Italian entrepreneurs were among the first to come to Serbia and believe in this country as a market and manufacturing base, even when conditions in the country weren’t so simple
“Our historic presence in Serbia is strong and very rooted. The bilateral relations are at a very high level, characterized by intensive political and institutional dialogue and strategic partnerships. This shows commitment to the continuous improvement of economic cooperation since Italy is a leading Serbia trading and investment partner”, says the beginning of the conversation for InFocus Italy Giorgio Ambrogio Marchegiani, President of the Italian-Serbian Chamber of Commerce and CEO DDOR insurance part of UNIPOL Group.
How do you asses overall economic cooperation between our two countries?
– I can underline the importance of close co-operation between all factors of the so-called ”Sistema Italia” working for a common goal – improving the economic exchange between Serbia and Italy. Let me also stress once more that the economic activity is supported by a very strong institutional cooperation: in Belgrade Italian institutions are present to support the Republic of Serbia in evolving the legal setting, which is the base for the economic activity. Last year was an important year for Serbia and its economic reFocusITALY 201915lations with Italy: Italy confirmed its position as Serbia’s most important commercial partner with a trade exchange of 4,03 billion euros; we had also some reinvestments: the opening of new plants of Italian companies already present in Serbia. Even better results are expected in this year, which is a significant year of jubilee for bilateral relations: 140 years since the establishment of diplomatic relations between Serbia and Italy and the 10th anniversary of the establishment of a strategic partnership.Italy and Serbia have already demonstrated good cooperation in many areas. Which industry branches would you consider particularly important?As we know, Italian companies from the automotive, textile, footwear industry, mechanical sector, wood and furniture have already been present in Serbia for decades. Italian banks and insurance companies have a leading presence in the Serbian market, too. In recent years, more and more Italian ICT companies in Serbia have grown-up. These companies are not only looking for the skilled labor force, but they are also developing new products and innovative technologies.I think that focus should be also on the sectors that show the most potential in the future as agri-foods- organic production, technological innovation and materials connected with the renewable energy and energy efficiency industry. Thanks to its experience in this field, Italy can transfer its know-how to Serbia, thereby helping support the industrialization and raising Serbia’s market capacity, also in the sectors of biology, green chemistry and environmental protection.
To what extent have Serbian reforms influenced the flow of Italian investors coming to the country?
– Serbia has taken important steps to implement the reforms necessary for attracting foreign and domestic investors. The attractiveness of the location, logistics advantages, availability of skilled workforce, and very good support of the Government of the Republic of Serbia and the local community, including the Chamber of commerce, are the main reasons why Italian investors decided to come and wide their business in Serbia. If we look back, Italian entrepreneurs were among the first to come to Serbia and believe in this country as a market and manufacturing base, even when conditions in the country weren’t so simple. During the last years, the Government dedicates efforts to overcome some weaknesses of the country and now we see results. Increasing business services, improved transparency of relations with the public administration, particularly in taxation, a gradual improvement of the legal system, are evolutions that are welcomed by companies. Furthermore, macroeconomic stabilization and improvements of the business environment contributed to sustained FDI growth, mainly directed to export-oriented sectors. Digitalization is starting to take effect in the country and now most of the transactions and administrative tasks you can easily finish online. For companies this is crucial.
What can Serbia apply from the experiences of Italian industrial companies?
-Italy is a country of excellence not only concerning the artistic and historical heritage but also its industrial sector. The Italian productive system relies on many export-oriented SMEs. Around 50% of Italian exports originate from SMEs (only 16% in Germany). One aspect of the Italian production system that fascinates foreigners is the existence of industrial clusters: small and medium-sized businesses focused on specific manufacturing activities, which interact in a restricted area like an “ecosystem”. This model started in the ‘70s has evolved into a completely different one in which there are hierarchical relationships between leading companies and subcontractors. Industrial districts are a phenomenon of Italy but are interesting also for creating sustainable development in Serbia for two reasons. The first is that around an “anchor” company, often an FDI, can grow a group of smaller companies and create a district specialized in a specific type of product. These smaller companies over time diversify their customers and become a supplier to more companies, even exporting to other countries. This is being the model in the automotive business for example. The second reason has to do with the development of local enterprises and the creation of a – currently missing – local entrepreneurial base, independent from FDIs. In fact, the companies in a “district” can be smaller – are usually a supplier of a certain phase of a process or a certain component of a product. So, they require less investment and can be more easily started by local entrepreneurs. If we look in the past, Italy has found in this organizational model a peculiar trait of its economy and a relevant source of socioeconomic development and growth, and this can happen also in Serbia.
How many Italian companies are satisfied with the business conditions in Serbia?
– Investments of the Italian companies in Serbia give a great impetus to the overall economic development, as well as to the bilateral relations of the two countries. More than 600 Italian companies (over 1800 with the participation of Italian capital) operate in Serbia, employing more than 26,000 workers (without counting the indirect effect), which makes it the first or the second largest foreign employer in our country. This number itself confirms that most investors in Serbia are very satisfied and that they have found their business fruitful in the country. Observing specific cases, we see that at the beginning, they sometimes meet difficulties in understanding the working culture, the general economic environment, some administrative procedures. But the type of difficulties are such that a good Italian entrepreneur immediately understand how to overcome and solve them In this process, of course, the support from peers (other Italian companies) , from the local institutions, like PKS, and from the “Sistema Italia” – our institutions including the Embassy, the Italian Serbian Chamber of Commerce and Italian Trade Agency. We are trying to help them in the successful realization of their businesses. With the companies already present on the market, we seek to consolidate a network comprising public bodies, in support of Italian interest in Serbia.
What could Serbia do as a country to attract as many Italian investors as possible?
– Today, thanks to its proximity to Italy, Serbia, continues to play an important role in relations between Europe, Asia and the Mediterranean. Not only for Italian investors but for the investments overall, strengthening institutions, strengthening investments, the judiciary system and improving the application of the rule of law, investing to create a skilled workforce and good infrastructure are of key importance for attracting FDI. In order to be effective, internationalization efforts must focus on medium to long term period, that is, it must be sustainable. Serbia should focus on investing in education, training and infrastructure. One of the key topics for investors to ensure that the State creates conditions to stop emigration and stimulate the internal market. Investors are part of this policy, but they need a clear framework and commitment by the Government. In my opinion, another important effort that Serbia should do is the improvement of customs procedures in order to speed up the flow of goods.
In the near future, could we expect some new investment, perhaps the arrival of any new Italian company on the Serbian market?
– The answer is “Yes”. In fact in this phase, clearly “the door is open” and there is an ongoing interest for Serbia of many types of Italian companies. As the Italian economy transforms in Italy, its investments abroad follow this trend and now potentially large, medium and even small enterprises are interested. Serbia is an investment destination that provides many opportunities. Apart from promoting the interests of Italian companies in Serbia, in their internationalization, “Sistema Italia” in Serbia, of which the Serbian Italian Chamber is part, is dedicated to bringing high-quality investments, goods and services in Serbia. In that sense, in order to create opportunities for concrete actions in the near future, we are planning activities, starting from fairs, business missions and country presentations and we are very positive that more new Italian companies will come to Serbia as well as probably some re-investments of companies that are already doing business in this beautiful country.