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FY 1999: Italy |
V. LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
A. BEST PROSPECTS FOR NON-AGRICULTURAL GOODS AND SERVICES
Following is a listing of non-agricultural products and services
which are considered to offer particularly good opportunities for
U.S. exporters. Sectors are listed in rank order based on
estimated 1998 import market size. Statistics are estimates
based on best available data and industry sources. The
Commercial Service in Italy organizes special trade promotion
events in many of these and other sectors. For more information
please contact the Commercial Service at the American Embassy in
Rome or the American Consulate General in Milan, Italy (see
Appendix E for contact information.)
1.Insurance Services
2.Telecommunications Equipment and Services
3.Automotive Parts and Service Equipment
4.Franchising
5.Electric Power Systems
6.Computer Services
7.Computers and Peripherals
8.Sporting Goods and Recreational Equipment
9.Pollution Control Equipment and Services
10.Process Controls: Industrial
11.Computer Software
12.Electronic Components
13.Medical Equipment
14.Airport and Ground Support Equipment
15.Education and Training Services
Sector Rank: 1
Sector Name: INSURANCE SERVICES
ITA Industry Code: INS
Total direct insurance premiums (exclusive of re-insurance)
collected in Italy in 1997 increased 20.1 percent in nominal
terms, with an extraordinary 41.5 percent increase in the sale of
life insurance, which currently represents almost half of the
entire Italian insurance turnover.
This remarkable increase is a direct consequence of the growing
uncertainties with regard to the guarantees offered by the
Italian state pension and health systems. Among the factors
which contributed to such a trend are the perceived need now for
Italian households to increase the amount of savings set aside
for retirement needs, as well as their lessened reliance on cash
assets (as a result of reduced interest rates and booming equity
markets). In addition, the remarkable growth in life insurance
is also due to its reductions in operating costs, the greater
variety of distribution channels, and the introduction of
innovative products such as index-linked and unit-linked
policies.
Among the top ten companies operating in the sector are eight
large Italian insurance companies, including "Assicurazioni
Generali", "Sai", "Alleanza Assicurazioni", "Istituto Nazionale
Assicurazioni", "Compagnia di Assicurazioni di Milano",
"Assitalia", "Fondiaria Assicurazioni", "Compagnia Assicurazioni
Unipol". Foreign-owned insurance companies, which have been
quite aggressive in the market in recent years, account for an
estimated 30 percent market share. Countries whose firms have
the strongest market presence are Germany, Switzerland and France
(e.g. "Ras", "Lloyd Adriatico", "Winterthur", "Zurigo", "UAP").
The handful of U.S. companies presently doing business in Italy
(namely "AIG", "Cigna Insurance", "Chubb Insurance", and "Pricoa
Vita" ) have managed to increase their sales and market share,
but still only have an estimated 0.32 percent of the market.
U.S. firms, which have operated in highly competitive
environments and have considerable experience and expertise,
especially in life insurance, pension funds, individual
retirement accounts, and health insurance, should be in a
position to take advantage of the liberalization of the EU
insurance services market, as well as the increased Italian need
for insurance products.
DATA TABLE:
1997 1998 1999
A. Total Sales 47,730 49,470 52,740
B. Sales by Local Firms 46,770 48,550 51,830
C. Export Sales by Local Firms 13,360 13,850 14,760
D. Sales by Foreign-owned Firms 14,320 14,770 15,670
E. Sales by U.S.-owned Firms 155 160 170
I. Exchange rate:
1 U.S. DLR = Lire 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 2
Sector Name: TELECOMMUNICATIONS EQUIPMENT AND SERVICES
ITA Industry Code: TEL
The total telecommunications market in Italy is estimated at $28
billion, with the highest growth in cellular and data
communications. Another area of growth is telecommunications
infrastructure, primarily satellite broadcasting, VSAT
communications network and mobile communications. The market for
terrestrial microwave equipment is also likely to expand rapidly
- especially for new digital equipment - due to the demand from
new service providers.
New opportunities for U.S. firms were opened with the
liberalization of the telecommunications market on January 1,
1998. Five new fixed-line carriers, including WorldCom of the
U.S., were authorized in the first quarter of 1998, and a third
mobile telecommunications licence was awarded in June.
The best prospects for U.S. suppliers of equipment and services
are: mobile communications, switching/transmission equipment for
wire-line networks (including terrestrial microwave and
coaxial/fiber optics), telecom services (especially for the
diverse needs of the Italian business community), data
communications (i.e. value-added telecom services,
LANs/WANS/Internet/WWW), satellite communications (especially
VSATs and DBS), cable TV and interactive, multimedia
communications
DATA TABLE:
1997 1998 1999
A. Total Market Size* 28,197 29,741 32,032
B. Sales by Local Firms* 27,084 29,084 31,362
C. Exports by Local Firms** 1,826 1,844 1,881
D. Sales by Foreign-owned Firms** 2,476 2,501 2,551
E. Sales by U.S.-owned Firms** 871 880 897
I. Exchange Rate
1 U.S. DLR = Lira 1,703 1,750 1,740
The above statistics are unofficial estimates.
*denotes equipment and services
**denotes equipment only
Sector Rank: 3
Sector Name: AUTOMOTIVE PARTS AND SERVICE EQUIPMENT
ITA Industry Code: APS
The January 7, 1997 Italian Government decision to provide
incentives for the purchase of a new automobile (in exchange for
scrapping a car over ten years old), along with the discounts
offered by car manufacturers, sent automobile sales soaring by
39.24% in 1997 compared to the previous year (with 2,411,900
automobiles sold). The first five months of 1998 have seen a
further increase of 8% in auto sales. This public incentive
program, however, is due to terminate on July 31, 1998. Although
this tremendous increase in demand following what had been a
four-year slump is seen as temporary and, at best, will remain
stable (at approximately 2 million vehicles sold annually), some
observers believe that more lasting effects could be achieved by
some restructuring and reduction of taxes that make car ownership
more onerous than it should be.
In the wake of this recent upswing, the market for automotive
parts, components, accessories and service equipment experienced
an estimated 10% increase during 1997, with imports covering 27%
of the market (an increase of 6% compared to previous year).
Sales of original equipment (OE) accounted for 74.1% of total
component demand (16% of which were covered by imports), while
aftermarket (AM) sales represented 25.9% of overall component
demand (almost half of which were covered by imports). The main
foreign suppliers are Germany (35%), France (24%) and U.K. (9%).
The spare parts market is estimated to have risen by 3% in 1997
as a result of both increased consumer demand and increased
vehicle ownership. Italy currently has the highest auto density
in the world and still has one of the oldest auto fleets in
Europe with 36.2 million vehicles currently on the road. The
higher frequency of periodic compulsory motor vehicle inspections
is expected to spur sales in Italy of spare parts, components,
and service equipment, and to contribute to the phase-out of cars
no longer deemed safe.
While growth in U.S. auto parts shipments to Italy is not
expected to exceed a 3% average annual increase for the next
couple of years, U.S. industry is nevertheless supplying the
Italian market primarily from its European subsidiaries. It is
also pursuing several joint ventures and even "green field"
investments (a total of eight during the past two years, and with
another two under development). Best prospects within the sector
include the wide range of passive and active security
components/accessories, environmentally-friendly features, and
lightweight acoustic insulation materials.
DATA TABLE:
1997 1998 1999
A. Total Market Size 18,224 18,575 17,350
B. Total Local Production 25,517 26,075 25,700
C. Total Exports 12,140 12,405 13,100
D. Total Imports 4,847 4,905 4,750
E. Total Imports from U.S. 176 180 175
I. Exchange Rate
1 U.S. DLR = Lira 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 4
Sector Name: FRANCHISING
ITA Industry Code: FRA
Franchising continues to gain acceptance in Italy and is starting
to play a significant role in the development of the local
economy. The highly fragmented Italian retail distribution
system is gradually being replaced with more modern distribution
arrangements. The growth of successful new franchises has
reinforced awareness within the Italian business community of
franchising as one of the most innovative ways to develop a new
business in Italy.
In 1997, Italy had 486 franchisors (an increase of 5 percent over
the previous year) and approximately 22,000 franchisees. In 1997
also, the total volume of franchise business was estimated at
nearly $10 billion. In addition, the share of retail sales made
through franchising outlets has grown to 2.1 percent. The most
dynamic sectors are services, with 150 franchisors; personal
items, with over 120 franchisors; and food outlets, with 20
franchisors. Adaptability to the Italian business and cultural
environments is definitely a key factor for a successful
introduction of a foreign franchise.
U.S. franchises rank second in the marketplace (after French
franchises), with approximately 20 companies operating and
generating a sales volume of $325 million. U.S. companies
operate 600 retail stores and employ approximately 3,200 people.
The success that McDonalds, MailBoxes, Etc., and Blockbuster, for
example, have achieved demonstrates the great potential for
American companies in this market.
3. DATA TABLE:
1997 1998 1999
A. Total Market Size 9,980 10,300 10,950
B. Total Local Production 9,165 9,450 10,050
C. Total Exports 1,380 1,425 1,500
D. Total Imports 2,195 2,275 2,400
E. Total Imports from U.S. 325 335 350
I. Exchange Rate
1 U.S. DLR = Lira 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 5
Sector Name: ELECTRIC POWER SYSTEMS
ITA Code: ELP
Italy is heavily dependent (nearly 80% of its needs) on foreign
sources of energy; therefore, its policy is strongly influenced
by this factor. The economic strain experienced in the past few
years, slowed down the implementation of the National Energy
Plan, including investments in energy equipment and systems.
Demand for electric power however has continued to grow,
resulting in substantial imports coming from neighboring
countries (Switzerland, France and Austria). For this reason,
both the government and the industry (i.e. ENEL, the National
Electricity Company, which produces and distributes over 80% of
the electricity), are seeking alternatives to traditional energy
production systems. Investment in energy production (including
incentives to self producers), diversification of energy sources,
promotion of energy conservation technologies and utilization of
alternative renewable sources of energy, will all play an
important role in Italy's power generation policy in the coming
years. As a result of the EU Directive on Electricity, the
Italian electricity market will be open to competition as of
January 1, 1999. While market liberalization should stimulate
increased demand for electric power systems, independent power
producers are holding off major investments pending
clarifications of the regulations governing the Italian energy
market.
Although still comparatively small, there is a growing potential
market for alternative energy systems, especially for high-tech
and sophisticated design in sectors like wind energy generation
equipment, solar energy generation equipment (both PV and
thermal) and biomass. Also a good market potential is available
for advanced fuels exploitation systems and peak-load gas
turbines.
European competition is strong and growing through a number of
mergers and acquisition, aimed at acquiring increasingly larger
market shares. In addition, ENEL (which is in the process of
privatization, has been aggressively positioning itself for the
competitive market by pursuing partnerships with both
international and Italian firms. U.S. companies should
concentrate their efforts on innovative products/systems, while
strengthening their leadership in licensing and technical
cooperation, since the majority of Italian manufactured heavy
electrical machinery is made under U.S. licenses.
DATA TABLE:
1997 1998 1999
A.Total market size 5,590 5,675 5,930
B.Total local production 5,800 5,890 6,160
C.Total exports 1,850 1,880 1,970
D.Total imports 1,640 1,665 1,740
E.Total imports from US 310 315 330
I.Exchange rate:
1 U.S. DLR = Lire 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 6
Sector Name: COMPUTER SERVICES
ITA Industry Code: CSV
The computer services sector continues to represent one of the
driving forces in the Italian information technology market. The
growth of this sector in the next three years will be greatly
influenced by Italian industry's efforts to reorganize by
achieving more rational and flexible internal structures and
increasing efficiency and productivity. Global outsourcing and
"selective" outsourcing services (data processing,
hardware/software maintenance, applications management, network
management, desktop management and disaster recovery services)
will be increasingly utilized as tools to operate efficiently and
cost-effectively.
In addition, the growing complexity of technologies, resulting
from the convergence of information technology and
telecommunications and from the widespread utilization of the
Internet and intranet, will also lead Italian companies to resort
increasingly to external service providers to supplement in-house
capabilities.
Excellent opportunities exist in the area of services for the
implementation of Internet/intranet company strategies and for
the development of Internet-related customized applications such
as home banking and online financial services. The U.S. dominates
the market and its superiority in this sector is widely
recognized. Good opportunities exist for new-to-market U.S.
companies offering highly specialized services and willing to
team up with well-established Italian firms.
DATA TABLE:
1997 1998 1999
A. Total Market Size 5,050 5,300 5,700
B. Sales by Local Firms 3,640 3,800 4,100
C. Exports by Local Firms 155 160 170
D. Sales by Foreign-owned Firms 1,565 1,660 1,770
E. Sales by U.S.-owned Firms 1,160 1,220 1,300
I. Exchange Rate
1 U.S. DLR = Lira 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 7
Sector Name: COMPUTERS AND PERIPHERALS
ITA Industry Code: CPT
The computer and peripherals sector is forecast to maintain its
position as one of the promising sectors for U.S. imports in the
next three years. The current reorganization process within
Italian business is impacting the development of the market.
Demand for information technology (IT) products and systems is
growing, as complex information systems in large and medium-sized
companies are updated to adopt client/server architectures and
groupware platforms.
The need for IT/telecommunications integration also represents a
major driving force. Good prospects continue to exist for open
systems and UNIX- based systems. Demand for workstations is also
increasing, due to renewed investments in the
technical-scientific market. Personal computers are registering
high growth rates, both in unit and value terms, and they are
increasingly used in networking applications. Demand for CD-ROM
and multimedia products is expected to become one of the most
dynamic components of the Italian computer hardware/multimedia
market, with the consumer/home PC market as the major driving
force. Demand for mobile computing systems is also growing
rapidly.
U.S. technology and standards are highly regarded in the computer
and peripherals sector. The best opportunities for success lie
with American companies offering innovative and sophisticated
products that are willing to team up with well-established local
firms in distribution agreements.
DATA TABLE:
1997 1998 1999
A. Total Market Size 4,810 5,000 5,350
B. Total Local Production 5,065 5,250 5,600
C. Total Exports 3,280 3,400 3,650
D. Total Imports 3,025 3,150 3,400
E. Total Imports from U.S. 1,040 1,080 1,160
I. Exchange Rate
1 U.S. DLR = Lira 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 8
Name of Sector: SPORTING GOODS AND RECREATIONAL EQUIPMENT
ITA Industry Code: SPT
Italy is the world's fourth largest market for sporting goods,
second only to Germany in Europe. The Italian sporting goods
market has been registering steady growth since the 1980s,
reaching sales of nearly USD 5 billion in 1997. In the next few
years, the Italian sporting goods market is expected to continue
to grow at a rate of approximately 5 percent.
Demand for sports apparel and accessories is likely to register
above average increases, due to heightened interest in staying
fit and healthy and to the fact that sportswear is increasingly
worn as casual apparel in daily life by all age groups.
Good export opportunities exist in Italy for American
manufacturers of sporting goods, as the Italian market is
extremely receptive to innovative U.S. products.
3. DATA TABLE:
1997 1998 1999
A. Total Market Size 4,905 5,000 5,250
B. Total Local Production 5,985 6,090 6,400
C. Total Exports 2,155 2,190 2,300
D. Total Imports 1,075 1,100 1,150
E. Total Imports from U.S. 175 180 190
I. Exchange Rate
1 U.S. DLR = Lira 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 9
Sector Name: POLLUTION CONTROL EQUIPMENT AND SERVICES
ITA Industry Code: POL
The Italian pollution control equipment and services market
continues to be one of the best prospects for U.S. products,
technologies and services. The Italian government has
implemented EU directives on waste, hazardous waste, and waste
packaging and is moving forward in its application. The market
potential is expected to be promising for waste recycling and
hazardous waste management equipment technologies and services.
Long-awaited public/private cooperation in waste-management has
started to take place. Italian industrial companies are placing
increasing emphasis on waste minimization and pollution
prevention in production processes, as well as on recycling
projects. New local government programs and growing awareness of
environmental problems will also stimulate recycling and
treatment of non-hazardous and hazardous materials, such as
plastic, glass, paper, spent household batteries, pesticides,
containers of toxic and flammable materials, and oils and
emulsions. In addition, more stringent water legislation and
higher water and wastewater charges are likely to stimulate the
modernization of industrial water and waste water treatment
systems. The Italian industry is largely dependent on foreign
expertise for know-how. In particular, U.S. products and
technologies are highly regarded. Competition in the marketplace
is fierce, but demand is strong for truly innovative products and
services. Moreover, Italy's strategic position in the
Mediterranean Basin makes it an ideal gateway to the emerging
markets of Eastern Europe, North Africa, and the Middle East.
Italian companies specialized in turn-key operations have
strengthened their position in foreign markets and developed
excellent contacts there. As a result, the right Italian partner
could assist U.S. firms in not only cracking the Italian market,
but also in effectively entering other foreign markets.
DATA TABLE:
1997 1998 1999
A. Total Market Size 3,980 3,990 4,110
B. Total Local Production 3,610 3,610 3,720
C. Total Exports 440 440 450
D. Total Imports 810 820 840
E. Total Imports from U.S. 360 360 370
I. Exchange Rate
1 U.S. DLR = Lira 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 10
Sector Name: PROCESS CONTROLS: INDUSTRIAL
ITA Industry Code: PCI
Limited investment in new machinery in 1996 and 1997 severely
affected prospects for growth in the process controls market in
Italy. Growth was a modest 2.5 percent increase in 1997.
However, improvement in the national economy, starting with the
last quarter of 1997 and continuing into 1998, should stimulate
capital investment and therefore provide new momentum to the
process controls market in Italy.
The application markets for process controls with above average
prospects for growth are: environmental products and services;
utilities; food processing; and production of chemicals. Italian
manufacturers in these sectors require great flexibility in
production processes, which will lead to strong demand for
"intelligent" instrumentation and simpler supervision systems.
U.S. companies should be able to at least maintain, if not
increase, their share of the Italian market due to the superior
quality and innovation of their products.
DATA TABLE:
1997 1998 1999
A. Total Market Size 3,450 3,550 3,750
B. Total Local Production 2,350 2,400 2,525
C. Total Exports 625 640 675
D. Total Imports 1,725 1,790 1,900
E. Total Imports from U.S. 540 560 590
I. Exchange rate:
1 U.S. DLR = Lire 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 11
Sector Name: COMPUTER SOFTWARE
ITA Industry Code: CSW
The Italian market for software products recorded another
positive year in 1997. Prospects for growth over the next few
years are bright. The process of privatization of large publicly
owned companies in the telecommunications, utilities and
financial sectors has created a favorable environment. The
multimedia revolution is driving the information technology and
telecommunications worlds into ever-closer contact, and Italy is
slated for major investments in infrastructure and terminal
equipment. The convergence of data processing and networking
equipment, operating systems and software will translate into
continuing growth for data transmission software and system
integration products. In application software, the adjustments
needed for the conversion to the Euro and for the Year 2000 will
ensure further expansion of this segment in the short term.
Finally, the success of electronic commerce in markets similar to
Italy's augurs well for producers of related software, with
financial and banking institutions as the prime customers.
Advances in technology that improve productivity, accelerate
product cycles and enable firms to compete more effectively will
be in demand by export-oriented manufacturers and will spur
investments in new software. Particular fields targeted for
growth are: enterprise resource planning software; groupware;
data transmission software; and document image processing
products.
As technological changes accelerate and users are presented with
a multitude of new opportunities, U.S. software is well placed to
benefit in a market which recognizes the supremacy and innovative
quality of American products.
DATA TABLE:
1997 1998 1999
A. Total Market Size 3,139 3,314 3,516
B. Sales by Local Firms 2,116 2,229 2,345
C. Exports by Local Firms 312 330 350
D. Sales by Foreign-owned Firms 1,335 1,415 1,521
E. Sales by U.S.-owned Firms 992 1,042 1,327
I. Exchange rate:
1 U.S. DLR = Lire 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 12
Name of Sector: ELECTRONIC COMPONENTS
ITA Industry Code: ELC
Following a strong reduction in inventory levels and prices in
1996 and the first half of 1997, demand for electronic components
from both distributors and OEMs recovered in the latter half of
1997. This positive trend is likely to persist in 1998.
Telecommunications and computers are the sectors in which
electronic components-- active, passive and electromechanical--
are in the greatest demand. At the same time, the television
producers have drastically reduced purchases.
Local producers of electronic components have increased their
sales in both Italy and other markets, gaining market share at
the expense of foreign producers, as a result of both the higher
manufacturing capacity of the Italian firms and very competitive
prices. The U.S. remains one of Italy's major suppliers of
electronic components, accounting for nearly 15 percent of the
import market. Competition from European and Far Eastern
manufacturers, however, is strong. At the same time, antidumping
actions recently taken by the EU against Far Eastern
manufacturers may benefit U.S. producers of electronic
components.
DATA TABLE:
1997 1998 1999
A. Total Market Size 3,120 3,200 3,350
B. Total Local Production 2,445 2,500 2,650
C. Total Exports 1,135 1,160 1,250
D. Total Imports 1,810 1,860 1,950
E. Total Imports from U.S. 260 275 290
I. Exchange Rate
1 U.S. DLR = Lira 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 13
Sector Name: MEDICAL EQUIPMENT
ITA Industry Code: MED
The National Health System (SSN) guarantees free medical care to
the entire population of Italy. The SSN operates through local
health units, which have jurisdiction over 1,030 public hospitals
with a total of 300,000 beds. The average stay in public
hospitals is estimated at approximately 9 days, at a cost of $350
per day. Eighty percent of total expenditures on medical
equipment and products is accounted for by public hospitals. In
addition, Italy has 670 private clinics, with a total of 72,000
beds.
The Italian market for medical equipment heavily relies on
imports. Major suppliers to Italy are Germany, the U.S. and
Japan. Only a small number of Italian companies can compete
effectively in this sector. In recent years, the local health
care market has suffered from drastic cuts in public expenditures
due to the need to reduce national budget deficits. Price is now
considered to be the number one factor in making purchasing
decisions. Forecasts for future growth in this sector are
moderately optimistic.
DATA TABLE:
1997 1998 1999
A. Total Market Size 2,555 2,600 2,700
B. Total Local Production 835 840 880
C. Total Exports 235 240 250
D. Total Imports 1,955 2,000 2,070
E. Total Imports from U.S. 900 920 950
I. Exchange Rate
1 U.S. DLR = Lira 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 14
Sector Name: AIRPORT AND GROUND SUPPORT EQUIPMENT
ITA Code: APG
Following a period of slowdown which lasted from 1994 to 1996,
the Italian market for airport and ground support equipment is
now showing signs of recovery. This is due to the fact that both
government and regional authorities are resuming expenditures for
capital equipment.
The market is therefore expected to expand with increased near
term investments and expenditures for airport expansion (i.e.
Milan International Airport "Malpensa 2000"), upgrading of
existing infrastructures (i.e. Naples Capodichino airport, Rome
Leonardo da Vinci airport), and purchase of ground support
equipment and systems, in order to meet world standards of
safety, performance and system maintenance. 14 Italian airports
have been designated for updating air transportation management
and passenger/cargo terminal facilities. Besides government and
regional financing, nearly USD 500 million will be spent in this
sector by private enterprises by 1999.
U.S. technology and design is highly regarded by the Italian
airport and ground support equipment operators. This will enable
U.S. manufacturers to successfully compete against the
increasingly strong competition from European countries such as
Germany, France and U.K. The U.S. industry is expected to
maintain or even slightly improve its market share through 1999.
DATA TABLE:
1997 1998 1999
A.Total market size 2,470 2,510 2,630
B.Total local production 1,840 1,870 1,960
C.Total exports 770 780 820
D.Total imports 1,400 1,420 1,490
E.Total imports from U.S. 650 660 690
I.Exchange rate:
1 U.S. DLR = Lire 1,703 1,750 1,740
The above statistics are unofficial estimates.
Sector Rank: 15
Sector Name: EDUCATION AND TRAINING SERVICES
ITA Industry Code: EDS
The Education and training services sector comprises: language
training, which includes language courses in both Italy and
abroad; post-university programs (master's programs and
doctorates); and training programs for managers. Language
training, with an estimated value of $550 million in 1996, and
postgraduate programs, with an estimated value of $390 million,
are by far the largest segments.
It has been estimated that only about 10% of Italians have a
sufficient command of the English language to be able to use it
in business transactions. On the other hand, the importance of
possessing adequate language skills is becoming increasingly
recognized in an era of globalization, and more and more
individual Italians, as well as companies, are ready to invest
time and money in order to learn foreign languages, particularly
English.
A market with great potential is that of language courses abroad,
as many Italian families are increasingly sending their children
overseas for studying and practicing a foreign language. In this
market, the United Kingdom maintains the lion's share. However,
there is an increasing trend towards going to the U.S.,
especially after a one or two stays in the UK or Ireland.
Universities and schools based in California are especially
popular because of their extensive marketing efforts and the
appeal of the state itself.
Another market, in which the U.S. has a large and growing share,
is that of postgraduate education. In 1997, approximately 3,200
Italians obtained a J1 visa, which is granted to such students.
Although this figure is still low compared to other European
countries, the number of Italian students and young researchers
going to the U.S. is increasing. Two American universities
offering part-time MBA courses in Italy are experiencing success
both in terms of number of students and recognition from the
local business community.
Finally, there is increasing interest by Italian firms and public
sector entities in management training services aimed at
increasing efficiency of operations and competitiveness as well
as specific managerial and/or technical skills.
DATA TABLE:
1997 1998 1999
A. Total Market Size 1,080 1,150 1,270
B. Sales by Local Firms 540 570 620
C. Exports by Local Firms 30 40 50
D. Sales by Foreign-owned Firms 570 620 700
E. Sales by U.S.-owned Firms 125 135 150
I. Exchange Rate
1 U.S. DLR = Lira 1,703 1,750 1,740
The above statistics are unofficial estimates.
B. BEST PROSPECTS FOR AGRICULTURAL PRODUCTS
The Italian diet has become an international reference point as
it combines both Continental and Mediterranean eating habits.
Italians have access to a broad range of fresh foods due to their
own wealth of agricultural production. However, they remain
fairly traditional in their food habits. While the per capita
volume figures paint a picture of a fish and vegetable hungry
Mediterranean nation, the per capita value figures also point to
a group of health conscious modern consumers willing to pay a
premium for quality food products. While the recent economic
recession put a damper on luxury food sales and expensive
restaurant visits, Italy still spends more per capita on food
than any other EU country except Portugal.
Both American style fast food chains and American style
buffet/salad bars are establishing themselves more firmly in the
Italian market. This move toward cheaper and more convenient
dining has led Italian importers to seek out U.S. food products
adapted to self-service eateries. Many bars, restaurants and
food service companies also are seeking foods that microwave
easily. While home use of microwaves is still low, microwaves
sales are increasing. Families with two working parents in the
cities are relying more and more on microwaves to reheat food and
prepare frozen foods.
Italy imports and produces a large quantity of "American style"
foods such as breakfast cereals, organic foods and snack foods.
The Italian youth market is especially interested in lifestyle
foods such as American beer and salted corn chips. Finally,
American packaging is perceived as being more sophisticated and
more consumer (and environment) friendly.
Trade journals predict that Italian companies will be seeking
more foods that meet U.S. standards of quality control and FDA
labeling. American style innovations in food marketing (i.e.
cross brand marketing) is predicted to be a U.S. driven trend in
Italy within several years. Finally, Italians are looking to the
U.S. for a better understanding of organic and low fat foods.
In the non-alcoholic beverage area, demand is booming for
flavored mineral waters, isotonic (healthy) drinks and fruit
juice based drinks of all kinds. Finally, U.S. origin products
do very well in the Italian seafood market (i.e. fresh lobster
and frozen squid, etc.) and U.S. exports of bulk and packaged
dried fruits and nuts including popcorn are on the upswing and
expected to rise in the next year.
In addition to high-value products, U.S. companies also should
look for opportunities to supply Italian export industries with
raw materials. Some of the best prospects are:
Logs (2471000)(2472020)(2472010)
PS&D Code: IT9655A
[1000 Cubic Meters]
1995 1996 1997
A. Total Market Size 8357 7887 7560
B. Total Local Production 2640 2670 2660
C. Total Exports 3 3 7
D. Total Imports 5720 5220 4900
E. Total Imports from U.S. 314 214 210
Processed Wood Products (2482000)(2483020)(2483040)(6342010)
PS&D Code: IT9655A (6343200)(6416120)
[1000 Cubic Meters]
1995 1996 1997
A. Total Market Size 11391 11700 12440
B. Total Local Production 5073 5575 5130
C. Total Exports 806 965 730
D. Total Imports 7124 7090 7310
E. Total Imports from U.S. 540 705 575
Comment: Forest products remain the most important U.S. export to
Italy. Total value of U.S. forestry products increased by 22% to
$224 million in 1997. However, the volume of imports, as shown
in the tables above, decreased as a direct result of the higher
value of the U.S. dollar versus the Italian lira. The Italian
forest product market is characterized by the import of raw
materials for manufacturing finished products for export. The
Italian economy also affects domestic purchases of these
products, but a strong foreign demand is compensating for the
weak demand in the domestic market.
Oilseeds (2230000)
PS&D Code: IT9706A
[1000 Metric Tons]
MY1996 MY1997 MY1998
A. Total Market Size 2469 2477 2495
B. Total Local Production 1492 1841 2160
C. Total Exports 28 84 115
D. Total Imports 1020 715 460
E. Total Imports from U.S. 462 208 108
Oil meals (0810000)
PS&D Code: IT9706A
[1000 Metric Tons]
MY1996 MY1997 MY1998
A. Total Market Size 3795 3699 3752
B. Total Local Production 1673 1679 1692
C. Total Exports 28 40 50
D. Total Imports 2140 2060 2110
E. Total Imports from U.S. 178 200 200
Comment: A continued strong demand for oilseeds lead to an
increase in 1997 production of 23 percent to 1.8 MMT from 1996.
The increased domestic production, coupled with decreased
consumption, led to a drop of 14 percent in oilseed imports in
1996/97 to 832,000 MT with continued drops expected. U.S.
exports to Italy (452,000 tons in 1996/97) are also expected to
decline. Oilmeal consumption, after the 5 percent decline of
1996/97, is anticipated to decrease further this year, due to
decreasing compound feed production, as well as surplus supplies
of domestic corn used by farmers that do not use compound feeds.
Soybean meal imports from the U.S., however, grew by 125 percent
in 1996/97, albeit from a low base. This shift was in part
attributable to adjustments in the Brazilian export tax system.
Imports of corn gluten feed, mainly from United States, dropped
by 10 percent, due again to large domestic corn supplies.
Grain and Feed (0410000)(0440000)(0430000)(0422110)
PS&D Code: IT9711A
[1000 Metric Tons]
MY1996 MY1997 MY1998
A. Total Market Size 23152 23210 23010
B. Total Local Production 20008 19825 19310
C. Total Exports 3370 3440 3754
D. Total Imports 7050 7250 7580
E. Imports from U.S. 550 620 550
Comment: The Italian market for U.S. grains is presently
restricted to certain wheat classes used by the local processing
industry to produce particular kinds of flour or semolina.
Quality continues therefore to be the major factor affecting U.S.
shipments to Italy. Imports of U.S. bread wheat mainly consist
of Dark Northern Spring (chiefly produced in North Dakota)
imported to improve the quality of flour blends used to produce
traditional Italian holiday cakes. Shipments of U.S. durum,
which are mainly "desert" durum from Arizona and southern
California, are growing, mainly because Italian pasta makers like
its special quality aspects. Competition from Canada remains a
major constraint to sales of U.S. wheat in Italy. Another good
export prospect is for U.S. pulses. Competitors to U.S. pulses
in the Italian market include China, Argentina and Turkey. The
market for U.S. feed grains and rice remains limited, because of
the high level of domestic production.
Tree Nuts (0577400)(0577500)(0577901)(0577907)
PS&D Code: IT9614A
[1000 Metric Tons]
MY1996 MY1997 MY1998
A. Total Market Size 172.4 184.0 166.5
B. Total Local Production 116.3 149.5 132
C. Total Exports 68.9 72.5 50
D. Total Imports 88.0 81.0 75
E. Total Imports from U.S. 23.8 17.9 11
Comment: Italy has become a large nut importer, although imports
fluctuate based on the size of the domestic crop. U.S. exports
to Italy depend heavily on price. For walnuts, U.S. in-shell
shipments compete mainly with the domestic crop, with 90% of
imports coming from California. As older trees are not replaced,
domestic walnut production is expected to decline in the
medium-to-long term, expanding market opportunities for U.S.
nuts.
Almond imports also depend on the size of domestic production
which is also expected to decline over time. California almonds
represent 50% of total imports. Good prospects also exist for
dried fruits from the United States, particularly prunes, which
are successfully promoted in Italy as a healthy snack food.
Limited market potential, on the contrary, exists for U.S.
raisins, due to strong competition from Turkey.
Cattle and Swine (0013000) (0011000)
PS&D Code: IT9752B*
[head]
1996 1997 1998
A. Total Mkt Size/Slaughter 16500 16650 16630
B. Total Local Production 15104 15148 15343
C. Total Exports 68 68 43
D. Total Imports 2800 3070 2830
E. Total Imports from U.S. - -
* Does not include genetic material
Comment: The United States is the leading supplier of genetic
material (bull semen), accounting for approximately 55% ($5
million) of total imports. The majority of these imports are for
semen from Holstein Frisian bulls, but a market also exists for
Brown Swiss semen.
Hides/Skins Bovine (2111000)
PS&D Code: IT9652B
[Metric Tons]
1996 1997 1998
A. Total Mkt Size (Consumption) 615 570 560
B. Total Local Production 92 92 92
C. Total Exports 29 35 38
D. Total Imports 519 500 500
E. Imports from U.S. 19 18 18
Comment: Italian imports of U.S. hides and skins are strictly
linked to the fortunes of the Italian tanning and leather
industry. Production in 1997 stabilized following a decrease in
1996 from the BSE crisis. The popularity of American style
shoes, which require a heavy side leather, accounts for the
demand for the U.S. product. Production in the Italian tanning
industry declined slightly in 1997, due to a decline in Italian
shoe and leather exports. Imports of U.S. hides and skins
increased almost 400% in the early months of 1998 as Italian
importers took advantage of lower prices resulting from a
temporary collapse of Korea's leather processing industry.
Italy, is also the largest consumer of classic reptile skins in
the world (including alligator from the US, Nile crocodile and
crocodiles from Africa, Asia and Australia). The skins are used
to support Italy's position as the world's largest producer of
shoes and leather goods such as bags, belts, wallets made from
reptile skin. In 1997, Italy imported approximately $32 million
of reptile hides, of which $3.6 million came from the United
States.
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