Pocketful of Efficient Entrepreneurs Powers Italy's Wealthiest Corner

Veneto features Benetton, BMWs, and big ideas from little firms

A stroll through this town of some 85,000 people is all it takes to understand why the average Italian finds it such an odd place. Cobbled streets gleam as luxury sedans peel by, 500-year-old buildings look brand-spanking new, and nearly every other woman wears a fur coat. Mink, of course.

Treviso, like most of the Veneto region around it, is a nook of wealth and efficiency in a country ridiculed by its European partners for its chaotic crusade to join Europe's single currency by next year.

"Treviso is Treviso in spite of Italy and its zillion governments," says Treviso resident Nico Pinton. Few Italians would disagree. Italy has had 55 governments in the past 50 years. Its monuments are crumbling, pensions are frequently unpaid, the bureaucracy is criticized as inefficient, and buses and trains often run late.

Yet Treviso shines, and so does most of Veneto, a northern region that generates close to 30 percent of the country's wealth and has an unemployment rate of 5.1 percent - less than half the national rate of 12 percent.

Many in Treviso own high-priced German or Japanese cars, designer clothes, and gold Rolex watches. They take off to the Caribbean once or twice a year and go skiing in exclusive Cortina d'Ampezzo at Christmas.

"There's no doubt this is an affluent place. The reason is that there are over 56,000 small to medium-sized businesses in this province of 750,000 people," says Nicola Tognana, president of Unindustria, an organization of the region's industrialists.

What this means is that in Treviso there is one business for every 12 to 13 inhabitants. Almost all of them are family-run.

This is the key to the northern region's prosperity: a dense concentration of very small companies making everything from ski boots to clothes to kitchen counters.

A few giants are here as well, such as Benetton Sports System with its 2,500 employees - 1,200 of whom work outside the Treviso area. But such companies constitute the exception rather than the rule, observers say, and are not what ultimately makes Treviso and the Veneto region rich.

"Kids here grow up with the desire to set up their own business," Mr. Tognana says. "We help them the way we can."

For example, Unindustria and business owners have established, and essentially pay for, college-level courses in management, banking, marketing, and computer programming. The local paper, Il Gazzettino, routinely lists the courses that are available, as well as the number of registered students.

Considering that in 1995, the youth unemployment rate in Italy reached a record high of 33.9 percent, with peaks as high as 64.3 percent in the south, Treviso's 12 percent youth unemployment rate stands out.

"We try to make up for the shortcomings of our schools and universities," Tognana says. "With an education as bad as the one the state provides, it's really up to us. We need managers, not accountants, which is all the public school system generally offers us."

To get these courses going, Unindustria obtained funds from the European Union, pitched in some of its own money - provided by the organization's 12,000 members - and set a low fee for students.

The result is an unemployment rate of 3.4 percent in Treviso, compared with the average 26 percent in some southern towns. In addition, Treviso boasts a level of productivity so high that it accounts for 15 percent of Italy's entire trade surplus.

Yet Treviso's wealth doesn't show up in some of the official numbers. In fact, it ranks an uninspiring 43rd on the list of Italy's richest cities, with a per capita income of $21,000.

"That's because part of its economy is submerged," explains Vittorio Filippi, a professor of Social Economics at the University of Venice. "People start working at a much younger age here than the national average and, in certain industries such as the textile industry, there is a tendency to work two jobs.

"What a relatively low per capita income means is that there's hardly any unemployment and that wealth is spread out more evenly," he says.

The genius of Treviso's economy, observers point out, is in the size of these 56,000 companies. Most of them are small enough to stream through the Italian bureaucracy's meshes far more nimbly than large industries or corporations.

A company with more than 50 workers, for instance, is subject to more regulations - many of which are union-related - than a small, family-owned business.

The acquisition or leasing of land for industrial purposes also tends to follow a simple rule: The greater the space required, the larger the bureaucratic impediments.

Not that the state bureaucracy is exactly friendly to small businesses. "It takes 29 different permits from 29 different public offices over a course of at least 10 to 11 months to set up a small business," Unindustria's Tognana says.

Compare that with France, where companies applying for permits in the booming region around Lyon have only a 60-day wait and apply to a single office. In the United States, entrepreneurs have been known to get a business up and running over the course of a few weeks.

The lack of hierarchy is another distinctive and favorable trait of the local economy. "Most of these businesses are small enough to be run informally," says Sergio Peccoli, whose plastics company made $40 million last year.

"Mine is a typical example. There's only eight of us, and no one minds me, even though I'm the boss."

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