3. Context factors within Treviso economic system

3.1 HUMAN RESOURCES

Context factors contributing to territorial attractiveness can be divided into those related to human resources, and those related to economic-financial resources.
Among all the surveys carried out on this topic, the ones that have been chosen have the simplest and most understandable parameters, and the most recent data: more precisely, the indices used in this analysis are the most significant coming from the researches published at the end of each year by the Italian economic newspapers Il Sole 24 Ore and Italia Oggi, which include the rankings for all the Italian provinces.
Registering the index related to Treviso at any time considered, and its position compared to other provinces, can give the cue for the evaluation of the cited context factor, in order to understand whether or not it contributes to the attractiveness of the provincial territory.
It is important to consider that Treviso is ranked sixteenth as for the context and sectoral structure factors indicated therein, according to the analysis that was described in the previous two paragraphs.

Here we are dealing with the human resources-related context factors from different points of view, but anyway considering only those which interfere more directly in the economy and business.
The data in the chart below were available date from the end of 2005, and being annual results, they highlight a non-structural nature that could have possibly suffered modifications during the following periods. However, many values are referred to the previous years and it is thus likely that the situation will not change radically in the future either, in the absence of distinct interventions and/or behaviours. Obviously, subsequent checks and updates will be carried out at regular intervals.

The first three indicators are related to employment, and show respectively:

1. an excellent placing as for employment and unemployment rates;
2. the highest position for what concerns the presence of non-EU citizens among the total wage-earners.

It means that immigrant workforce is employed for production requirements in Treviso more than elsewhere, and this is not in contrast with domestic employment, since employment and unemployment rates are favourable and reported to be improving.

Some further progress could however be achieved through a strong promotion of youth and female employment, which can be exploited more effectively.

The second group of indicators highlights:

1. Treviso’s good placing as for number of enterprises per thousand inhabitants;
2. a low ratio between enterprise openings and closures.

The meaning of both these results must be clarified: as for the first one, we ought to observe that as our province attracts foreign workforce, its resident population is experiencing a considerable increase (notwithstanding the natural decrease in the native population) and, in consequence, the number of enterprises confronts a higher number of inhabitants than other territories.
Furthermore, it should be taken into consideration that Treviso enterprises are on average larger than those of other provinces, and therefore development is more evident in the growth of existing units than in the creation of new companies. This phenomenon fits with competitiveness requirements, needing a strong production system also in terms of size. This applies above all to the manufacturing industry, in which economies of scale and variety of skills have to be more marked.

Also the second indicator is lower than other provinces’ average for the same reasons, i.e. because the increase of new enterprises is less frequent.

Contrarily, there should be a drastic intervention in favour of the creation of innovative and high-tech enterprises: all in all, very few of them are based in Treviso, where traditional service sector activities continue to prevail among new companies.
In relation to that, the amount of closures keeps being high in our province, as usually occurs in any Italian area, due to the prior weakness suffered by enterprises: indeed, they often showed low competitiveness and the lack of a suitable, rational business plan.

The third group of indicators displays:

1. an elevated number of insolvencies compared to the existing enterprises;
2. a non-alarming average amount of protests, even though not optimal either;
3. a favourable ratio of bad debts to issued loans.

It is evident that insolvencies and protests are more numerous in Treviso than in other areas, as symbols of an unusual crisis situation; on the other hand, the average performance of the economic system is excellent, precisely because the third indicator represents the situation of bank loans referred to the whole economic system, which is likely to be affected the most, in case of generalized difficulties. Therefore, we can summarize by observing that the first two indicators include unusually negative elements which are balanced by the positive situation displayed by the last report.

In conclusion, we can state that human resources-related context factors in Treviso province show an overall positive attractiveness degree, considering that:

• the employment situation is good;
• business expansion is aimed at growth in size more than quantity of enterprises;
• the economic performance of enterprises and families’ systems is comprehensively stable.

3.2 ECONOMIC AND FINANCIAL RESOURCES

The foregoing paragraph highlighted that human resources in Treviso province show an overall positive attractiveness degree thanks to a good employment situation, a widespread entrepreneurship with dimensions more significant than in the fragmented national system, a stable economic performance (even in periods of reorganization and reconversion) of enterprises and families.
Now we’re going to deal with economic and financial resources, according to some main indicators gathered from the annual surveys of the economic newpapers “Il Sole 24 Ore” and “Italia Oggi” in this case too. Data are displayed in the table below.

The results emerging from the table indicate that as for per capita added value, which represents the wealth produced during one year and the development of a territory, Treviso is not ranked significantly high.
Actually, it is necessary to consider that this indicator is annual, and that our province had achieved higher rankings in previous years.
Apparently, the reorganization and reconversion required by the manufacturing sector (which prevails in Treviso, as well as in Vicenza) in the last years prevented the added value to grow higher, but in 2006 a recovery began, which went on in 2007 and which will probably help enhance these results.
Furthermore, it must be remembered that, as for exports, Treviso and Vicenza are the most active provinces in Veneto region, and near the top in Italy too.
Strong international competition, therefore, doesn’t allow local enterprises to achieve large margins: that’s why it is often necessary to sacrifice productivity (and profitability) for competition. In other terms, if enterprises wish to keep being competitive and have a good position on foreign markets, they should offer goods and services at prices that don’t let them reach an added value equal to that achieved on domestic markets.

However, it would be necessary to check also the labour and capital productivity, which is not listed among the considered indicators.

Bank deposits performed better in Treviso, denoting a propensity for saving with respect to income.
As for loans, which would certainly secure the podium positions to Treviso, data are not available; although, everyone knows Treviso enterprises often have recourse to this form of financing, and thus we can infer that savings are all invested “in situ”, where also other territory’s savings are absorbed.

Low pensions can be case-by-case explained, as part of the national regulation, by the situation of everyone who receives them (with low wages and/or short service).
Perhaps this is exactly the reason why Treviso is ranked 19th as for premiums paid for life insurance policies, which are aimed at supplementing a weak social security.

Due to low incomes and tendency to economize, inhabitants’ consumption expenditure is not significant; nevertheless, the annual change in consumer prices is not particularly worrying, but rather good in relation to the majority of provinces.

High house prices deserve to be commented separately: in fact, they soared in the last years and caused Treviso to rank among the last provinces in the national classification.
This phenomenon mainly depends on the fact that immigration in this province (as highlighted by the human-related context factors listed in the previous paragraph) is at the top of Italian standards (non-EU citizens are the 17.1% of the total wage-earners).
Moreover, EU citizens and Italian people coming from other territories (mainly the Centre and South of Italy) who work here must be taken into consideration too, since they have to find a house within this area. In this regard, it is important to underline that the building sector increased its activities during the last years even when other sectors remained stable, and thus met the majority of new demand; however, it provoked an inevitable surge in house prices.

The new predictions of recovery of Treviso economy might not halt this phenomenon, and it is therefore likely that the building sector will keep growing due to the increase of workers coming from outside the province, and consequently that house prices will undergo further increases.
In other terms, the attractiveness of Treviso territory continues to manifest itself by means of the influx of outside workers, who obviously cause the number of residents and houses to grow within the territory, as well as consumption.

Data on the settlement of new foreign enterprises in Treviso are not available, but it is possible to refer to operating entrepreneurs and to foreign ones (both EU and non-EU citizens).
Though a provincial ranking doesn’t exist at national level, data highlight that, with respect to total industrialists in Treviso, EU entrepreneurs are a 1% (the national average is equal to 0.9%) and non-EU entrepreneurs a 3.5% (national average 2.4%).

It means that Treviso attracts foreign capitals more than other Italian provinces do, but it appeals mainly to foreign workers.
This happens notwithstanding economic and financial context factors, which are not very relevant. Evidently, there are some other locational factors influencing investments in Treviso; they have not been included in the table below because they weren’t detected by the considered surveys. We can cite a few qualitative ones, such as: low wage levels in most Treviso enterprises, a more frequent collaborative effort between the employer and the employee, a fabric of flexible SMEs, etc.