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Brexit to Have a Positive Impact on the Made in Italy brand

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Livio Vaninetti, Director of Frost & Sullivan Italy, comments on the implications for the country following the Leave vote in the UK.

In Italy there is wide consensus regarding the negative impact that Brexit will have on the British and European economy, both in the short and in the long term, but there is much disagreement about the size and intensity of such impact.
 
According to Frost & Sullivan, Italy is among those countries less vulnerable to Brexit if we consider factors such as the export of goods and services towards the UK (currently around 3 percent of the national GDP), bidirectional emigration fluxes, and financial sector credits.
 
"However," argues Livio Vaninetti, Director of Frost & Sullivan Italy "it is inevitable to expect an impact on the prices of Italian companies in the stock exchange as well as on the spread in the short and medium term, due to the general instability of the markets caused by the Italian national debt. We must also consider the potential risk of emulative effects from other EU countries."
 
To schedule an interview, or for more information on a Frost & Sullivan's workshop on the impact of Brexit on businesses, please contact Chiara Carella, Corporate Communications: chiara.carella@frost.com
 
There are three main opportunities that Brexit could generate for Italian companies:
 

  1. In the coming years, it is likely that a partial delocalisation of international organisations from the UK towards the EU will take place – in particular, manufacturing activities that use the UK as a gateway to the EU. For example, Britain could see the departure of automotive plants from its shores if manufacturers cease to enjoy the benefits of tariff-free trade with the EU. This could result in interesting opportunities for Italian companies operating in this sector. Another example is digital platforms operating in the e-commerce and e-economy space, which are hardly likely to remain outside the EU and continue to have access to the invaluable BCE guarantees. The presence of technological districts in Italy, filled with companies that are particularly innovative in their niche, possible government agreements regarding detaxation for international companies that wish to relocate to Italy, in addition to the lifestyle, could be trump cards in this process.
  1. The long term effects of Brexit could be paradoxically positive, resulting in a more united Europe focused on ensuring better prospects for growth and employment. Italy would have all the necessary credentials to play a key role in this new scenario. With one less political competitor at the European table, Italy would be able to push even more favourable agreements and conditions for Italian companies operating in the EU context.
  1. Italy's role in exports and in the development plans of EU peripheral countries could be even greater than before, particularly in Eastern Europe. Brexit could lead to a revitalisation of relations with Russia and to a further expansion of the EU towards Eastern Europe. The impact on Italy would certainly be positive, especially in strong sectors such as Made in Italy, luxury, transportation, naval, pharma, food and beverage.

What do Italian companies have to do in order to seize these opportunities? "While not overlooking the risks and costs in the medium term" continues Director Vaninetti, "the key in such challenges is the speed at which our companies and government will be able to respond. Several companies will have to revise their strategic plans

and carefully evaluate the direct and indirect impacts. They will also have to consider possible changes outside the EU, for example in respect to countries with which the UK signed agreements through the EU that, in the future, will no longer be valid. Certainly, those who want to take advantage of these rapidly evolving dynamics should carefully analyse the different scenarios in order to make strategic decisions based on thorough, all-round information."

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