven Smith who regularly switched sides between Sportful/Castelli).

      And a lot of Sportful Bodyfit Pro innovation can be traced back to feedback from Bjarne Riise.

  • Anonymous Wednesday, 18 May 2016, 1:29 pm

    A rising tide raises all boats!

  • Jono Wednesday, 18 May 2016, 3:39 pm

    Good read. You mention Acquarone what has happened to his case?

    • The Inner Ring Wednesday, 18 May 2016, 3:53 pm

      Nothing I gather. His case was scheduled to go to court earlier this year but was adjourned and nothing has happened since. Things like this happen a lot, it takes months and even years to begin a case but if someone is ill on the day, like a witness or a clerk, then the whole case is pushed back by months again. Bad for Italy and worth remembering whenever you read an Italian cyclist saying “I’ll sue” (eg Aru to Henderson) because there case could take years to happen were the threat ever to be followed through.

      • Mick Tarrant Thursday, 19 May 2016, 1:48 pm

        Got Michele Acquarone down as a decent bloke who has been well and truly shafted. It is in my view a case of “we need a scapegoat and it happened on his watch” He does of course have a problem finding new employment with this stigma hanging over him and at the same time needs to fund his legal action. He’s a regular guy with family and the every day financial commitments associated with that and thus, is finding it hard to clear his name. If he was guilty as charged, he’d have no problem with that and would not be fighting so hard to clear his name. Key points in this case are on a concise pinned tweet on his Twitter feed http://tinyurl.com/j684rx3
        Buona Fortuna Michel

  • ATWJ Wednesday, 18 May 2016, 4:12 pm

    Better than thinking of (depressing) Italian judiciary or political zingers is the beautiful Villa Barbaro at Maser — Palladio and Veronese! — where one can see the sort of inspiration pushing Italian design ahead still. Watch for it on the route today….

    • Vivre Wednesday, 18 May 2016, 6:16 pm

      Did you visit the Elite design studios in Fontaniva? This innovative firm purchased an ancient fornaci (furnace) historically used to convert the Brenta’s calcium-rich stones into the white powder base used to plaster Palladio’s architecture. Elite’s owners preserved and repurposed the building into a showplace of history and modern design. Look at Elite’s website under “Company” for a glimpse. If you haven’t already, you will definitely want to see it.

  • Yves Wednesday, 18 May 2016, 4:34 pm

    Comme un symbole, Asolo, la ville d’arrivée est également le nom d’une prestigieuse marque de chaussures et d’équipement dédié à l’alpinisme et à la randonnée. Basée à proximité d’ Asolo à Nervesa della Battaglia, l’entreprise dispose également d’un site de production en Roumanie. https://www.asolo.com/fr/societe/notre-histoire.html?removeAlertCookie=yes

  • Vivre Wednesday, 18 May 2016, 6:03 pm

    Having cycled and toured this region, experiencing its variety of terrain, layers of history, attractive people and towns, and the intriguing Veneto Model of economic enhancement led me to regard this area as where I’m most comfortable in Italy. Within cycling distance from Asolo are the Prosecco wine region with its green-gold vineyards climbing impossibly steep hillsides, the Monte Grappa massif with it’s WWI history and myriad roadways leading to an over 1500 meter summit, Andrea Palladio architecture everywhere, Venezia a few kilometers south, and the Dolomites just to the north. By embracing and enhancing cycling industry and culture, Veneto understands how to attract the huge sums we hobbyists spend on our bikes and travel. I find myself believing someday my little corner of the world might understand this and enhance cycling-focussed tourism. We have a good start but a long way to go, some governmental enhancements accomplished using the Veneto Model could work well here and float maybe not all, but quite a few boats. Thanks Inrng for your reminder, and grazie Giro d’Italia for highlighting this astonishing region again. Time to nurture my one extravagant indulgence and book a trip to Veneto.

  • CA Wednesday, 18 May 2016, 6:25 pm

    Really interesting article Inrng. You have to applaud Italian companies for maintaining their focus on quality craftsmanship versus adopting the more popular approach of full global supply chains.

    The only concern are Italy’s falling employment and economic scores – the solution for which is far beyond the scope of this website, so no point discussing this farther!

  • Mark Ridy Wednesday, 18 May 2016, 8:17 pm

    Hi MickR we do some work with Castelli here in the USA and they do the printing and fabrication for custom kit here in the state of Washington.

  • channel_zero Wednesday, 18 May 2016, 8:22 pm

    In America they’d be bought up and merged in the way SRAM snapped up the likes of Sachs, Sedis, Zipp

    Maybe some Italian readers can inform us as to how easy it is to use a buyout target’s equity as borrowed money.

    In the U.S. using the buyout target’s equity as “borrowed money” is standard practice. This is relatively easy credit and dramatically increases merger/buyouts.

    • CA Wednesday, 18 May 2016, 8:50 pm

      Not sure “equity as borrowed money” is the reason why either M&A is a) common in the US or b) the opposite in Italy. It might be a factor, but only a small factor.

  • Alessandroson Thursday, 19 May 2016, 10:49 am

    As a Brit but Italian resident (and former M&A lawyer many years back) I know how the system of doing business here makes it extremely difficult for any company to grow to any size without the paperwork demands of the government strangling it. The tax system is ridiculous as nobody (even the professionals) understands it, and the government has multiple different mandated versions of documents to try to deal with everything (apart from the thing you want it to).
    Foreign businesses try to buy Italian businesses but then wonder what the heck it is they are looking at, as to make the work involves managing many things that simply don’t make sense – but which to the locals are just how its always been done.
    There is also a bloated and unaccountable government “back office” that nobody wants to deal with and that represents a massive voter block that no government can alienate. (We now have a smaller version of this as the wonderful legacy of the Blair/Brown years to deal with in the UK too).
    Also culturally many Italians I have met – other than the economic migrants we know of so well across the world – are traditionally quite conservative, hence staying in the area they were born in and working for a family business is quite normal. When you look at places like Pinarello, Colnago … or large wine producers…. or fashion businesses like Pucci or Ferragamo they have generations of the same family running the business. IMHO its a miracle that any Italian business grows to be a global one given what lack of support their government provides.
    What makes Italy (and a lot of Europe) is so charming and probably so creative is that its beautiful, crazy, unpredictable and slightly broken; a lot like the Giro in fact, with crazy off-road mountain time trials, and perverse May weather. Its the broken bits that add to its charm, as why else do people buy antiques, or distressed jeans if its not to enjoy the “character” thats been worn in? Italy is arguably no “prettier” that California, and it certainly doesn’t function anywhere near as well, but I’d argue that its much more interesting.
    The area in question is a brilliant combination of Italian and German; creative and practical, rule-breakers and process experts. No wonder that there are so many more global successes here than in Calabria.

    • gabriele Thursday, 19 May 2016, 11:47 am

      Fair points, still – as Pierre-Jean points out above – we’d need to agree about the meaning of *functioning*, since, even if in Italy things are growing more and more broken, I’d dare to say that in two-thirds of the country life for the average citizen *works better* than in California (not to speak of other places in the USA).

      As a side point – and in order to clarify those “two-thirds” I referred to – I need to add that the differences between North and South don’t depend on the different historical legacy (the “German” thing) as much as on political and social processes which date back no further than the late 19th century.

      Milan, for example, had been Spanish quite longer than it then stayed “German” (the Hasburg and the Austrian Empire aren’t precisely “German”, anyway) and, speaking of Veneto, it was “German” only for a few decades, a short period when you look at the centuries-long history of the Republic of Venice (and, well, a relatively short time even when you match it to the 150 years of *Italian* history). The cultural legacy of the Hasburgs was notable, but it didn’t represent a shift from a socio-economical POV, even if a vulgarised vision usually awards huge importance to that phase (it’s a rather typical question of self-representation).

      Veneto came out of the Austrian dominion as an impoverished area (significantly, the Veneti have often been called “terroni del Nord”, with “terroni” being the very derogatory word used in Northern Italy to refer to whoever is from the South).
      Its expansion dates back only to the first decades of the 20th century and, later, to the – rather slow, at first – reconstruction which followed the II WW.
      Any comparison with Calabria makes little sense: too different a territory, and nowadays it still has less than half the population of Veneto, distributed on a similar extension.
      OTOH, if you think about Naples, you might become aware of the spin given by the unification to the pre-existing situations. Naples had been one of the wealthiest and most creative city of Europe during the 17th century and, despite political convulsions, during the following one, too. The first Italian railway was built there and industries (like the textile one, to avoid being too much OT 😛 ) flourished.
      What happened later, including the making-up of a narrative about the insurmountable corruption of the Southern Kingdom of the Two Sicilies (which had quite a lot of troubles, indeed, but which was all the same quite far from the stereotype depicted afterwards), was a consequence of an unbalanced process of unification which favoured – also from an economic POV – the areas nearer to the political centre of the new-born country.

      Perhaps Europe could learn a lesson or two studying what happened in Italy… and how that, in the long term, became a burden for everyone, not only for those who paid the highest price in the first place.

    • Anonymous Thursday, 19 May 2016, 1:46 pm

      I am pretty sure that we have a different idea what “broken” means or what has value and what not. For some time in my life I had my own business and although, the way our society is structured, I had of course to earn money with it in order to live, earning money was in no way the reason to have that business. Money wasn’t even an important part of it for me (maybe one of the reasons why ironically I did make money with it?). I know it is hard to imagine for some, but there are people who don’t work to make money or open a business to grow that business. They just want to earn their living, do something they like, live in a community they can contribute to.

  • MattF Thursday, 19 May 2016, 12:12 pm

    Fascinating article inrng. The breadth of your knowledge is astounding. Keep them coming please and don’t let the shrill ‘experts’ (possibly all lawyers?) put you off.

    • CA Thursday, 19 May 2016, 3:43 pm

      Ha! Good one:

      “Shrill ‘experts’ (possibly all lawyers?)”

  • Gabriel Constantin Thursday, 19 May 2016, 1:53 pm

    I’m from România. I have Sidis made in România, I have Specialized, Mavic, Odlo kit made here. I ride on Mavic wheels made here.

    A lot of brands come here to make their stuff. I mean put together from “raw” parts. Also, stuff like high precision bearings were already manufactured locally.
    There are skilled workers here. The country has a history in manufacturing, textiles especially.

    From what I gather though, most are payed close to minimum wage, which in Romania isn’t sufficient for a decent modern life.

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