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February 8, 2011

No Italian Job

By Spear's

Francesco Canepa looks into the reasons why a new generation of Italians is setting sail — and why this is good news for Britain 
AS POLITICIANS IN Rome are busy wrangling over possible early elections, hundreds of thousands of their countrymen have already voted — with their feet. Fifty thousand Italians, most of them under 40, expatriate every year, although it is estimated that several thousands more set sail without leaving traces in official registers. While the outflow is largely offset by immigrants, expatriation figures are giving those in the control room plenty to think about.

The profile of those leaving has changed radically in the past decade, when the number of graduate expats doubled. The problem is that Italian migrants are more reluctant to repatriate than their European peers, which means the skills they develop abroad will not be reinvested in their country of origin.

‘Italy educates its children, who then expatriate and become productive somewhere else,’ notes Simona Paravani, a globe-trotting wealth manager who, in her spare time, runs a social network dedicated to connecting those who are participating in Italy’s brain drain.

‘This trend is bound to have an economic impact as we lose skills and abilities that should form the backbone of our country’s economy.’

Why do so many graduates leave their homes in what is the world’s seventh richest country? Probably because Italy does not have much to offer them. Fewer than one in two has a job one year after completing their degree, and those who do earn a meagre one thousand euros per month on average. Climbing higher up the career ladder can prove impossible, as the best jobs are often reserved for the ‘old boys’ network’. While publicly stigmatised, nepotism is still common practice.

It’s not difficult to understand why Britain has become the country of choice for so many young Italian professionals. Many of them first come to the UK with the aim of improving their English or attending a post-grad programme but are persuaded to stay by a more stimulating business environment and higher salaries.

Matteo Berlucchi understands why people leave. The descendant of a wine-making dynasty, Matteo left behind his family’s vineyards in 1992 and joined London’s Imperial College to work on a nascent technology: the internet.

He went on to become one of the UK’s web pioneers and is now leading a high-profile project launched by one of the UK’s largest media retailers. Asked whether he could have achieved the same success in his native country, he shakes his head wearily.

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‘It’s just more difficult to export ideas from Italy: it’s a question of scalability, mentality and bureaucracy,’ Matteo explains. ‘Italy is a viscous country,’ he argues, deriving a word from his years as a physics student to describe the bureaucracy that immobilises the nation. ‘You have the impression that everything is working against you.’

Matteo highlights the importance of a transparent and efficient legal system to the success of a small business. Enforcing a contract through legal action takes an interminable 1,210 days in Italy, three times as long as required in the UK and Germany, according to the World Bank. Slow justice also means that some trials never come to a verdict due to the statute of limitations, meaning potential offenders go unpunished.
NOT ALL ITALIANS who crossed the Channel arrive armed with academic qualifications like Matteo. As a budding chef, Giorgio Locatelli packed his cooking tools in the late Eighties to fulfil his dream of working at London’s Savoy hotel. The capital’s cosmopolitan environment and open-minded culture impressed him to the point that, years later, he seized the first opportunity to come back and start his business. He is now the owner one of London’s most chic Italian restaurants, the eponymous Locanda Locatelli, which also has a branch in Dubai.

‘I spent some time working in Paris as well, but London is different — you never feel like an immigrant here,’ says Giorgio. ‘People are so curious about the food of other countries. Their knowledge of Italian cuisine has grown five-fold in the past five years as Italian products have become more readily available in supermarkets, also thanks to people like Jamie Oliver.’

Giorgio is adamant that success in his industry is exclusively a function of ability and motivation, which outweigh all external factors such as the economic and political environment. However, asked where he would be working now if he were a young chef, he does not spare a thought for his native country and answers without hesitation: ‘Singapore’.

Giorgio, Simona and Matteo come from very different walks of life, which have at least one thing in common: they have no intention of retracing their steps back to their homeland. In an effort to staunch the talent haemorrhage, the Italian Parliament recently passed legislation introducing tax incentives for graduates who come back after a period abroad.

‘These new measures are welcome, of course,’ says Simona, ‘but you cannot just bring back the odd superstar; you need a whole constellation of stars.’

This article, written 24 January 2011, is (c) Standard & Poor’s Financial Services LLC 2011. All rights reserved.

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