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Doing Business in Italy

Doing Business in ItalyIf you want to start a lively conversation with an Italian citizen, ask them about the challenges of doing business in Italy. There are many stereotypes in Italy that need to be dismissed once and for all—but the impenetrable red tape is not one of them. It’s for real, and indeed it might be getting worse according the World Bank Statistics.

When compared to the other 188 countries in the report, Italy ranks 97th in “Getting Credit,” squeaking past countries like Lebanon, Azerbaijan, and Belarus. In the category of “Enforcing Contracts,” they’ve made some negligible improvements, leaping up from #124 in 2015 to #111 for 2016 due to some recent reforms (which obviously didn’t go far enough). But then there are those notorious Italian taxes, which handcuff all would-be startups with a system that lingers at the 137th position globally, slightly more “business friendly” than Haiti, Sudan, and Ecuador.

It’s a wonder that Italians have any enthusiasm at all for starting their own companies. And yet it happens, despite the obstacles. I marvel at the will power required to climb such bureaucratic mountains. It makes my conquest of the Permesso di Soggiorno pale by comparison.

I can only speak from the American perspective, but expats arriving in Italy in the hopes of starting a business are not prepared for this shock, even after they’ve read these types of reports. We grew up with the ideals of meritocracy and entrepreneurship, which were firmly established, at least symbolically, by Emerson’s famous 1841 essay on “Self-Reliance.” We prize individual achievement over social support systems. In my youth, even mentioning the word “communism” was condemned with much more vitriol than any foul-mouthed profanity that teenagers are inclined to invent.americans doing business in italy

It’s not just Italy, but Europe in general leans much farther to the left, preferring to keep the bell-shaped curve as narrow and symmetrical as possible. Although I still shake my head when I recall President George W. Bush infamously ranting, “Those damn French! They don’t even have a word for ‘entrepreneur!’” (Uhh…Mr. President? “Entrepreneur” IS a French word.)

The problem is that the Italian system does not reward hard work and innovation. It rewards staying at the same dull job for 30 years waiting for a nice pension. Although today’s youth aspire to much more, this was the “Italian Dream” in past generations.

The Italian system rewards staying at the same job for 30 years waiting for your pension. Click To Tweet

There are cultural obstacles to overcome in Italy, as well. For example, data from eCommerce sites have shown that Italians are much less likely to purchase products online than folks in the U.S. or U.K. I don’t know if that comes from a distrust of the technology, or the fact that Italians want the “experience” of buying something as much as the object itself.

When purchasing a scarf, for example, an Italian wants to touch it, to examine the stitching, to smell the fabric. Americans, on the contrary, just want more “stuff” to satisfy the pressures of conspicuous consumption. Needless to say, eCommerce and web marketing are extremely effective when targeting the American consumer. Italians aren’t as impressed by slick websites and electronic shopping cart convenience.

Or there could be a third theory.

Italians are reluctant to buy online since the mailman won’t leave a package outside of your door—because you can bet your balls one of your neighbors will “accidentally” pick it up, assuming it was theirs.

http://rickzullo.com/the-italian-post-office/

So if you aren’t home, the postman will leave a card saying that you have to go to hell—I mean, the post office—to retrieve your package. In this case, you might need to ask permission from work to trek across town to the specific branch at the time they’re open.

Of course, if you show up too soon, your package might still be in the postman’s van. If you show up too late, they might have already returned it to the sender. But even if you show up on time, you’ll have to demonstrate the proper documents to prove your identity in order to take possession of your parcel. And to send someone else to pick it up for you, you’ll need to sign a delega (power of attorney) with notarized copies of said documents and a sample of your DNA.

The private couriers aren’t much better. They schedule delivery times that are rarely respected. Then they, too, will simply send your package back, OR you must retrieve it yourself at their office, which it’s normally located just beyond the ass of the moon.

Are you SURE you still want to save 2 Euros to buy those mutande online??

Doing Business in Italy

In the U.S., employees are encouraged to be self-motivators, to “think outside of the box,” or at least try to look busy.

Italians don’t appear to be burdened by such concepts. Don’t get me wrong, some actual work does manage to interrupt the constant string of coffee and cigarette breaks. But the project at hand is regarded a mere annoyance, an afterthought, to the real task of discussing soccer or comparing family recipes for lasagna.

While working for a large American pharmaceutical corporation in Rome, I occasionally observed the unwanted intrusion of an American-style business philosophy. They even tried to inject a fair amount of American vocabulary into the workplace. Terms such “staff meeting,” “manager,” “productivity,” “competiveness,” and “showing up to work on time,” have now found their way into the corporate lexicon in Italy. (Nonetheless, the actual meaning of these terms still tends to get lost in translation.)

Again, I don’t blame the Italians themselves for this. The system is designed to quash any individual ambition. New ideas and creative thinking just aren’t valued, so not many people have the drive to fight against this attitude.

The style of management is also different in Italy than in the United States. The Italian structure is still very much a “Top-Down” model, where all decisions must follow the chain of command. Very little autonomy is granted to the worker, which seems like an antiquated (and frustrating) mentality to most Americans working in Italy.

There are also social rules that permeate the business environment, which I partially discussed in a post on customs and etiquette in Italy. These include the (over)use/abuse of titles, addressing your superiors with the “Lei” form of speech, and so on. Being informal with your boss is considered extremely impolite. Often an employee will address their comments to their equivalent peers while flat-out ignoring people who they regard as being of a lower status within the company.3-The-Godfather-quotes

Even in larger companies, operations are often controlled by the original founding family who makes all the decisions, big and small, with little or no input from their management team. Furthermore, the labor laws in Italy do not make it easy to transfer an employee to an office in another city (in other words, away from their family) against their wishes.

I could go on, but the point I wanted to make here is that it’s not “just” the red tape that impedes both natives and expats doing business in Italy. There are societal and cultural norms that must be surmounted, as well.

Promoting Italian Businesses

As a writer who blogs about Italy’s many enchanting travel destinations and rich cultural heritage, I take pride in doing my small part in promoting Italian businesses. Despite the aforementioned obstacles, I’ve met several individuals that are doing their best to succeed in a difficult business environment.

cardNow I want to take it a step further. I’ve begun to work with small businesses in Italy to help them gain a competitive edge by leveraging the power of the Internet to grow their activities. If the government won’t help, perhaps technology paired with a good marketing plan can.

As you may have guessed, I’m mostly talking about tourist-related businesses targeting an English-speaking audience. Through my own efforts and with the help of my network of contacts, I can provide creative ways of accomplishing specific business objectives through content marketing and social media strategy, among other things.

If you or someone you know might benefit from an improved/enlarged web presence, please visit my new “Work with Me” page to review the ways that I can help promote small businesses in Italy.

Now if you’ll excuse me, I need to get down to the comune to renew my Permesso documents–this shouldn’t take too long, right? UFFA!

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Rick
 

Living in the Caput Mundi and trying to decipher Italian culture for the English speaking world.

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