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An Entrepreneur On Every Block...And Not One Kind Word For Rome (Int'l Edition)


International -- Spotlight on Italy

AN ENTREPRENEUR ON EVERY BLOCK...AND NOT ONE KIND WORD FOR ROME (int'l edition)

Sixteen years ago, Claudio Franceschet was a mechanic in a tile factory when he decided he'd had enough of working for somebody else: "Once in a while, you get to choose what you want to do in life." He began studying metallurgy in the evenings, and in 1982 he resigned to found Eva Stampaggi, a maker of lighting components. At first, the company consisted of a prefab shed in his father's small vineyard in Vazzola, where he and his wife worked endless hours in heavy aprons dirty with oil. Today, the 40-year-old Franceschet has 25 employees and sales of more than $7 million.

Tales like Franceschet's are common in Italy's Veneto region. Forty years ago, this was a penniless agricultural zone being bled dry by emigration. Gradually, the local economy gelled, and the Veneto began a boom of epic proportions in the early 1970s. Today, the region's 4.4 million inhabitants, 7.7% of Italy's population, produce 9.2% of its gross domestic product and a third of its trade surplus. And despite the economic funk known as la crisi afflicting most of Italy, Veneto's boom shows staying power. Growth in 1996, at 1.8%, was down from the stellar 4.5% of 1995 but was still more than twice the national average, and Cambridge Econometrics expects growth to continue at 4.1% annually through 1999.

The key to the Veneto's success is an entrepreneurial drive that seems almost genetic. One in 15 inhabitants is an entrepreneur, running small businesses of every type, from ski boots to fine wines to heating systems. These businesses have grown in clusters, like the 2,000-odd jewelry makers between Vicenza and Bassano with annual sales of $2 billion-plus, or the 1,100 outfits that make the Belluno area the world leader in eyeglass frames.

But what's most remarkable about Veneto is the flood of exports it turns out. For the average small business there, sales abroad represent an estimated 50% of revenues. Exports received an added boost in 1992, when the lira dropped out of the European exchange rate mechanism (ERM) and was devalued 30% overnight. Between 1992 and 1995, Veneto exports grew at 25% per year, to $34 billion in '95. Last November, the lira reentered the ERM at 990 to the German mark, and although this is a higher rate than exporters would like, most remain confident. "Our high product quality will protect our market share," says Cirillo Marcolin, the second-generation head of a thriving eyeglass-frame manufacturer in Belluno.

"IT'S EASY." When it comes to explaining Veneto's miracle, everyone has a theory. Some link the fanatical attention to detail and hard-driving work ethic to nearby Austria, which ruled the region for much of the 18th and 19th centuries. Others explain the triumph in foreign markets by pointing to the local tradition of diplomacy, which Venice raised to a high art during the Renaissance. But the entrepreneurs themselves tend to give simpler answers. "My success is due to hard work," says Daniele Dadalt of Esse 85, a steam iron manufacturer that he founded in 1985. "I work 16, 18, 20 hours a day, giving my company two managers for the price of one." Franceschet is even more succinct: "It's easy, no? Just make a better product."

Needless to say, the self-reliant veneti have little use for central government--especially one that takes a 60% bite out of many companies' profits. "We send all that money down to Rome, but very little comes back," says Floriano Pra, regional minister for economic development. The local road and rail networks are malnourished, and the economic growth spurt is straining traffic systems--and tempers--to the breaking point.

Disaffection with Rome has helped make the Veneto the electoral heartland of the Lega Nord party, which is pushing for outright independence from the rest of Italy. Over the past five years the Lega has skyrocketed in popularity and is now the region's leading party. But while nearly all entrepreneurs want more self-determination, most stop well short of separatism. "I am 100% Italian and make my business decisions accordingly," says Dadalt. "We got rid of the wall in Berlin, and now we want to rebuild it across Italy?" It remains to be seen if the veneti will keep this in mind as they go to the ballot box.By Tom Mueller in Milan EDITED BY HARRY MAURERReturn to top


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