Several years ago, Ecuador introduced legislation to encourage the use of cookers with induction hobs. The embassy promptly reported the news to the industry associations, which enabled several companies to clinch supply contracts in the Central American country. Clearly, this example is relevant to small orders from a small country, but if we move from induction hobs to large-scale tenders and contracts we will see how the soft power of economic diplomacy can support our exports of products and services.
The Foreign Ministry commissioned Prometeia to conduct a survey aimed at estimating how the worldwide network of Italian embassies and consulates can support trade and businesses. The survey has returned the following results: in 2019, the Ministry of Foreign Affairs was involved in procuring 543 international tenders. In 2017, the peak year, the figure was 785. Last year, however, the average value of the contracts was significantly higher (279 million compared to 89 million in 2017). The result is a record value of tenders, 152 billion euros compared to 51 in 2017, involving a total of 305 Italian companies, generating an added value in Italy of 31.2 billion euros. All this translates into business for Italian (and foreign) companies and wages for Italian workers, for 426 thousand more jobs in the country and 11.8 billion additional tax revenues.
“Companies that operate abroad often have an all-Italian supply chain behind them. This is why a successful tender abroad has an important impact on the wealth produced in Italy and on the number of jobs created in this country. Moreover, 45% of the companies we supported were small or medium-sized businesses. Overall, the activities of the Ministry of Foreign Affairs, and of the diplomatic-consular network as a whole, in support of companies operating abroad have direct and indirect effects that contribute 31 billion euros of added value to the country’s economy, amounting to 1.9% of the GDP in 2019”, the Deputy Minister of Foreign Affairs, Manlio Di Stefano, a member of the Five Star M5S movement, explained.
In 2019, 122 tenders supported by our diplomatic network were related to China, accounting for almost a quarter of the total. In 2018, only 16 projects concerned China, out of a total of 680, amounting to a mere 2.4%. What sparked this almost tenfold growth? To what extent is it related to the Belt and Road Initiative (BRI), the Silk Road project?” Operations in China are undoubtedly related to the BRI, but also to the fact that the Asian countries in general, where the economy is growing at a faster pace, provide the best opportunities,” Deputy Minister Di Stefano replied. They need infrastructure and machinery. Politically, we expect that the number of projects supported in Asia will continue to grow in the future”.
Businesses turn to consulates and embassies to tackle various problems. From the simplest, such as visas or the search for the right parties to contact in relation to a tender, to the more complex ones linked to “non-tariff” barriers. In which areas can the Ministry and its diplomatic-consular network strengthen this activity? And how will the transfer of all internationalisation competences from the Ministry for Economic Development to the Ministry of Foreign Affairs this year affect this? “Well, to begin with, the impact of our work is already growing, it is no coincidence that the total value of the projects for which there has been support from our diplomatic network has risen from 83 billion in 2018 to 152 billion last year, a figure that has almost doubled”. “The fact that today Italian companies have a “one stop shop” for all internationalisation-related matters in the Foreign Ministry seems to me a very positive step forward – the Deputy Minister continued – The foreign trade agency ICE is also under our supervision, just like Simest is coordinated by the Foreign Ministry. The picture is now complete and we want to get to work so that small and medium-sized enterprises as well can become aware that there is a one stop shop in place for all their needs. The point of access for all services is the portal for internationalisation at export.gov.it”.
The latest export figures, recorded in September, feature a double plus sign, which is all the more positive considering the pandemic: +2.1% year-over-year and +2.7% month-over-month. How can the Foreign Ministry help businesses that want to continue (or even start) exporting at such a difficult time? “We are facing the emergency thanks to the “Pact for Export” signed last June, which we developed through 12 sectoral consultations with 147 associations. The latest figures show that the Pact is working. One of the qualifying features of the agreement concerns facilitated financing and soft loans to support various actions, ranging from participation in trade fairs to the development of e-commerce. The available resources of the Fund 394 managed by Simest amount to 1.2 billion euros. But requests have exceeded 3.9 billion. We are counting on satisfying them with extra funds from the Budget”, Deputy Minister Di Stefano concluded.
Finally, the Ministry of Foreign Affairs consistently supports its “economic diplomacy” with a “scientific diplomacy”. On 26 November next, a conference on this topic will be streamed on the Ministry’s YouTube channel. The event will be attended by Ministers Luigi Di Maio (Foreign Affairs), Gaetano Manfredi (Universities and Research) and Paola Pisano (Innovation), and by the astronaut Luca Parmitano and the virologist llaria Capua.
