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The good reputation of Italian companies deserves a better Industrial Policy

Our reputation precedes us. According to the RepTrak 2019 rankings published by the Reputation Institute, five of the world’s top 40 companies by reputation are Italian: Ferrero, Pirelli, Armani, Barilla and Lavazza. This is further proof that “Made in Italy” is a winning brand, capable of succeeding internationally and producing value for stockholders, if it manages to marry quality, technology, taste and a global vision with its deep-rooted identity and its culture of manufacturing excellence.

Rolex tops the ranking, followed by Lego and Walt Disney. Adidas, Microsoft, Sony, Canon, Michelin, Netflix and Bosch round out the Top 10. Ferrero is first among Italian companies, checking in at number 19. Pirelli is ranked 23rd, followed by Armani (24th), Barilla (31st) and Lavazza (38th, a whopping 11 spots higher than last year). The rankings are based on a survey conducted in January 2019 of more than 230,000 individuals. The reputation of about 10,000 companies in 15 different markets was measured and the factors considered included: comparative evaluations, brand reliability, awards for quality and corporate conduct, and the accuracy of a company’s communication towards consumers and investors.

A good reputation, of course, has a positive impact on a company’s business.Reputation stems from relationships formed with suppliers, customers and investors but also employees and the communities in which the corporate presence is felt. It influences new consumer trends and stimulates investment. It’s also a measure of trustworthiness and appeal for those entering the workforce and looking for a good place to work.

That Italian businesses are maintaining or even strengthening their reputation is good news, particularly in these times of controversy and recession. The OECD is forecasting a -0.2% negative growth for Italy in 2019, as part of a general slowdown of the world’s economy. The Bank of Italy is warning against “serious risks for the economy”, and other authoritative observers see a trend somewhere between recession and stagnation. The Lega-M5S government, on the other hand, had forecast a +1% growth, a prediction that now appears wildly unrealistic.

Yet, despite everything, the most dynamic businesses are braving the storm, growing, meeting the expectations of consumers and international investors, and proving once again that the battle is not lost. Victory, however, requires an economic and industrial policy capable of fuelling the motors of growth, which, incidentally, is just the opposite of what the “yellow-green” majority at Palazzo Chigi is currently doing.

What else do the Reputation Institute rankings tell us? These are five Italian multinationals with both a widespread presence across the globe and deep roots in their respective areas of origin (Alba and Piedmont, Milan, Parma, Turin), which ensures a strong business culture as well as the ability to blend memory with innovation. These are companies that invest heavily in research and development, and consistently deliver highly recognisable advertising and communication efforts, essential for strengthening brand trust. They are companies capable of growing according to the paradigms of the “good factory”, namely one that is well-designed, welcoming, well-lit, safe, and environmentally and socially sustainable (the hi-tech Pirelli plant designed by Renzo Piano and the state-of-the-art Lavazza plant, both located in Settimo Torinese, are perfect examples). For some time, these manufacturing groups have recognised sustainability as a crucial element of competitiveness.

These are companies committed to building a supply chain made of small and medium enterprises, which in turn stimulates innovation and productivity. These large corporations serve as the main economic engine for vast industrial networks – a landscape in stark contrast with the “good things in small packages” rhetoric of the current government, which seems to strongly favour small companies over large ones.

Of course, Italy’s five companies in the RepTrak Top 40 are well-established global leaders. But they are by no means isolated cases. Anyone familiar with the country’s corporate landscape knows that even during these extremely challenging years, countless businesses have invested and innovated, focussing on quality and on high-end products, doing research in collaboration with universities, and acquiring significant market shares around the world. They have created jobs and contributed to raising the quality of life for their employees and the communities in which they operate, often introducing innovative benefit packages. They have met the digital demands of the Industry 4.0 era, and served as catalysts for economic recovery.

These companies, therefore, deserve attention, trust, fiscal policies capable of stimulating innovation (the kind of measures which previous governments, on both sides of the political spectrum, used to trigger economic growth) and infrastructures, both material ones (rail roads, highways, ports and logistic systems, etc.) and immaterial ones (digital networks, investments in research and training). In short, they deserve an industrial policy. This is exactly what the Conte government and its ministers has so far neglected.