12/11/2018 – Country Focus / Italy / Innovation / Technology
Italy: A Taste for Innovation
As one of Europe’s worst hit victims of the late 2000s recession, Italy has suffered a prolonged economic trauma, while the new coalition’s plans to boost public spending have rocked financial markets and riled its eurozone partners. Buried beneath these crises, however, lies significant potential for globally competitive manufacturing, technological development, and sought-after exports – especially in the agri-food sector, as Gemma Kent discovers.
Almost three months after the 2018 general election, in which Matteo Salvini’s League emerged as the predominant political force, the right-wing party formed a coalition with the anti-establishment Five Star Movement (M5S), led by Luigi Di Maio. At the helm of Italy’s new coalition government is Giuseppe Conte, an M5S-linked independent, law professor and political novice who will be responsible for delivering a combination of populist, anti-establishment and eurosceptic policies ranging from radical tax cuts and higher welfare spending to an overhaul of EU rules on budgets and immigration – all while promising to kick-start economic growth.
Considering Italy bears one of the eurozone’s largest government debts – currently standing at around e2.4 trillion (more than 130 per cent of GDP) – the new government certainly has its work cut out. Besides its sky-high public debt, the so-called Bel Paese is also grappling with deep-rooted economic issues such as low productivity, limited competition, too few large corporations and high unemployment, on top of a persistent north-south divide.
On the other hand, Italy’s manufacturing prowess – and particularly its deep-rooted culinary culture, endowed with historical emphasis on regional specialities, authenticity and premium quality – presents a unique opportunity for the country to improve its position in an increasingly competitive global economy. Indeed, from meat, pasta and cheese to food processing, packaging and refrigeration technology, innovation among the often family-owned SMEs that have spent decades as the cornerstone of the Italian economy could hold the key to the nation’s future success.
Made in Italy
In a 2017 article published by MIT Technology Review, the Italian Trade Agency (ITA) lauds Italy’s world leadership in manufacturing, machinery and related fields, describing the country as a hotbed for high technology. Although the ITA’s enthusiasm is to be expected given its role in promoting ‘Made in Italy’ as it strives to attract FDI, one cannot argue with the statistics. Italy is the second-largest manufacturing economy in Europe, home to some of the region’s most environmentally efficient manufacturing systems, and one of only five countries in the world with a manufacturing trade surplus exceeding US$100 billion.
Italy also ranks second worldwide in global competitiveness in the industrial machinery sector and is one of the top three producers of machined parts. In addition, the country is Europe’s third-largest exporter of flexible manufacturing technologies, including robotics, with US$9.6bn in exports solely to the US, and is among the top five non-US hosts for additive manufacturing technologies. Over 70 per cent of Italian-made machinery is exported to various nations across the globe, according to the ITA, but the proportion is even higher for food technology-oriented machinery, with more than 90 per cent of production exported each year.
While the country’s technological expertise is certainly nothing new – consider the achievements of the Roman Empire, Leonardo da Vinci or Guglielmo Marconi – a transition is underway towards the “technologies of tomorrow”, according to ITA President, Michele Scannavini, who adds that “Italy is going through a very important and radical transformation from traditional manufacturing to advanced, flexible manufacturing.” Moreover, unlike some large multinational corporations, Italy’s prolific SMEs are flexible and very fast to adopt the latest technologies. “Today 40 per cent of Italian manufacturing companies use 3D printers for fast prototyping, and 25 per cent use robotics in the manufacturing process,” Mr Scannavini affirms.
An appetite for automation
Robotics and automation is certainly a particularly promising field of Italian manufacturing, with more than 400 companies employing 32,000 people and generating over e6bn, two-thirds of which is exported overseas – much of it to the US. According to the International Federation of Robotics’ (IFR) World Robotics Report 2017, Italy is the eighth most automated country in the world, with 185 industrial robots installed per 10,000 employees – well above the global average of 74.
The proliferation of such high-tech manufacturing in Italy has been facilitated, since its launch in September 2016, by the Ministry of Economic Development’s Industrial National Plan 4.0 – described by Michele Scannavini as supporting “the digitisation of the Italian economy”. Meanwhile, the ‘Industry 4.0’ revolution is well underway in the country’s agri-food industry, where robots are no longer confined only to packaging but are increasingly utilised in product handling and manipulation owing to their flexibility and small footprint. Indeed, in many applications they can effectively replace conveyor belts, elevators and other traditional mechanical feeding systems, as well as eliminating the need for operators to perform cumbersome and repetitive tasks.
Alba-based Abrigo SpA is one of several Italian firms promoting robotic applications for widely used processes in the agri-food industry, and specialises in automated packaging lines and ultrasonic cutting systems for the bakery, confectionery, frozen food, beverage, dairy and meat sectors. In one of its latest innovations, Abrigo developed a fully automated ultrasonic cutting line for pre-cooked meat, incorporating an anthropomorphic six-axis robot that picks the slices from the cutting section and places them into the plastic vats of a downstream thermo-forming machine.
“[Sectors] such as food and beverage…are increasingly focused on how automation can improve quality, reduce costs, increase productivity and, in short, help them improve their competitive positions,” says Mauro Fenzi, CEO of Comau SpA, which is among the world’s largest producers of robots. Keen to emphasise how robotic automation represents a real advantage for companies operating in the food and beverage industry, the Turin-based company exhibited at the previous Cibus Tec event in Parma under the motto “There’s more taste with automation”, where it showcased two demo cells employed in pasta packaging and handling of bakery products. Elsewhere in the company’s range, its Aura model has a higher payload (170kg) than any other collaborative robot on the market (picture right).
While operating at the cutting edge of food technology on the one hand, on the other hand the historical prestige of Italian-made food means that many companies are already several steps ahead of another multifaceted trend currently dominating the sector – namely, supply chain traceability and transparency. Indeed, in the wake of a number of high-profile food scandals in recent years, global consumers are becoming increasingly conscious of the provenance of their food, with producers in some countries struggling to keep pace with growing demands for certification and other evidence of their products’ origins.
Consumers worldwide nevertheless remain drawn to high-quality Italian food products: the country earned more than e40bn from agri-food exports in 2017, and the government is targeting sales of e50bn by 2020. Unlike pasta and olive oil, for which exports declined last year – mainly due to larger pasta producers opening factories overseas and olive crops being plagued by a virus – the burgeoning Italian cheese and dairy product segment experienced impressive growth. According to farming organisation Coldiretti, Italy’s cheese producers exported a record-breaking 400 million kilos in 2017, representing an increase of seven per cent from 2016 and a staggering 84 per cent over the last decade. As if these figures were not astounding enough, the greatest demand for Italian cheese came from France – a country with its own proud cheese-making heritage.
Other major export destinations included Germany, the UK and US, while rising sales have also been observed in countries where cheese is not traditionally consumed, including China and Japan. “In the future I think there will be huge demand in India and the multifaceted Chinese market,” Francesco Berneri, CEO of long-established cheese-maker Berneri SpA, told us earlier this year. “I also think that in a few decades’ time we will have expanded our business into Africa,” he added.
Aiding the recovery
While speciality cheese producers such as Berneri are commanding a sizeable chunk of the flourishing export market, on account of their ability to supply certified products that are widely perceived to be of superior quality, proof of origin is also a priority for Italian consumers. According to a March report from the USDA Foreign Agricultural Service on the Italian food processing ingredients sector, more manufacturers are introducing products with a focus on provenance and naturalness, while Italian consumers increasingly look for products sourced locally because it makes them feel “as though they are supporting their communities and their economic recovery”. Indeed, considering the pivotal role that the agri-food industry plays in the Italian economy, they are probably right.