An Italian Lesson for Europe: Immigration May Not Be Forever!

Italy is presently making headlines because it is a country where a political party led by a stand-up comedian has just won the largest share of votes to the Chamber of Deputies in a general election (and where, some may posit, another stand-up comedian who happens to be a longstanding statesman is also polling strongly).  But the backdrop of these elections continually looms over the polling figures: the Italian economy, Europe’s largest as recently at the early 1990s and still a key eurozone and G7 member, is faltering. Austerity measures forced through by the mysterious technocrat ‘Super’ Mario Monti have not delivered the promised land of fiscal respectability, and any entity wanting to push through stimulus measures or even leave the euro may find its path blocked by the twin towers of massive extant public indebtedness and a near-certain currency war.

How this hotly-contested election (or a potential re-run later this year) will pan out is anyone’s guess. But one barometer of one of the few potential sources of authentic growth for Italy makes for ominous reading. As the Financial Times reported in its recent article with a self-explanatory title - Immigrants abandoning recession-hit Italy (6th January 2013) – both relatively and absolutely recent arrivals to the boot-shaped nation are packing their bags prontissimo. The reasons behind their departure are telling, and comprise a sobering warning to other EU economies which forget the immense value that migrants bring to their economies – not to mention their societies – that in an era of unparalleled economic globalisation and flattening, people – migrants included – increasingly have options:

1. What’s a Job Again? ‘No business and no work. It is a terrible situation.’ This is the refrain that characterises the situation faced by huge numbers of agents in the Italian economy. Living in a First World country may have little meaning if there is no way to make a living – and immigrants to Italy from rapidly-developing nations such as China are cutting their losses and heading back to Asia.

2. Fighting them on the Beaches. In recent years, Italy has become synonymous with a crude racism that is not befitting of a land that has traditionally been an important mediator between Europe and the exotic East. Ignoring dead Roma girls whilst sunbathing, treating African-heritage footballers as subhuman and exhibiting visceral hostility to Yugoslavs, Albanians and Maghrebians are just a few examples of this trend. But immigrants are well aware of how they are perceived. As many as 800,000 of them may have left Italy in recent years without cancelling their household registration, meaning they are still officially in the country; these ‘ghosts’ may haunt the Italian peninsula for many years to come.

McDonald’s: Lovin’ It, Adriatic-Style

The beginning of February has been a particularly time-starved period for Mediolana’s CSO, so the news that McDonald’s – that purveyor of speed-defined food – is planning a massive expansion in Italy seems particularly apposite. Like many of its eurozone partners, the Italian economy is reeling from the ongoing financial crisis and its fallout: the official unemployment rate has nudged up over 11%, while youth unemployment is more than three times this figure at 37%. With foreign direct investment having fallen c.30% since 2007, the junk food icon’s US$457m McProposition is a hard one to resist: quite perceptively, McDonald’s recognises that giving people attractively-priced, meat-rich meals in a depression is likely to be a winning formula.

Yet the genius of McDonald’s is not restricted to exploiting gaps in mature, post-development markets on a downward trajectory. Across the Adriatic (and following an epic cultural, economic and gastronomic battle stretching across three decades), the Golden Arches are now colonising Bosnia and Herzegovina: following the opening of the country’s first McDonald’s on Marshall Tito Street in the capital Sarajevo, five outlets are now operating in the heart-shaped Balkan territory. In Bosnia, McDonald’s is seen (at least by some) as a measure of international investor confidence in the country, as well as a symbol of capitalist affluence: far from being a cheap and filling eat, a Big Mac meal is viewed as an entrance ticket to perceived global standards of normality.

This is an extraordinary triumph of marketing, because in two adjacent economies – Bosnia and Herzegovina shares a sea border with Italy – with many shared characteristics and a high future possibility of convergence, McDonald’s has nevertheless accomplished the incredibly difficult task of making the same products encapsulate very different ideals: an Italian’s ‘bargain’ staple is a Bosnian’s aspirational treat. And though in both European states, the Golden Arches are looked upon by many with suspicion if not outright contempt – Italy is the home of the Slow Food movement, while Bosnia’s home-centred food culture with a high percentage of domestic produce is the antithesis of almost everything that McDonald’s stands for – enough people in these markets remain convinced, either actively or passively, about the value that the American fast food behemoth brings into their lives to make McDonald’s presence more than viable at this point in time.

A Decade of Mission Creep: Avoiding the Prada Paradox

While most people enjoying a few days in an isolated Mediterranean town a few kilometres away from a deserted beach would probably head for some surf rather than read the latest issue of a seminal commerce periodical, for better or for worse Mediolana’s CSO does not fit into this category; his recent, all-too-brief sojourn in Cyprus was dominated inasmuch as anything else by an article from the September 2012 issue of the Harvard Business Review by no less a figure than Patrizio Bertelli, CEO of Prada S.p.A. Staying Independent in a Consolidating Industry is an at times astonishingly frank account of the recent milestones and overarching philosophy of one of the global fashion industry’s most celebrated brands; whether one has any direct interest in this sector or not, the piece is well worth a few minutes of anyone’s attention.

A close reading, however, reveals a company that has had more of its fair share of challenges during the past twenty years or so, particularly those relating to its public flotation on the stock exchange, as Bertelli recalls: ‘Originally we planned to go public in Milan in late September 2001, but the 9/11 tragedy, followed by the second Gulf War, the outbreak of SARS, and a global credit crisis, upset our plans. We reacted to these events in a timely and innovative way, seizing new opportunities, and launched our IPO in Hong Kong in June 2011.’

Despite the (perhaps merited) positive spin put on his company’s trajectory by its charismatic CEO, there is no disguising that Prada suffered a ten-year delay in terms of its intended corporate trajectory – and this from a corporation that enjoys the advantages that only hundreds of millions or even billions of dollars in annual revenue and thousands of employees may confer. Clearly, there are lessons to learn from this hiatus – but what are they?

1. Plan for External Shocks. Like a great many companies across the economic spectrum, Prada was held back by a number of serious and mostly unexpected events. But beyond a point, should these events really have been so unfathomable? Certainly by the time of the outbreak of the Iraq War, more prescient analysts should have factored the massive reallocation of resources towards military expenditures into their calculations; moreover, was it really inconceivable that the greatest housing bubble of all time (at least, to date) could eventually pop, particularly given the recency of the dotcom bust?

2. Incorporate Change. Bertelli reminisces about the world in the 1990s as ‘a very different place’, and in some ways it indubitably was: most people were not betting their futures on the economic emergence of the BRIC countries, let alone Indonesia or Vietnam. But as any follower of major international football tournaments will tell you, change is something that has to be incorporated into planning. Croatia did not exist as an independent country in 1990, when Yugoslavia were placed fifth at that year’s FIFA World Cup; in the 1998 World Cup, Croatia finished third.

3. Let the Head Rule. Bertelli freely admits his regret that Prada acquired companies where the founding designer was still working as these were extraordinarily difficult entities to manage: ‘It was challenging to even talk to those designers, let alone meet their marketing expectations.’ Years expended on fulfilling the whims of difficult egos could have been spent, as Bertelli acknowledges, on developing Prada S.p.A.’s core brands – and perhaps getting to that magical IPO that bit sooner in the process.

Monologues from the Eurozone: Contradictions, Glamour & An Unnamed Associate

One of our number recently had one of those once-in-a-while experiences which makes a person wonder whether they are tuned into the same reality as the majority of the world’s population. It came in a Central London eatery, a glass-and-steel clone which one imagines was once the last word in high-definition living but now resembles just another asset on a private equity balance sheet.

Sipping a reasonably warm Earl Grey tea – a beverage which by some happy coincidence appears to have escaped total plasticisation – our representative was party to an extraordinary monologue emanating from the lips of someone who seemed to carry the entire burden of the heavily-indebted southern EU on their slender shoulders. A visibly upset former denizen of this now benighted economic black hole, this person passionately railed against the entire European project with all the force of one whose convictions have gone beyond the point of absolute and are now in the realm of  sublimity.

Thoughts ran through our representative’s head, of course. Lots of them. Perhaps it was not only the wealthy northern core of the EU which was to blame for the current crisis; maybe the generation of politicians in the periphery of Western Europe which signed over their countries to what they believed was a relentlessly prosperous future did not read the small print of accession; yes, even the possibility that nations such as Greece, Spain and Portugal – all in their own way prisoners of their own very different yet ultimately similar histories – could have run into the arms of the perfect Europe they perceived that little less uncritically…this dangerous ‘perhaps’ also entered their mind.

Made in Bursa: Tofaş Now Fiat’s Only Profitable European Partner!

Turkish auto giant posts 5.2% y-o-y profit increase, running at 'highest' capacity; Latin American exports 'surging' tinyurl.com/bvvpqve—
Asad Yawar (@Mediolana) August 14, 2012

Italy’s New Absolutism: Poverty

5.7% of Italians (3.4m) live in absolute poverty (2011), 13.6% more live in relative poverty; families 'overstretched' tinyurl.com/dynfvq4—
Asad Yawar (@Mediolana) August 08, 2012

French Revolution: Zlatan arrive à Paris!

Most cumulatively expensive football player ever leaves Serie A for Ligue 1; move 'symbolic of Italian decline' tinyurl.com/chtpqaa—
Asad Yawar (@Mediolana) July 18, 2012

Panenka, Postiga, Pirlo: Juventus Icon Adds Name to Chipped Penalty Maestro List

Andrea #Pirlo dinked penalty alters #psychology of Euro 2012 shoot-out; England crash out, Italy advance tinyurl.com/8yzgtsq #Ibricic—
Asad Yawar (@Mediolana) June 27, 2012

Paying Attention to Productivity: The Experience of Massimo Ambrosini

In an era which is arguably defined by distraction at the hands of electronic devices, high productivity is seemingly the Holy Grail that most seekers will not have a Belgian chocolate’s chance in hell of ever attaining. Yet as our CSO observed tonight’s 2011-2012 UEFA Champions League quarter-final first leg between AC Milan and FC Barcelona, it became clear to him that better productivity is within reach of anyone who attributes value well to their experiences, and seeks to learn from them.

This realisation was exemplified by a masterful performance by a midfielder who has won every major title possible for a player whose entire career has been spent in Italy, yet who garnered a mere 35 caps over nine years (1999-2008) for a national side that he was never a mainstay in: Massimo Ambrosini. Blessed with neither sumptuous technique nor physique – at a slender 1.82m, he is physically rather average – his game nevertheless evinces a precious refinement through one key attribute: his reading of a football match. Anticipating seemingly every pass, his breathtaking challenge to deflect Lionel Messi‘s shot wide was something that should not have been possible for a 34-year-old man in the seventy-seventh minute of an extraordinarily draining encounter. Yet his experience guided him to the optimal outcome.

Far too often in life, mistakes are made which on a closer examination of our existence to date are both recognisable and avoidable. Constant consciousness of who we are, where we are and what is occurring at any given moment – particularly during activities which are vital to our lives – should yield higher levels of learning and ultimately greater skill at the tasks that lay before us to be accomplished.

Zlatan Ibrahimović + Mediolana > The Daily Telegraph + The Guardian + The Times…

Fresh from another session on the step machine, Mediolana’s CSO had to verify that what he was seeing was not the result of a combination of poor posture and dehydration; however, as the reports rolled in, he had no choice but to credit his eyes with some intelligence. Zlatan Ibrahimović, the Sweden and AC Milan icon, was being hailed as a minor deity by the opinion makers of English football!

One performance – a sublime ninety minutes sporting the red-black shirt of the soccer and cultural asset in the perhaps increasingly tenuous ownership of Silvio Berlusconi – was enough, apparently, to bury a decade of negative appraisals. Ibra, we are told, is now one of the best, if not the best, strikers in the world. The fact that clubs such as Ajax, Internazionale and FC Barcelona – as well as Milan – have all paid out a king’s ransom for Ibrahimović is no longer an anomaly, and his presence in a squad a guarantee that his club will win their domestic league is, we are assured, not the stuff of coincidence.

What next? What will be the next piece of nonsensical, incredible dogma to be vanquished, with Damascene conversions aplenty ensuing? Could it involve something from the world of economics? Or is that hoping for far too much?