The Geoeconomics/Politics of Italy’s Investment Promotion Community

ABSTRACT

Through an historical analysis, this article discusses outward investments promotion as an underexplored aspect of geoeconomics. The empirical focus is on Italy’s institutional support to the internationalization of firms from 1992 to 2015, between the post-socialist transformation of Central and Eastern Europe and the years following the global crisis of 2008. The main argument is that large geopolitical events led to complex interactions between Italy’s firms and policymakers. These interactions reshaped Italy’s geo-economic strategies as well as territorialities. The article identifies the emergence and consolidation of a group of public, semi-public and private actors, thus building a new model of an investment promotion community (IPC). It finds that (a) the IPC emerged to provide an institutional infrastructure necessary to project Italy’s sovereignty beyond national boundaries and (b) in so doing, the elites involved interpreted firms’ needs within broader political issues. Thus, the emergence of the IPC represents a shift from geopolitics to geoeconomics.

Acknowledgments

The authors thank Alun Jones (University College Dublin) and Adrian Smith (Queen Mary University of London) for their comments to earlier versions of the manuscript.

Funding

Funding was provided by a Faculty Travel Support grant, Office of Research and Sponsored Programs (ORSP), University of Mississippi, and Student Travel Grant, Department of Geography, University of North Carolina at Chapel Hill.

Notes

1. The first of these definitions has a narrower focus on FDI promoter, the second a broader focus on consultancies lobbying for the alignment of laws with the interest of transnational capital. See Jan Drahokoupil, ‘The Investment-Promotion Machines: The Politics of Foreign Direct Investment Promotion in Central and Eastern Europe’, Europe-Asia Studies 60/2 (2008) pp. 197–225; Jan Drahokoupil, Globalization and the State in Central and Eastern Europe: The Politics of Foreign Direct Investment (London: Routledge 2009).

2. List of actors elaborated by Nicholas Phelps and Andi Wood, ‘Lost in Translation? Local Interests, Global Actors and Inward Investment Regimes,’ Journal of Economic Geography 6/4 (2006) pp. 493–515. The notion of IPC is elaborated by Christian Sellar and Rudolf Pástor, ‘Mutating Neoliberalism: The Promotion of Italian Investors in Slovakia before and after the Global Financial Crisis’, International Journal of Urban and Regional Research 39/2 (2015) pp. 342–60.

3. Nicholas A. Phelps, ‘Gaining from Globalization? State Extraterritoriality and Domestic Economic Impacts—The Case of Singapore’, Economic Geography 83/4 (2007) pp. 371–93.

4. Edward N. Luttwak, ‘From Geopolitics to Geo-Economics: Logic of Conflict, Grammar of Commerce’, The National Interest 20 (1990) pp. 17–23; Matthew Sparke, ‘From Geopolitics to Geoeconomics: Transnational State Effects in the Borderlands’, Geopolitics 3/2 (1998) pp. 62–98; Adrian Smith, ‘Imagining Geographies of the “New Europe”: Geo-Economic Power and the New European Architecture of Integration’, Political Geography 21/5 (2002) pp. 647–70; Deborah Cowen and Neil Smith, ‘After Geopolitics? From the Geopolitical Social to Geoeconomics’, Antipode 41/1 (2009) pp. 22–48.

5. Matthew Sparke, ‘Geopolitical Fears, Geoeconomic Hopes, and the Responsibilities of Geography’, Annals of the Association of American Geographers 97/2 (2007) pp. 338–49.

6. John Agnew, Globalization and Sovereignty (Lanham: Rowman & Littlefield Publishers 2009); Sami Moisio and Anssi Paasi, ‘From Geopolitical to Geoeconomic? The Changing Political Rationalities of State Space’, Geopolitics 18/2 (2013) pp. 267–83.

7. Both Phelps and Woods (note 2) and Drahokoupil, Globalization and the State (note 1) use this definition of investment promotion.

8. The special issue editorial was Sami Moisio and Anssi Paasi, ‘Beyond State-Centricity: Geopolitics of Changing State Spaces’, Geopolitics 18/2 (2013) pp. 255–66.

9. Moisio and Paasi (note 6).

10. Phelps (note 3). In this work, Phelps documents a case of state-led development strategy articulated around firms’ internationalization. On the other hand, works by Drahokoupil (note 1) describe the work done by public and private IP actors to meet the policy demands of transnational firms, often at the expense of the democratic process.

11. Moisio and Paasi (note 6).

12. Bob Jessop, ‘Institutional Re (turns) and the Strategic-Relational Approach’, Environment and Planning A 33/7 (2001) pp. 1213–36; Bob Jessop, ‘The Strategic Selectivity of the State: Reflections on a Theme of Poulantzas’, Journal of the Hellenic Diaspora 25/1–2 (1999) pp. 41–77.

13. Jessop, ‘Institutional Re (turns)’ (note 12).

14. Ibid.

15. Ibid., p. 263.

16. The special issue editorial is Simon Reid-Henry, ‘The Territorial Trap Fifteen Years On’, Geopolitics 15/4 (2010) pp. 752–6.

17. Valerià Paül and Juan-Manuel Trillo-Santamaría, ‘Discussing the Couto Mixto (Galicia, Spain): Transcending the Territorial Trap Through Borderscapes and Border Poetics Analyses’, Geopolitics 20/1 (2015) pp. 56–78.

18. Cowen and Smith (note 4) p. 25.

19. Luttwak (note 4) p. 18.

20. Sparke (note 5).

21. Cowen and Smith (note 4) pp. 24-5.

22. Antto Vihma, ‘Geoeconomic Analysis and the Limits of Critical Geopolitics: A New Engagement with Edward Luttwak’, Geopolitics (2017).

23. John Morrissey, ‘Geoeconomics in the Long War’, Antipode 49/S1 (2015).

24. Agnew (note 6).

25. Jessop (both articles in note 12).

26. N. Phelps, M. Power, and R. Wanjiru, ‘Learning to Compete: Communities of Investment Promotion Practice in the Spread of Global Neoliberalism’, in Neoliberalization: States, Networks, Peoples (Oxford: Wiley-Blackwell 2007) pp. 83–109.

27. Drahokoupil ‘Investment Promotion Machines’ (note 1).

28. Phelps and Wood (note 2) p. 494.

29. Phelps et al. (note 27).

30. M. Tewdwr-Jones and N. Phelps, ‘Levelling the Uneven Playing Field: Inward Investment, Interregional Rivalry and the Planning System’, Regional Studies 34/5 (2000) pp. 429–40. See also Phelps and Wood (note 2) and Drahokoupil (note 1).

31. M. Chiarvesio, E. Di Maria, and S. Micelli, ‘Strategie E Modelli Di Internazionalizzazione Delle Imprese Distrettuali Italiane [Strategies and Internationalization of Italian Districts Firms]’, Economia E Politica Industriale 3/3 (2006) pp. 1000–28; G. Coro and S. Micelli, I Nuovi Distretti Produttivi: Innovazione Internazionalizzazione E Competitività Dei Territori [The New Productive Districts: Innovational, Internationalization and Territorial Competitiveness] (Venice: Marsilio 2006); Alessia Amighini and Roberta Rabellotti, ‘How Do Italian Footwear Industrial Districts Face Globalization?’, European Planning Studies 14/4 (2006) pp. 485–502.

32. Roberta Rabellotti, Anna Carabelli, and Giovanna Hirsch, ‘Italian Industrial Districts on the Move: Where Are They Going?’, European Planning Studies 17/1 (2009) pp. 19–41.

33. Ibid.

34. Anna Cento Bull, ‘Forced to Respond to Globalization: The Disembeddedness of Italian Industrial Districts and Its Discontents’, in Michel Huysseune (ed.), Contemporary Centrifugal Regionalism: Comparing Flanders and Northern Italy (Brussels: The Royal Flemish Academy of Belgium for Science and the Arts 2011) pp. 95-108.

35. A. Bonomi, Il Capitalismo Molecolare. La Società Al Lavoro Nel Nord Italia [Molecular Capitalism: Society and Work in Northern Italy] (Turin: Einaudi 1997).

36. Marco Capasso, Lucia Cusmano, and Andrea Morrison, ‘The Determinants of Outsourcing and Offshoring Strategies in Industrial Districts: Evidence from Italy’, Regional Studies 47/4 (2013) pp. 465–79.

37. Sellar and Pástor (note 2).

38. Sara Nocentini, ‘Alle origini dell’Istituto nazionale per il commercio estero’ [The Origin of the National Institute for Foreign Trade], Passato e presente 66/1 (2005) pp. 1–24.

39. SACE, La Nostra Storia [Our History], 2017, available at <http://www.sace.it/la-nostra-storia>, accessed 15 May 2017.

40. Michael J. Piore and Charles F. Sabel, The Second Industrial Divide: Possibilities for Prosperity (New York: Basic Books 1984); G. Becattini, ‘Dal “settore” Industriale Al “distretto” Industriale. Alcune Considerazioni Sull’unità D’indagine Dell’economia Industriale [From “Industrial Sectors” to “Industrial Districts”: Reflections upon the Units of Analysis in Industrial Economics]’, Rivista Di Economia Politica E Industriale 1/1 (1979) pp. 7–21.

41. Michael Dunford, ‘Industrial Districts, Magic Circles, and the Restructuring of the Italian Textiles and Clothing Chain’, Economic Geography 82/1 (2006) pp. 27–59.

42. Christian Sellar, ‘Geographical Imaginaries of the “New Europe” and the “East” in a Business Context: The Case of Italian Investors in Slovakia, Romania, and Ukraine’, Journal of Cultural Geography 26/3 (2009) pp. 327–48.

43. Interview with the entrepreneur, consulting firm EDAS, 26 Sep. 2005.

44. Ettore Greco, ‘Alla riscoperta della frontiera orientale: l’Italia, la crisi jugoslava e il dibattito sul trattato di Osimo [The Rediscovery of the Eastern Frontier: Italy, the Yugoslav Crisis, and the Debates about the Osimo Treaty]’, in E. Greco and M. Carnevale (eds.), La guerra in Bosnia: Una tragedia annunciata [The War in Bosnia: A Tragedy Foretold] (Milano: Franco Angeli 1994).

45. Silvio Pons, ‘L’Italia e il Pci nella politica estera dell’Urss di Brežnev’, Studi storici 42/4 (2001) pp. 929–51.

46. M. Chiarvesio, E. Di Maria, and S. Micelli (note 31); Roberta Rabellotti, Anna Carabelli, and Giovanna Hirsch (note 32).

47. Dunford (note 42).

48. Ibid., p. 38.

49. Giancarlo Corò and Mario Volpe, ‘Local Production Systems in Global Value Chains: The Case of Italian Industrial Districts’, 9–10 Nov. 2006, article presented at Global Value Chains Workshop on Industrial Upgrading, Offshore Production, and Labor, Social Science Research Institute Duke University.

50. Interview with the chairman, IC & Partners Group, 10 Oct. 2006.

51. Sellar (note 43).

52. Sellar and Pástor (note 2).

53. Sellar (note 43).

54. Christian Sellar, ‘Europeanizing Timisoara: Neoliberal Reforms, Continuity with the Past, and Unexpected Side Effects’, GeoJournal 78/1 (2013) pp. 1–19.

55. Interview with the Chief China Representative, Consorzio Camerale per l’Internazionalizzazione, 19 Dec. 2013; interview with the Founding President, Informest, 20 June 2014.

56. Sellar (note 43); Nina Bandelj, From Communists to Foreign Capitalists: The Social Foundations of Foreign Direct Investment in Post-Socialist Europe (Princeton: Princeton University Press 2008).

57. Giacomo Becattini, The Caterpillar and the Butterfly: An Exemplary Case of Development in the Italy of the Industrial Districts (Firenze: Felice Le Monnier 2001). Becattini himself, the leading Italian industrial economist that started the school of thought on industrial districts, played an active political role in the communist party to accept small firms as tools of workers emancipation, rather than capitalist exploitation.

58. Interview with the General Secretary, FILTEA-CGIL 10 June 2006.

59. Interview with the CFO, Company Devawrin, Plovdiv, Bulgaria, 18 June 2006.

60. Interview with the CEO, Metamanagement, 25 June 2014.

61. Interview with the Chairman, IC & Partners Group, 19 June 2014.

62. The later adoption of the euro by Latvia (2014) Lithuania (2015) and Estonia (2011) are less relevant, because the Baltic States are not areas of strong presence of Italian firms.

63. John Pickles and Adrian Smith, ‘Delocalization and Persistence in the European Clothing Industry: The Reconfiguration of Trade and Production Networks’, Regional Studies 45/2 (2011) pp. 167–85.

64. See Sellar and Pástor (note 2) for a case study of Italian IPC in Slovakia, that include consultants plans to invest beyond CEE.

65. World Bank, ‘GDP Growth (%)’, World Development Indicators, 2015, available at <http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG/countries/IT?display=graph>, accessed 23 Sep. 2016.

66. Interview with the Lawyer, Zunarelli B&T International Law Firm, Shanghai, 9 Feb. 2015 and Interview with the President, CNA Federmoda / Entrepreneur, RinfrescR.L. 22 June 2015.

67. Ministero dello Sviluppo Economico, ‘Incentivi Commercio Internazionali [incentives to International Trade]’, Incentivi Commercio Internazionale, 2015, available at <http://www.sviluppoeconomico.gov.it/index.php/it/incentivi/commercio-internazionale>, accessed 23 Sep. 2016.

68. Franco Bassanini, ‘Vent’anni di riforme del sistema amministrativo italiano (1990–2010)’, Rassegna Astrid 109 (2010) p. 13.

69. Carlo Pietrobelli and Roberta Rabellotti, ‘The “Marco Polo” Effect: Chinese FDI in Italy’, Chatham House IE Programme Paper: IE PP 2010/04, 2010, available at <https://www.chathamhouse.org/sites/files/chathamhouse/public/Research/International%20Economics/pp0210italy.pdf>, accessed 20 July 2017.

70. Interview (note 61).

71. Ibid.

72. Interview (note 62).

73. Interviews (notes 61 and 62).

74. Interview with the Head of Business Services, Informest Consulting, 23 June 2014.

75. Agnew (note 6) p. 438.

76. Ulrich Beck and Edgar Grande, Cosmopolitan Europe (Cambridge: Polity 2007).

77. Tu Lan, Christian Sellar, and Shuang Cheng. ‘The Transnational Investment Promotion Community between Italy and China: An Example of Post Washington Consensus Neoliberalism, J-Reading Journal of Research and Didactics in Geography 1/2 (2016) pp. 35–49.

78. Ibid.

79. Interview with the Founding President, Informest, 20 June 2014.

80. Interview with the former Vice president, Informest, 31 July 2014.

81. Beck and Grande (note 77); Agnew (note 6).

82. European Parliament, The PHARE Programme and the Enlargement of the European Union, Briefing 33, 4 Dec. 1998, available at <http://www.europarl.europa.eu/enlargement/briefings/33a1_en.htm>, accessed 28 June 2017. ‘PHARE was launched as a specific EC programme, initiated by Council Regulation No. 3906/89. Its budget was established by the European Union’s budgetary authorities - the European Parliament and the Council of the EU. The responsible authority for the ongoing management of PHARE funds is the European Commission. Implementation of PHARE is largely decentralized to the recipient countries, and is becoming more so as countries develop the systems to manage the programme. Within each country there is a National Coordinator, usually a minister, who supervises PHARE through planning, programming and implementation. The start-up and management of the programme is handled by Programme Management Units (PMUs), usually run by local civil servants from the relevant ministries, and other implementing agencies. The PMUs are the driving force of PHARE on the ground. They are involved in the preparation, implementation and monitoring of PHARE projects, and are also responsible for launching tenders for supplies and services.’ (p. 1). See also Bertin Martens, ‘The Performance of the EC Phare Programme as an Instrument for Institutional Reform in the EU Candidate Member-States’, 4th IMAD Conference on Institutions in Transition (2000).

83. Stefanie Dühr and Vincent Nadin, ‘Europeanization through Transnational Territorial Cooperation? The Case of INTERREG IIIB North-West Europe’, Planning, Practice & Research 22/3 (2007) pp. 373–94.

84. Interview (note 81).

85 Informest Consulting, ‘Azienda’, available at <http://www.informestconsulting.it/it/azienda>, accessed 5 May 2017.

86. Interview (note 75).

87. Moisio and Paasi (note 8); Henry Reid (note 16).

Additional information

Funding

Funding was provided by a Faculty Travel Support grant, Office of Research and Sponsored Programs (ORSP), University of Mississippi, and Student Travel Grant, Department of Geography, University of North Carolina at Chapel Hill.