(This accompanies a Special Report on why Italy's economy is stuck in reverse reut.rs/1jgAhQH)
By Gavin Jones
SERIANA VALLEY, Italy, July 14 (Reuters) - Italy has fallen behind two groups of rivals in recent years: high-tech, high-end competitors in countries such as Germany and the United States, and low-end producers in places like China, Bangladesh and Turkey.
The best place to see the latter is in Italy’s textile industry. A central driver of the country’s economic growth in the 20th century, Italian fabric manufacturers have struggled since globalisation opened the sector to cheap Asian competition at the end of the 1990s. Though Italy’s fabric industry has improved productivity in recent years, it has not been able to compete on wages.
The result is fewer jobs, lower living standards and abandoned factories, such as a trail of empty shells along the Seriana Valley outside the northern Italian city of Bergamo. The area prospered from textiles for more than a century. Until 20 years ago most locals either built or operated the machines that transformed cotton into thread, or thread into curtains, sheets, towels and clothes.
It had no unemployment and was known as “the Golden Valley” because of the high average income of its famously industrious inhabitants.
Now people are lucky if they can find a job in Bergamo. Children move out of the valley (current population: 130,000) as soon as they can, leaving a dwindling and rapidly ageing local population.
Italy remains the world’s third-largest exporter of clothes and fabrics. But its market share has halved to just 4 percent since 2000, while employment in textiles has fallen every year for 25 years. It is now around 60 percent of what it was in 1990, down 370,000 jobs, according to employers’ association Confindustria. The lower end of the market, which the Seriana Valley specialised in, has been hardest hit. China now exports eight times as much.
The international agreements to dismantle trade barriers in textiles were signed in 1995, but China only signed up in 2001. That meant Seriana Valley had a head start to move up-market or convert its factories to supply machines to the Chinese. Nothing was done.
“In 2002 everyone suddenly woke up and said, ‘Oh God, the Chinese are producing what we produce at half the price,’ like it was a bolt from the blue,” said Eugenio Borella, a local union representative.
Silvano Franchina, a mechanic at Itema, an industrial loom-maker and one of the few surviving companies in the region, has spent half the last seven years at home on reduced pay. Itema had 1,000 workers when he joined 14 years ago. It now has 389.
Franchina speaks with pride as he asks a colleague to switch on the company’s latest model, which he helps produce. He hates the uncertainty these days, he says, but at 44 considers himself lucky to still have a job.
“Now 20-year-olds with much better qualifications than mine can only find temporary work in call-centres,” he shouts as the machine roars into action. (Edited by Simon Robinson and Sara Ledwith)