“Made In Italy”: What Is Behind The Worldwide Famous Label? by Forbes – Entrepreneurs

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Interiors of Galleria Vittorio Emanuele II. Built in 1875 this gallery is one of the most popular shopping areas in Milan.

Getty

From the post-World War II era, “Made in Italy” has confirmed itself as a label granting fine quality, authenticity and a sense of style internationally praised. A growing number of entrepreneurs managed through the decades to create a brand of high value all over the world, mixing the iconic Italian aesthetics with technology and innovation. The worth of the “Made in Italy” has granted many products prosperity in the markets, as it secured the solidity of the national economy.

The backbone of the economy

Even if the financial and consequent debt crisis severely undermined Italy’s economic framework, the country’s businesses were able to maintain their leading role in Europe. Italian enterprises kept their primacy in the export sector throughout the crisis, even with the fall of productivity and a growth rate fixed at 1% in decades. Many economists and businessmen thought that the Italian industrial outlook, made up of mostly numerous small and medium firms, could not compete with the rising low-cost manufacture coming from the Asian market, firstly China. Even if the entrance of the Asian competitors in the global market made things difficult for European producers, it soon became an opportunity as well. BrandZ drew up a list, together with WPP and Kantar, of the Top 30 Most Valuable Italian Brands in 2019 and found out that “Made in Italy” keeps growing thanks to the high-end luxury sector. A market where China is client number 1.

The ranking stated that luxury brands grew by 14% in the last 12 months, reaching a net-worth of €96,9 billion ($108.98b). On the top of the list we find Gucci, a company worth €24,4 billion ($27.44b), followed by other iconic Italian designers such as Prada, Giorgio Armani, Fendi, Bottega Veneta, Salvatore Ferragamo. Luxury makes up for around 40% of the total worth derived from the “Made in Italy” label and is an element of constant attraction for customers all over the world.

Structural difficulties

The brand was able to endure both the economic crisis and the rivalry of much cheaper manufacture. However, it has not been immune from structural difficulties that come with operating in Italy. The intricate bureaucratic trap, political instability, endemic tax evasion and inefficient infrastructures, to name a few, have always burden on businesses, forcing some out of the country. Cheaper workforce, less bureaucracy and more dynamic markets are just some of the reasons why so many historic Italian brands are saying goodbye to the Mediterranean country. The Italian nationalist party, the League, which is part of the coalition government that took power last year, presented a bill to stop companies relocating production abroad. If a brand wants to move its manufacture to another country, they are free to do so, but will not able to label their merchandise as “Made in Italy”.

Between glamour and harsh realities

The reality of major companies from Western Europe producing in the Eastern region of the continent or in Asia to cut costs by exploiting workers has been documented for years, but the practice of underpaid labor is not something that only concerns those areas. It was 2007 when a state channel on the Italian television broadcasted “Luxury Slaves”, a documentary that denounced how expensive “Made in Italy” products were actually made. A series of investigations followed, which found about factories in Italy where Chinese immigrant work-force in bad labor conditions was making those luxurious merchandises.

Last year the New Yorker brought up the issue again, revealing hordes of Chinese immigrants that assembled designer bags in Tuscany under dubious conditions. Because the “Made in Italy” label only takes into account where the production process takes place and does not consider the national origin of the craftsmen, this expedient is totally legal. Even if this is a central matter in analyzing what “Made in Italy” means, other than being a crucial human and labor rights issue, it is not raised by any means in the League’s bill. The reasons to protect the label go beyond the efforts to preserve manufacture within the Italian borders and should also address the actual labor behind “Made in Italy” luxury to unravel the contradictions between the glamorous outlook and the realities of manufacturing.

April 3, 2019 at 11:44AM
https://www.forbes.com/sites/annalisagirardi/2019/04/03/made-in-italy-what-is-behind-the-worldwide-famous-label/
Forbes – Entrepreneurs
http://www.forbes.com/entrepreneurs/
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