8. Concluding remarks concerning economic and financial resources

The attractiveness of Treviso economic system was examined from the aspect of the various factors present in the province which make economic and trade relations with the rest of the world, and within the area itself, convenient and/or advantageous. These factors were then summarized and specified more clearly with regard to those traders and human resources intending to enter into or increase relationships with our local economy either permanently or frequently. To complete the picture, let us now consider the influx of economic and financial resources which could circulate in the province of Treviso along with human resources, certainly not to show solidarity nor for short-term speculation, but to reach medium- to long-term reasonable financial returns.

As has already been pointed out in this regard, these considerations apply both to potential outside investors and local investors who can use their resources to finance initiatives in the province of Treviso, or in the rest of the world. Of course, the resources involved may be contributed as owner’s equity or borrowed capital.
Starting with this second form of contribution, it is immediately evident that most of the influx depends on the banking system. It is also relevant that indebtedness of our enterprises depends also on other causes, the most prevalent being the debt due to deferment of payment agreed with suppliers and that for sums set aside according to the law for severance pay, used by the companies until required at the employees’ retirement (1) . What makes the difference at present, however, is the choices made by the banking system in giving short- or medium- to long-term credit, that is, their choice to fund to a greater or lesser degree the companies of a certain area rather than those in other areas.

In this respect, it can be observed that bank loans in the province of Treviso are higher than in all the other provinces in the Veneto region. Besides, the bank loans/deposits ratio in Treviso is the highest (2.7 in 2006) in the region (regional average being 2.1) and Italy (1.9). In the national ranking as for loans/deposits ratio, the province of Treviso is second, after Brescia. This means that the credit system is ready to grant more funds to the operators in our province, even if it receives less deposits from savers. Therefore, it is clear that banks divert funds from other parts of the region or from the rest of the country to Treviso.

This strong preference for companies in Treviso is connected with their reliability. In fact, the last available data of 2005 show that bad debt in the province of Treviso is equal to 1.8%, lower than the rest of provinces in the Veneto, the regional average (2.5%) and the national average (3.6%). Providers of borrowed capital (not only banks), can easily give credit to our businesses, maybe much more easily than to firms in other areas (2) .

Even with growth perspectives for Treviso, borrowed capital could still flow into the province because development prospects are favourable (as already been considered in previous articles and will be reported shortly) and new initiatives will certainly be partially covered by new risk capital. Furthermore, the low level of current bad debt is a guarantee of the capable and prudent model of business in economic management, respecting the financial commitments undertaken.

The positive frame of the borrowed capital drawn (or to be drawn) to our area becomes essential for good development as is also the attraction of risk capital, because it allows further increase of borrowed capital. These two variables must advance in proportion to ensure a balanced level of reliability in any economic initiative.

The financing of new investments with risk capital, therefore, is linked to their future profitability and convenience compared with alternative investments. By abstracting the calculation of this convenience from mathematical formulas, it is possible to state that the level of net return (weighted considering the relevant risk) in the medium and long term, representing the discriminating factor when choosing one investment rather than another. In general, beyond the specific element to be financed, it is important to weigh the economic prospects of a system, which are crucial to foresee opportunities for future investments, thus the development of a particular area. On the other hand, prospects for development are also important for attracting both human and financial resources, and therefore it is also the same for risk capital.
Therefore, all the final remarks already made regarding the attractiveness of Treviso economic system for people operating in the economic sector also involve people contributing risk capital, because most of them are the entrepreneurs themselves, although ordinary investors who give their capital without participating directly in the management should be much more. For these two categories, however, the choice of convenience is the same and therefore the same remarks apply.

In fact, attention was drawn to the main contextual and sectoral factors that show how investments in Treviso business activities are convenient and promising for development. Without repeating what has already been indicated, we can affirm that the economy of Treviso – even if it does not allow very high productivity rates on average (with respect to both labour and capital) because of the strong competition of international markets – is probably more competitive because it maintains its market position globally. This guarantee of competitiveness compared with firms of other areas, less exposed to global competition, could be the winning element in the future, when foreign competition becomes stronger in the national market and companies are not prepared to cope with it. Such a situation implies that the most competitive companies in foreign markets will also take command in the internal ones.
For these reasons, despite the limited productivity and the consequent lower return on invested capital, the increased competitiveness of our production system is the guarantee of a lower risk of adversity in the future. Therefore, the prospects are favourable for investments in Treviso both for internal and external investors. This is the central element of attraction for capital and there are numerous opportunities for growth and development of new initiatives, taking into account the sectorial configuration and the composition of our trade balance with foreign countries (as already mentioned in the article Final remarks for economic operators). The opportunities foreseen, as noted before, may originate from new products to be exported, from increased internal consumption, and lastly entering those new sectors, advanced both technologically and as for organization.

Infrastructures, notoriously inadequate for the needs of our production system, could be funded through public works co-financed by private individuals with “project financing”. If there is confidence in investing risk capital in our area according to the above-mentioned reasons, then its use in infrastructures could be realized by the same investors wishing to enhance competitiveness (together with productivity, in this case) of such initiatives they have believed in and in which they have invested.


  1. Now, with the employees’ option to choose the alternative of paying their severance funds into Pension funds, the territorial attraction can play an important role in this respect, but it is still early to make predictions.
  2. Supporting this hypothesis, the fact that the ranking of average interest rates in the short term sees the province of Treviso in 17th place in Italy with a rate of 6.28%. This percentage, although better than the national average (6.43%), can hardly be placed in the leading positions as the low bad debt rate might suggest. Therefore, we can deduce that the reliability of the system can be seen even with a financial burden not of the lowest and even if the credit received is proportionally higher. These results represent further elements demonstrating the financial stability of Treviso economic system.