Italy: Crisis fatal for small businesses
5 April 2012
Since the crisis began in 2008 at least fifty artisans and business owners have committed suicide in the region that was the engine of Italy’s economic miracle of the 1990s. Those who have been unable to adapt to new circumstances have seen the collapse of the model that built a prosperity they thought would never end.
Laura Tamiozzo's eyes are glued to the laptop screen, and her voice, soft but determined, resonates in the parish hall of the San Sebastiano Centre. in Vigonza, a village near Padua. Behind her is a poster of the FILCA-CISL union (Veneto), which has organised the public meeting.
The poster shows rows of graves and 25 names of long-established companies that have closed their doors, amid general indifference. “Dear Flavia, it has not been easy for me to write this letter, but I wanted to tell you that the tragedy that struck your family is also the one that hit my own.”
Laura Tiamozzo reads out the letter that she sent on Jan. 22 to Flavia Schiavon, 35, who is sitting next to her. The Great Crisis took away their fathers. Both were building contractors, and both committed suicide.
Giovanni Schiavon shot himself in the head in his office on December 12. The case caused a stir because, while Schiavon was certainly himself in debt, the state owed him 250,000 euros. Antonio Tamiozzo, meanwhile, hanged himself on the night of January 1 in one of the warehouses of his company, which employed more than thirty people. Daniele Marini, director of the Northeast Foundation, explains that while it is “difficult to draw up a typical profile of these business leaders”, one can nonetheless identify some shared characteristics.
The first is the small if not miniscule size of their businesses, which mostly operate in established sectors such as construction, small crafts and others. A second is that, in a system in which a SME in Italy’s Northeast relies on an average of 274 suppliers, which typically are responsible for 80 percent of the finished product, all the SMEs are closely tied to each other.
Declaring bankruptcy is considered shameful
According to figures from CGIA [the union of SMEs and craftsmen] of Mestre, at least 50 small Veneto contractors or artisans have taken their lives since the crisis began. “Sharing a job is sharing life itself,” explains writer and journalist Ferdinando Camon. “When the company is in crisis, the boss suffers terribly from not being able to pay his employees and from watching them tighten their belts. This is what’s behind a lot of these suicides: in the culture of the working communities of the Northeast, having to lay off employees, closing the firm down and declaring bankruptcy is considered a disgrace, and a breach of the social responsibilities of the head of the company.”
It is not unlikely, says Camon, that some suicides “more or less express a conscious desire to declare the debtor – the State, in other words – an assassin, the one responsible for the death.”
Anger is mounting, and relationships with the political world seem to have been damaged irreparably. After Tangentopoli [the great anti-corruption investigation that raked over the political class in the 1990s], in fact, the economy and society of Veneto thought they would grow much better without the restraint of “institutions”.
The distrust of the state was entirely mutual: “The Northeast is a mysterious jungle. Rome does not see into it. Or if she does see into it, she does not understand it.”
Lonely, isolated and misunderstood
One of the few certainties is that these Veneto entrepreneurs feel lonely, isolated, abandoned, and misunderstood. At the Vigonza meeting, it was decided to create an association of families of victims of the crisis. As for the various professional associations, they are trying to respond to urgent needs. In late February, the Confartigianato d’Asolo et Montebelluna (association of artisans of Asolo and Montebelluna) inaugurated Life Auxilium, a psychological counselling service for entrepreneurs in distress, giving them a freephone number (which gets an average of one call per day) and the services of a support centre.
Are these suicides the macabre consequence of the exhaustion of a “model”? Not necessarily. In reality, the “locomotive of Italy” – a region brimming with energy, scene of a wild and spontaneous explosion of businesses of all kinds – had started to slow down around the year 2000.
It was then that “the development of the Northeast, as we know it began to 'finish up', because the factors behind this tremendous momentum had reached their limits,” wrote one of the authors of Innovatori di confine. I percorsi del nuovo Nord Est [“Innovators on the border. The routes of the new Northeast”] a collective work published by Marsilio in 2012 and edited by Daniele Marini.
“The availability of labour has given way to demographic stagnation, a dearth of local workers; these businesses that have been under family management for many years have always had trouble passing them down to future generations, and the region’s countryside, which is urbanising but still has open spaces, is gradually becoming saturated in terms of available space and infrastructure. All these favourable factors, which had boosted the economy of the Northeast and brought prosperity, had run up against their limits.”
Stefano Zanatta, president of Confartigianato Montebelluna-Asolo, is on the same wavelength: “The crisis has shown up the weaknesses of the system. It is still highly fragmented, thanks to small and very small enterprises. At the beginning that was a trump card, as the engine was turning over fine, and it generated wealth and full employment. But now, with four years of crisis, we can no longer cope with a system that is bigger than us.”
Work is the be-all and end-all
The figures from Movimpresa for 2006-2010 make it clear that the balance between new listings and firms going out of business in the Northeast is negative: 6,023 SMEs have vanished. For Daniele Marini, however, a small business is not necessarily fated to close its doors or to be shoved aside by the markets.
It also has to be able to make an “evolutionary leap” in technology innovation, in organising production and services, and it must be able to establish “commercial and production relations with larger companies that are internationalised.”
Despite the great transformations of the last twenty years, the company's Northeast continues to be strongly oriented towards work, where everyone – business leaders and employees – regardless of social background, generation or group, base their identity on their work. And work is also the main concern of the population – particularly now.
In 1996 the sociologist Ilvo Diamanti [a specialist in the Northeast] warned that “work has become the new religion. [...] I fear we are going to be in for some big problems, and not just economic ones. Because if work is the be-all and end-all, if it is economic success that brings satisfaction, the day when development slows down will bring not only economic but also psychological repercussions.”
“Culture and happiness count for nothing. The money – the schei, as it is called here – is everything,” says Ferdinando Camon. “The small business owner is not just living through a debt crisis: he’s living through a total crisis. A crisis of nerve, a moral crisis, a mental crisis. That's why he commits suicide. Because the schei is his only value, and if his life doesn’t have enough of it, he thinks it’s no longer worth living. The schei is the absolute value.”