Italy - Advanced ManufacturingItaly - Advanced Manufacturing
Italy is the second largest manufacturer in Europe with extraordinary know-how in strategic sectors such as machinery, fashion, foodstuffs, automotive and pharmaceuticals. Manufacturing accounts for 23.6% of Italy’s GDP. In recent years there has been growing interest in advanced manufacturing, also known as “Industria 4.0” in Italian. However, it is important to note that while advanced manufacturing encompasses all innovative technologies which improve production and reduce inputs in manufacturing, the English term “Industry 4.0” refers specifically to the digitization of manufacturing processes, often referred to as the “Industrial Internet of Things”. When addressing “Industria 4.0” issues, Italian stakeholders are in fact focusing on a variety of advanced manufacturing technologies, including Internet of Things; additive manufacturing; cloud computing; robots and advanced machine tools; digital industry; cyber security and others.
A recent survey found that over 64% of Italian metalworking and machinery companies are now actively applying at least one of the advanced manufacturing technologies mentioned above in their production processes. These companies tend to have a series of distinguishing features: a high level of digitization, a significant number of university graduates, above-average investment in research and development and a stronger focus on the quality, innovation and customization of products and services. However, there are still a number of Italian firms refraining from adopting advanced manufacturing technologies.
A recent estimate by Accenture found that 82% of Italian entrepreneurs firmly believe that automation is critical to radically transforming the Italian manufacturing landscape, composed mostly by SMEs employing obsolete machine tools. Adopting advanced manufacturing technologies could solve the two main challenges that Italian manufacturers are facing:
The average age of the machine tools installed in Italian machinery and metalworking companies is 13 years, with large discrepancies among highly advanced manufacturers and many more who have not upgraded their technologies and are losing market share.
There is a need for Italian manufacturers of machine tools to increase the connectivity of these machines. By incorporating more sensors they will be able to receive data on the actual end use of the machine to better understand client and maintenance needs, leading to the improvement in productivity and quality.
The advanced manufacturing technologies with the best chances of success in Italy fall within scope of the Italian national Government (GOI)’s advanced manufacturing plan, known as “Piano Nazionale Industria 4.0”. This plan is the latest among those developed by large European manufacturing countries and is considered by many to be the most advanced and comprehensive. The plan consists of $15 billion in tax breaks for investments by Italian companies by the middle of 2018, to reach $22.6 billion with additional resources throughout the 2017-2020 timeframe. This strategy is aimed at “triggering” private investments worth $26.5 billion. Among the main features of the plan are tax breaks for the purchase of capital goods, with higher incentives for the acquisition of machinery containing sensors or data transmission software. The latter technologies are typically more expensive and would normally be procured by the builder of the machine tools, as opposed to the end user of it. The plan also includes subsidized loans for machinery purchases (i.e. the “Nuova Sabatini” program) and increases in tax incentives from $5.5 to $22.2 million per company for businesses investing in research and development and innovation. The complete list of technologies that can receive incentives is listed in attachments A and B to Italy’s 2017 budget law (Italian only).
Below is a summary of the technologies eligible for incentives. Opportunities exist for U.S. firms that can provide these types of technologies to the Italian market.
Advanced Manufacturing Solutions: autonomous, cooperating industrial robots with numerous integrated sensors and standardized interfaces
Additive Manufacturing: 3D printing, particularly for spare parts and prototypes; decentralized 3D facilities to reduce transport distances and inventory
Augmented Reality: augmented reality for maintenance, logistics, and SOP; display of supporting information, e.g., through glasses
Simulation: simulation of value networks; optimization based on real-time data from intelligent systems
Horizontal/Vertical Integration: cross-company data integration based on data transfer standards; precondition for a fully automated value chain (from supplier to customer, from management to shop floor)
Industrial Internet: network of machines and products; multidirectional communication between networked objects
Cloud: management of huge data volumes in open systems; real-time communication for production systems
Cyber-security: operation in networks and open systems; high level of networking between intelligent machines, products, and systems
Big Data and Analytics: full evaluation of available data (e.g., from ERP, SCM, MES, CRM, and machine data); real-time decision-making support and optimization
Analysts predict that Italians will increase investments in machinery and equipment by 3.2% in 2017 and 3.4% in 2018. As of the end of the first quarter of 2017 there were no official statistics yet on the number of super- and hyper-amortization requests received by the Italian government; however UCIMU, the association of Italian machine tools manufacturers, projects a 10% increase in sales of such machines in Italy in 2017. Domestic sales of machine tools increased by 22.2% between January and March 2017. Moreover, overall confidence on the part of Italian capital goods manufacturers, as measured in March 2017 by Italy’s census bureau, reached its highest value in nine years. Italian media relate this directly to optimism about the success of the GOI’s advanced manufacturing plan.
The Innovation Alliance: May 29-June 1, 2018, Milan. Processing and packaging machinery, plastics, printing, logistics.
BI-MU: September 10-13, 2018, Milan. Machine tools, robots, automation.
Key English language websites:
Italian Ministry of Economic Development document outlining Advanced Manufacturing
Plan in English
Fabbrica Intelligente (Italian National Technology Cluster on “Intelligent Factories”)
U.S. Commercial Service Contacts:
Federico Bevini, Commercial Specialist
U.S. Commercial Service, U.S. Consulate Milan
Tel: +39 026268 8520
Italy Equipment and Machinery Trade Development and Promotion