Thursday, Dec 14, 2017
Industry & Trade | Europe | Italy

Lombardy Region

Beautiful Lombardy amongst “Four Motors” driving EU economy


1 year ago

Lake Garda, Lombardy
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With a €300 billion GDP, tight integration of the public and private sector and more than double the national average of investment in R&D, Lombardy is a leading center of technology, innovation, tourism and agriculture, and has built a favorable environment for foreign investment across the board

Geographically on the principal east-west axis of Europe and at the heart of its most economically advanced area, Lombardy is not only the economic engine of Italy, but also the continent. The region is ranked number one in attracting cross-border investments amongst the group of four highly industrialized regions in Europe known as the “Four Motors” (the others being the Rhône-Alpes region in France, the Catalonia region in Spain and Baden-Württemberg in Germany).

Major internationals have already established long-term investments in Lombardy and interest from Chinese firms in setting up there is rising substantially – and for multiple good reasons.

Home to Milan, Italy’s largest metropolitan area and fashion and financial capital, Lombardy accounts for a sixth of Italy’s population and between a fifth and a quarter of its GDP – a good part of which is pumped into the economy by more than 800,000 companies doing business in the 11 provinces comprising the regional entity. There is much to be said about the ongoing transformation of Italy’s most prosperous (and populous) region into a place skewed less towards traditional industrial sectors and agriculture and more in the direction of cutting-edge research, development, and innovation.  

“We are at the center of innovation. Lombardy’s vocation is for research and innovation in healthcare, welfare and manufacturing,” says Roberto Maroni, President of Lombardy, who argues that the key to the region’s proven success lies in the ability to integrate the public and private sectors. “We work together and we create fruitful synergies. This tight integration is what we call the ‘Lombardy model’,” Mr. Maroni explains.

Lombardy has its aims set high and is making every effort to facilitate the kind of investment flows they’d particularly like to encourage by creating tax free zones, tax holidays or in some cases guaranteeing up to half the start-up capital. Innovative healthcare solutions and pharmaceuticals top its “most desirable” lists, along with specialized software applications.



At the present time, regional authorities earmark 1.8% of Lombardy’s  €300 billion GDP ($335 billion) for research and development, that is, double the Italian average. Mr. Maroni would like to double that over the next few years. Meanwhile, the Italian government has decided to invest €1.5 billion over 10 years to create the Human Technopole, the world’s most important and innovative research center on genomics. That, Mr. Maroni adds, is sure to make Lombardy one of the most important global centers for healthcare and medicine.

Occupying second position on the to-do list is manufacturing of all kinds. As from next year, the region will permanently host the World Manufacturing Forum, currently being held in different countries across Europe. As Mr. Maroni rightly notes, “digitalization and high-tech sectors create opportunities for us, since devices have to be manufactured by someone. We are investing in this direction and emerging more and more into the international spotlight.

Pharmaceuticals, biotech and medical devices

Pharmaceuticals in general and bio-technology solutions in particular have come to occupy a critically important space on the genome of the Italian economy. There are now 174 pharmaceutical companies incorporated in Italy. Their factories, laboratories and logistics employ approximately 63,000 people, just fewer than 10% of whom are dedicated to full-time research.  Total turnover for the industry is valued at €29 billion ($32.3 billion), with 72% of the revenue connected to export.

Lombardy is the leading region in Italy for the pharmaceutical and biotechnology sectors. About 60% of the productive pharmaceutical enterprises operating in the country are located in Lombardy, with 31,000 people employed directly in the industry and 17,000 workers in the supply chain. Of all the Italian companies that operate in biotechnology, 35% reside in Lombardy, and the region accounts for 73% of national investments in bio-technology R&D. These companies employ 11,555 people and generate annual revenues of €2.4 billion ($2.7 billion).

Firms like Dompé have helped to put Lombardy region at the forefront of the bio-technology industry. CEO Eugenio Aringhieri says Dompé’s researchers are intensely focused on uncommon pathologies, with special attention to those for which there is no known cure. In addition, they are exploring avenues of treatment for so-called rare and orphan diseases that affect only handful of individuals, but bring devastating and often heartbreaking consequences.

“The future will be biotech,” says Mr. Aringhieri. “Progress in this field allows us to find solutions to conditions previously considered untreatable. Bio-pharmaceutical has already had a definite impact on patients’ life expectancy.”

“We have an open innovation approach. We prefer to share what we know with other skilled stakeholders and discuss with them from the beginning the best ways to address any challenges,” he says.  

Lombardy is also an ideal and leading location for companies involved in the manufacturing of medical devices. Hearing aid manufacturer, Amplifon has been operating in the region for more than 60 years. It was the first company to introduce digital hearing devices in Italy and today is regarded as a world leader in providing effective and affordable hearing solutions to people with auditory challenges.

According to the CEO, Enrico Vita, it ranks first or second in almost all of the 22 countries in which it operates through nearly 8,700 sales and service points.  The company, he asserts, owes its success to a commitment to ceaseless technological innovation at the same time that it works on the human level to find customized solutions to improve the hearing experience of people with different lifestyles and health issues.

“The industry is structurally growing,” says Mr. Vita, “In the last five years, growth was between 4 and 5% and it is expected that the trend will continue for the next five years.” Demography is one of the dynamics driving sales, he adds, as baby boomers reach the age and stage where hearing problems can be expected to impact on their lives.

“At Amplifon, we had a fantastic 2015, growing by 16% over the year,” says Mr. Vita. “That growth was very healthy, because more than half of it was organic. This means that at the end of the day, it is not a single region or a country driving the performance, but rather our business model. It is working in all the regions – Europe, Asia-Pacific and the Americas – in which we operate.”

Agri-food industry

With almost 45% of the territory covered by agricultural areas, Lombardy commands a prestigious position in the production of high-quality agri-foods, and is home to around 250 traditional products such as cheese and wine. The region has a total of 11,000 winemakers and its wines hold an increasingly prominent position in Italy and around the world

Several of Lombardy’s food products have PDO (protected designation of origin) or PGI (protected geographical indication) status. Perhaps one of the best-loved and well known PDO products to come from the region is Grana Padano, a hard, slow-ripened, semi-fat cheese, comparable to Parmigiano Reggiano or “parmesan” cheese.

According to Nicola Cesare Baldrighi, President of the Grana Padano Protection Consortium, the association of farmers and cheesemakers who produce the hard grating cheese, Grana Padano is one of the most distinctive food products of the ‘Made in Italy’ campaign, which was launched in 2015 by the Italian Trade Agency to drive awareness of authentic Italian foods and wines.

Grana Padano received PDO status in 1996. And Mr. Baldrighi sees the consortium he heads playing a key role in helping consumers in other countries avoid being taken in with what are in essence “knock-off” alternatives – the imitations and ‘Made in Italy’ counterfeits of products with PDO or other official certification.        

Regional president Mr. Maroni says that Lombardy is leading the fight against “counterfeiting and Italian-sounding products that, because of the packaging, make people believe they are made in Italy, but they have nothing to do with Italy and the quality of our products.”


“We are at the center of innovation. Lombardy’s vocation is for research and innovation in healthcare. We work together and we create fruitful synergies. This tight integration is what we call the ‘Lombardy model’”

Roberto Maroni,
President, Lombardy Region


Tourism

Lombardy is widely known throughout the world as a prime destination for discerning tourists, but indeed it is not just the gastronomy that attracts visitors. The region is an all-round cultural treasure house – home to Milan, Italy’s capital of style where you will find artistic gems such as Da Vinci’s “The Last Supper”, and Mantua, the country’s 2016 Capital of Culture – and boasts breathtaking Alpine lakes, snowcapped peaks, and no less than 10 UNESCO World Heritage sights.

“Lombardy is the real land for tourism. We have a huge heritage that deserves more global attention” says Mr. Maroni. “What we need to do in this area is invest more in marketing and to raise awareness about the richness we have in our region.

“We launched the Lombardy Year of Tourism from May this year to May next year. We put €60 million on the table to promote the territory. For instance, not many people know that we have 50 golf courses. Most of them are located in unique places.

“So, for instance, American tourists can come to enjoy playing golf and then visit incredible UNESCO sites. Ten days in Lombardy, every day a different UNESCO site and a different golf course. This is something that only Lombardy and few other regions in the world can offer. Add on top of that, Italian food, fashion, and the beauty of our lakes and mountains, and it becomes an experience like no other.”

Education

With a large focus on technology, R&D and innovation, investment in higher education and human capital is of vital importance in the region. Lombardy already has a large higher education system, with some of the most specialized universities and biggest research budget in Italy.

“We have 13 universities, both private and public,” says Mr. Maroni. “We have 500 research centers, both private and public. We have eight technology parks that serve as incubators where young people can develop their ideas into projects and create start-ups.”    

Lombardy has been an important benefactor of the federal government’s education reform agenda, spearheaded by the Minister of Education, Universities and Research, Stefania Giannini.

“We added €3 billion ($3.3 billion) to the education budget to hire new teachers, who had been neglected since 1999,” says Ms. Giannini. “We hired younger, well-trained teachers. We also replaced the old temporary contracts and awarded stable positions to professionals who had been waiting ten or 15 years. We brought the average age of our teachers from 50 -- the highest in the region-- down to 40”

The minister recalls the effort that went into rethinking the educational model from the ground up to take account of the real world technological competencies that students need to develop. A school-to-work scheme was also introduced.

“Now, during the last three years of their education, all Italian students will have 400 hours of school-to-work training for professional schools and 200 for high schools. The idea is to reorient the system towards more practical skills.”


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