Last week I look a plane to Milan and drove northwest. In the foothills of the Piedmontese Alps I observed Italy’s textile heartland through the small window of my boxy Fiat Panda.
Factories peppered the landscape. The area around Biella is known for its refined cloth industry. This is where the finest wool in the world is still washed, combed and spun – and customers come from China to Japan to purchase it in industrial quantities for suits and frocks.
In fact, the north of Italy is so profitable that the sides of many buildings here are emblazoned with banners flying from apartments demanding independence for the region. Because despite its travails, Italy’s economy is still the third-largest in the eurozone. After Germany, it’s the second-largest manufacturer. This output is largely made up of small to medium-sized businesses. And most of these (70 per cent) are family affairs.
Jobs and skills are inherited and so is leadership. Interviews, recruitment agencies or formal applications with carefully typed CVs are less common. This makes Italy’s economy less malleable and with many of the country’s businesses struggling, economists have observed that when a new government does try and make major labour reforms, it will be hampered by the rigidity of family businesses. The sense of loyalty and obligation between father and sons, mothers and daughters, uncles, aunts and cousins might drive some businesses further into trouble.
That may be true. But family loyalty is also one of Italy’s strengths and instead of dismantling it, whoever steps in to fix Italy should draw on it. This struck me when I arrived at Reda, one of Piedmont’s oldest clothiers. Here the ethos of a family business is what’s driving its owners on to innovate.
Reda’s owner, Francesco Botto Poala, explained to me how he is determined to innovate. He is driven on, despite the economic and political turmoil, by responsibility to his workers and to his family. Reda recently invested €80m in upgrading its looms and bring new technology into the old factory. It has set up a knitwear line – Rewoolution – to diversify its business and help secure its future. Here, it’s clear that family values protect the business and drive it forward, they don’t hold it back.
In the old 19th-century mill Reda bought six years ago there’s a portrait of Francesco’s grandfather hanging in the grand boardroom. The factory’s administrator, Frederici Raffale, wears a three-piece suit to show people around the production lines – he has worked here for 31 years. Reda is an example of Italy’s prowess. The national values and sense of loyalty and lineage can make for healthy businesses.
Italy’s economy is in a dire state. But it is passionate, bold family businesses and their leaders like Francesco Botto Poala who should be the people to lead it out of the abyss.
Sophie Grove is senior editor for Monocle.