The strange war between industry and artisans: views from Lombardy

There is no shortage of critical voices (even within the majority), who whisper: “To reform the world of craft trades, one need only focus on quality and the nature of the work, rather than on the number of workers”. But as we know, the legislator is not always enlightened. And so the draft framework law intended to reform the craft sector may alter the balance of representation. Currently, in Lombardy, 70 per cent of manufacturing firms have fewer than 50 employees. Looking at the manufacturing sector as a whole, this figure rises to 95 per cent. The most contentious aspects of the reform (which is still being finalised) concern the number of employees in craft firms, which – subject to certain distinctions – could be set at 50.

In Lombardy, there are approximately 815,000 active businesses, of which 230,000 are craft businesses and 154,500 operate in the retail sector. Businesses with fewer than 50 employees (micro and small enterprises) account for around 95 per cent of the total, forming a cornerstone of the region’s economic fabric. In Lombardy, the number of businesses with fewer than 50 employees is estimated at over 770,000. The reform currently being considered by the government could blur the line between small businesses (many of which are members of Confindustria) and craft businesses, which are currently restricted to a lower employee threshold. Although no change to employees’ employment contracts is envisaged, this is why business associations are speaking out.

Giuseppe Pasini, president of Confindustria Lombardia, gets straight to the point: “The reform of the craft sector proposed by the government risks being a genuine encroachment: it confuses the craft sector with small businesses and introduces a more favourable regime for a specific size category, thereby undermining a fundamental principle – that of equal market conditions. We cannot accept that, in an attempt to support business growth, we end up distorting competition. The distorting effects are likely to be very real: from wage dumping – with a labour cost differential that could reach up to 18 per cent – to the possibility that craft businesses with the same number of employees might benefit from more favourable conditions than industrial firms when participating in public tenders”. He continues: “We call on the government to change its approach: rather than introducing new asymmetries between businesses, it should use the forthcoming Budget Bill to launch a genuine industrial policy. Strong fiscal measures are needed to encourage mergers, investment, capitalisation and processes of scaling up.”

Eugenio Massetti, president of Confartigianato Imprese Lombardia, seems, on the other hand, convinced of the path taken by the government. What is his view of the framework law on craft businesses? “Europe defines a small business as one with between 10 and 49 employees. Beyond that, each country has its own regulations, but if we wish to align ourselves with the larger entity of which we form part, these are the figures. The real issues, apart from the question of staff numbers, are two that are rarely mentioned in the current debate. Whenever there is an economic problem in our country, the blame is laid at the door of small businesses, of ‘small-scale’ enterprises. If ‘small’ is no longer as attractive as it once was, then let us give businesses the right tools to compete: the first issue is the lack of credit. Banks no longer grant us loans for investment, while large companies have ready access to funding. The other major issue is energy costs, which small businesses pay more for than energy-intensive industrial firms. Something isn’t working; we need to compete on a level playing field: if we’re small, we must have the space to grow. They’re preventing us from growing, whilst artisans should be allowed to pursue their legitimate aspiration to compete. Not to mention the countless petty taxes. Artisans and industrialists are both essential to the country’s growth.”

An energy crisis, faltering growth, high inflation – is this the right time for this reform? “But there will never be a right time. I believe the right moment comes when things are actually done. Perhaps this could be the solution to the problems on the table, enabling even small businesses to be competitive in the markets. A major problem is that, when they reach retirement age, craftspeople close their businesses because it is no longer viable to carry on – there is no longer any profit margin. Our problem is not competition with industrialists; we lack the tools to be competitive. ‘I’ve spoken about credit and the energy gap, but if we also had the chance to operate on a larger scale – including through the law – we would have solved a major problem, and it would benefit everyone,’ concludes Massetti.