Those who overlook Umbria are missing out on a unique part of Italy, where culture sits beside economics, tradition beside industry. Four facets of Umbrian commercial life are of particular interest to those who have grown tired of Tuscany or who prefer to pay lower prices for investments and opportunities of equal quality.

First, there is a population that, while numbering less than a million, has shown a sturdiness and capacity for commerce, albeit on a small scale. This is demonstrated by the large number of small companies, about 88,000, in the area.

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Vinicio Bottacchiari, the general director of Sviluppumbria, Umbria’s regional development agency, says: “This network of small and medium-sized enterprises (SMEs) is a training school for professionally qualified managers and employees.”

Second, Umbria has an attractive natural and cultural landscape, which has long been respected and admired by visitors and tourists – not least by Romantic poets and writers – but whose commercial scope has been little explored. The opportunity to open Umbria up to a wider niche of international visitors is tantalising. Chiara Dall’Aglio, Sviluppumbria’s executive responsible for tourism, says: “Our competitive edge is our cultural heritage. We aim to attract investment. We have a unique advantage.”

Sector balance

Third, Umbria boasts of harmonious relationships between workforce, employers and local authorities, which is not always matched elsewhere in Italy. “The development of the area of Umbria has been well balanced, due to the many small enterprises,” says Mr Bottacchiari. “Firms are spread evenly both in terms of sectors and geography. There is a positive dialogue between economic and cultural activities. Neither one predominates at the expense of the other. The economics of a situation in Umbria respects historical and cultural tradition. The economic and social systems have evolved from agricultural to industrial to a service system without tension and without outside intervention.”

Fourth, Sviluppumbria is unusually supportive and flexible, according to investors. “Umbria can offer a maximum of opportunities. The best investment is one that is compatible to an investment that is already there. You turn an old plant into a new one. The investment must be compatible, or else both plants will fail,” says Mr Bottacchiari.

Sviluppumbria guides investors through the complex process of obtaining grants from the EU, which grades Umbria an Objective 2 area. “We can offer some incentives for enterprises, but the level of grants to any single company, typically an SME, cannot exceed 20% [of the investment]. That must be spent on capital goods,” says Ms Dall’Aglio.

A combination of EU regional funds and structural funds assists companies considering locating to Umbria. For example, the industrial area of Terni was co-financed with such a combination. A number of companies in the Centro MultiMediale, a media centre boasting television studios and allied facilities, were also established with this mix of funding.

“We want companies that are interested in factors other than merely finance. We are competing with other Objective 2 European regions. But we believe we have a better business environment and we are more open to new investments. We are a genuine one-stop-shop for the investor interested in Umbria,” says Ms Dall’Aglio,

Agency input

Where Sviluppumbria participates in the funding of an investment, it may also take a small investment of its own. This is regarded both as a way of protecting the public interest and ensuring it has an input in the firm’s development and management. For example, the agency took a 2% stake in Ansaldo Fuel Cells, when it was established, but as the investment develops and raises new money, it plans to phase out its financial involvement.

This positive landscape has enabled an entrepreneurial sector to flourish in Umbria, though it is largely unsung. These enterprises come from many sectors but one quality binds them: an interest and commitment to the environment. Umbrian firms are not only committed to best practice in protecting the Umbrian region, with its abundance of nature and culture, but also their business goals are typically driven by environmental opportunities. The local culture stimulates larger industrial horizons.

This may explain why the Umbrian commercial and industrial centre of Terni, in the south of the region and not more than an hour from Rome, is home to firms producing, among other things, electric vehicles, advanced fuel cell technology, material extracted from maize for fabricating domestic and other objects, and electronic equipment for controlling the internal environment. These firms are small but many have common interests and work together as a network, sharing the infrastructure – for example, they co-operate in supporting a waste removal system.

Small Umbrian companies also service larger companies by providing specialist production of single parts in a process called flexible specialisation. This enables larger companies to assemble parts centrally.

Educational resource

The University of Perugia, the region’s largest town, with a population of about 170,000, is another resource shared by many of the companies established in Umbria. Its science and engineering departments supply both expertise and the technologists themselves to local companies. Early on, the university acknowledged the importance of tourism to the region when it set up one of the world’s first tourist management courses.

Companies now gravitate to Umbria because of its reputation as an area that seeks to cherish companies with an environmental-orientation. Stefano Rampini, the chief executive and an investor in ZEV (Zero Emission Vehicles), says that his company was enticed to the region in pursuit of the Umbrian brand. “The region’s reputation for excellent production and infrastructure encouraged us to set up this innovative plant here,” he says.

Another investor in ZEV, Welles Guerieri, was confident that the Italian industrial centre of Modena could not match Umbria’s facilities or range of competences. The firm has just started manufacturing a range of electric taxis and buses for use in town centres at its Passignano site in Umbria.

Thriving enterprise

Umbria’s entrepreneurial heart beats at the SME level, where technology ensures that the sector is thriving. But large enterprises, typically producing well-established products, have also found the area conducive to investment. They cite the efficient road system and strategic position at the centre of the country as particular benefits.

Big multinationals, including Nestlé (which owns Perugina, famed for its chocolate), ThyssenKrupp (which owns a massive steelworks at Terni) and refrigeration company ISA, have plants in the region. In all, 36 multinational companies are located in Umbria, of which 30 developed their presence there after acquiring companies in the region.

Umbria’s industrial core is largely centred on the city of Terni, but many smaller facilities are scattered across the region.

Tourist trade

Hotels and other accommodation, including the area’s noted agriturismo (farmhouse holiday accommodation) sector, occupy attractive and unspoiled sites. Parrano, for example, has a small hotel situated at the crest of a hill with a panoramic view. Guests include celebrities, who enjoy not just the view but wine and olive oil, made with home-grown ingredients.

The owner of the Hotel Vanucci (named after Umbria’s most famous mediaeval painter), at Citta della Pieve on the Tuscan border, perceives a demand for quality and traditional accommodation from visitors from the larger Italian cities and abroad. These visitors are just outside the wealthy bracket that might be attracted to Tuscany. Alison Deighton has refurbished the hundred-year-old building which has 30 bedrooms, and she will introduce elements of modernity, such as a bar with live music.

“Umbrians have not got fed up with tourism, like their Tuscan neighbours. They are gracious and will bend over backwards to help a foreigner doing a development. On the other hand, they know they have a wonderful lifestyle and they will resist any changes that may seem to unsettle that,” says Ms Deighton.

Natural resources

An Umbrian resource that has not been developed and to which tourists will gravitate in coming years is the hot water springs, which have the potential to form the focal point of leisure or health centres. Sviluppumbria wants to attract development of this resource and has pinpointed five locations where it believes spas might be built. The site at Parrano, for example, will offer a public bath filled with local hot water drawn from a spring and a scenic hill-top location in a classic, unspoilt Umbrian village. Parrano’s waterfall is a little-known spectacle of the region.

A further resource is the stock of mediaeval buildings, which Sviluppumbria says can serve as attractive development opportunities for hotel owners and investors interested in other sectors. These buildings, and even complete villages or small towns, are typically owned by the state, the region or the church. Many require refurbishment.

One such location is Pischiello, a small mediaeval village near Passignano sul Trasimeno, in the Province of Perugia. Initially, it was perceived as a possible home for a Disney leisure resort but when discussions with the giant US corporation fell through, Sviluppumbria turned to a group of Italian investors involved in the research, development and manufacture of parts for Formula One motor cars. The discussions bore fruit and the site has been converted into a residential research centre for high-powered technicians working on state-of-the-art clutches for racing cars.

Pischiello will also house health and fitness facilities and a laboratory. Giancarlo Luigetti, the managing director of Advanced Researches and Technologies, says: “The quality of life available in Pischiello enhances our work and efficiency. Umbria is the perfect setting for this form of refurbishment.”

According to Ms Dall’Aglio: “This is a good example of using our cultural heritage in a productive way. The versatility of disused buildings in the region is considerable and needs to be seen to be believed.”

Added value

The cultural harmony between a mediaeval Umbrian building and a traditional local product was also spotted by Brunello Cucinelli, whose cashmere-making concern is world famous. Mr Cucinelli spotted a small village called Solomeo, 15km from Perugia and converted it into his workshop.

“Lifestyle and cultural richness provide added value for Umbrian businesses involved in the manufacture of traditional local products. The fusion between production, landscape and region is a key element in the Umbrian package,” says Ms Dall’Aglio.

Another Umbrian icon is Roberto Menchetti, a fashion and textiles designer. He had the vision that led to the renewal of traditional British clothing company Burberry from his home and studio in Gubbio. He has spoken frequently of the “creative flow that runs in Umbria’s soil”.

The characteristics of an Umbrian investment are not merely style and culture. They are also quality. The region boasts the highest percentage of companies that have been awarded with the ISO9000 mark of quality. Many local companies also have the SA8000 stamp of social accountability, a qualification that meets with considerable approval from Sviluppumbria.

Cultural appeal

Umbria’s cultural tradition is likely to appeal to the more sophisticated visitor, rather than those seeking, in Mr Bottacchiari’s words, “sun, pizza, pasta and the dolce vita”. He says: “We stress the cultural environment. You can make microchips anywhere in the world but you can only find the basilica of St Francis of Assisi here.” Assisi is a small, historic town to the east of Perugia.

Umbria’s relaxed environment attracts executives to make their home there as well as retired people who move into the small Umbrian towns, such as Todi to the south of Perugia and Gubbio to the north.

Umbria preserves the best of the old, like its reputable gastronomy, its wines from Orvieto and its textile design, while also seeking to stimulate and financially reward those able to engage in the most advanced thinking about production geared to the preservation of the environment.