Fdi Monitor Invest in Lombardy
Total Page：16
File Type：pdf, Size：1020Kb
FDI MONITOR INVEST IN LOMBARDY KEY TRENDS IN ITALY 2013 September 2014 2 INDEX EXECUTIVE SUMMARY .......................................... 4 FOREIGN-INVESTED ENTERPRISES IN LOMBARDY .......................................... 6 FDI PROJECTS 2003-2012: AN INTERNATIONAL ASSESSMENT .......................................... 12 FDI PROJECTS IN LOMBARDY - 2013 ................................................... 21 3 EXECUTIVE SUMMARY Foreign-invested enterprises in Lombardy Lombardy hosts the headquarters of 4,634 foreign-invested firms, which represent 46,9% of all Italian companies with foreign holdings, with more than 400,000 employees and a turnover of 223.7 billion Euro. 3,263 foreign-invested enterprises are headquartered in the province of Milan, accounting for more than 275,000 employees and a turnover of 173.6 billion Euro. The province of Milan accounts for nearly one third of all foreign-invested firms in Italy, 29.8% of their employees and 34% of their turnover. Milan is by far the privileged location of foreign multinational enterprises in Italy in the wholesale sector and in business services. 4 Lombardy hosts the headquarters of more than 50% of all foreign-invested Italian firms in wholesale, ICT services and other professional services, as well in the publishing and printing industry. The presence of foreign MNEs in the province of Milan still retains a not negligible relief even in the manufacturing industries, and in particular in medium-high and high technology industries. Milan is home to the headquarters of 39% of North American companies established in Italy, compared to an average share of 33%; an incidence slightly higher than the average is recorded also for Asian investors and the Pacific. FDI projects 2003-2013: an international assessment In 2013 a total of 13,957 new FDI projects were recorded worldwide (-2.9% compared with 2012 and -18.9% compared with the 17,209 projects in 2008); they created nearly 1.9 million jobs, which is 136 average jobs per project, and represented a total capital investment of Euro 479 billion, with an average investment of Euro 34 million per project. The long-term trend of FDI projects closely follows the trend of the world economy: a strong growth until 2008, a sharp decline in 2009 at the peak of the global financial and economic crisis, a slow recovery in 2010 and 2011 and a new decline in 2012 which has been confirmed in 2013 with a further reduction in the number of new projects. However, in 2013 the long- period downward trend for the average size of new investment projects interrupted, both in terms of number of jobs created and capital investment. In this context, Italy’s position has been deteriorating significantly during the crisis, as a consequence either of the deep recession and financial constraints that struck the Italian economy, and of the well known structural problems which affect the attractiveness and competitiveness of the country. In 2013 Italy attracted only 113 FDI projects, the lowest level recorded since 2003, corresponding to a 0.75% share of the world total, a figure well below the weight of the Italian economy in terms of GDP and exports as well as FDI flows and stocks. Even Lombardy and Milan, which remain by far the preferred entry 5 point for multinational companies interested in entering Italy, suffered in the last years the loss of attractiveness of the country and the fall in the internal market consumption, which caused a sharp reduction in FDI projects concerning wholesale and retail activity. In the last period, a reduction of FDI projects aimed at start-up or development of industrial and techno¬logical activities, such as R&D, design, manufacturing, etc., also emerged, while the fall in the number of FDI projects was much lower in service businesses. This notwithstanding, Lombardy still remains close to the group of the ten most attractive regions of Western Europe, while Milan ranks among the Top 10 Western European cities by number of inward FDI projects since 2003, being is by far the preferred entry point for multinational companies interested in entering Italy. 6 FOREIGN-INVESTED ENTERPRISES IN LOMBARDY Detailed information of foreign-invested enterprises headquartered in Lombardy and Milan are provided by a recent update of the Reprint database, developed at the Politecnico di Milano. The database censuses both outward and inward foreign direct investments of Italian firms in the industrial sectors (mining and quarrying, manufacturing industries, energy, construction), as well as in wholesale activities and business services (logistic and transport, ICT services, other business services). Lombardy accounts for 16.4% of the total number of Italian residents, 18.4% of all Italian active companies and 22.7% of their employees, but its weight on the national total is significantly higher when considering internationalization indices (Figure 1). Lombardy accounts for 27.7% of national exports and 30.9% of total imports, while foreign subsidiaries of Lombardy-based firms represent 30.8% of all foreign holdings of Italian businesses and 34.5% 7 of their employees. Finally, 46.9% of all Italian companies with foreign holdings in Lombardy; these firms account for 43.9% of the total number of employees of all Italian foreign-invested firms (Figure 1). Figure 1 Lombardy: various indicators of demography, economic activity and internationalization, 2013 Source: based on Istat and Reprint database, Politecnico di Milano. resident population 16,3% number of active enterprises 18,4% number of employees of 22,7% active enterprises exports 27,7% imports 30,9% number of foreign subsidiaries of resident firms 30,8% employees of foreign subsidiaries 34,5% of resident firms number of foreign-invested firms 46,9% employees of foreign-invested firms 43,9% 0% 10% 20% 30% 40% 50% In particular, according to the Reprint database, 4,634 firms participated by foreign MNEs were active in Lombardy in 2013 in the industries covered by the database; these firms account more than 400,000 employees and a 223.7 billion Euro turnover in 2012 (Figure 2). 3,263 foreign-invested enterprises are headquartered in the province of Milan, accounting for more than 275,000 employees and a turnover of 173.6 billion Euro. The province 8 of Milan accounts for nearly one third of all foreign-invested firms in Italy, 29.8% of their employees and 34% of their turnover. Figure 2 Foreign-invested firms in Lombardy and in the province of Milan, by industry, 2013 Source: Reprint database, Politecnico di Milano. Number of foreign - Number of employees participated firms of foreign-participated firms Milan Lombardy Milan Lombardy Mining and quarrying 10 12 48 258 Manufacturing industry 508 1.057 97.470 188.714 Energy 222 269 4.688 5.127 Construction 73 97 4.030 4.572 Wholesale 1.277 1.790 57.604 71.590 Logistics and transport 146 221 18.820 24.504 ICT services 272 303 47.751 50.153 Other professional services 755 885 43.944 59.126 Total 3.263 4.634 274.355 404.044 The sectorial breakdown of foreign-participated firms headquartered in Milan spread across all industries covered by the database. In particular, Milan is by far the privileged location of foreign multinational enterprises in Italy in the wholesale sector and in business services (Figure 3). However, the presence of foreign MNEs in the province of Milan still retains a not negligible relief even in the manufacturing industries, and in particular in medium-high and high technology industries, such as pharmaceuticals, chemical products, electronics and instrumentation, as well as in the publishing and printing industry. With regard to the geographical origin of foreign investments there are no 9 Figure 3 Foreign-invested firms in the province of Milan and in Lombardy, by industry: % on Italian total, 2013 Source: Reprint database, Politecnico di Milano. mining and quarrying manufacturing industry food and beverages textiles, apparel, leather and shoes paper, paper product, pubblishing and printing pharmaceuticals and chemical products rubber and plastic products metals and mechanical products elettrical, electronic and optical products other manufacturing industries energy construction wholesale logistics and transport ICT services other professional services total % % % % % % % 0% 10 20 30 40 50 60 70 Milan Lombardy With regard to the geographical origin of foreign investments there are no substantial differences compared to the national average, with a strong predominance of investors originating form advanced countries, in particular Western Europe and North America (Figure 4). However, Milan is home to the headquarters of 39% of North American companies established in Italy 10 (compared to an average share of 33%); an incidence slightly higher than Figure 4 Foreign-invested firms in Lombardy and in the province of Milan, by geographic origin of the foreign investor, 2013 Source: Reprint database, Politecnico di Milano. Number of foreign - Number of employees participated firms of foreign-participated firms Milan Lombardy Milan Lombardy European Union (EU-27) 1.744 2.521 125.227 193.751 Other Western European countries 273 411 28.686 41.078 Other European countries 19 53 1.011 4.633 North America 854 1.126 95.278 131.034 Latin America 13 19 1.471 4.342 Africa 8 12 964 1.287 Asia 333 470 20.664 26.776 Oceania 19 22 1.054 1.143 Total 3.263 4.634 274.355 404.044 Figure 5 Foreign-invested firms in the province of Milan and in Lombardy, by geographic origin of the foreign investor: % on Italian total, 2013 Source: Reprint database, Politecnico di Milano. European Union (EU-27) other Western European countries other European countries North America Latin America Africa Asia Oceania total % % % % % % 0% 10 20 30 40 50 60 Milan Lombardy 11 FDI PROJECTS 2003-2013: AN INTERNATIONAL ASSESSMENT According to the fDi Markets database, developed by the fDi Intelligence from The Financial Times Ltd which tracks cross-border greenfield foreign direct investment (FDI) projects covering all sectors and countries, between 2003 and 2013 a total of 148,138 FDI projects have been recorded worldwide.