by Alessandra Cardone
ROME, July 13 (Xinhua) -- Faced with the strong impact of the COVID-19 pandemic, Italy's luxury goods industry appealed for help from domestic and European authorities to become a locomotive of the recovery.
The luxury goods industry is worth around 115 billion euros (130.3 billion U.S. dollars) in Italy, equal to nearly 6.85 percent of its gross domestic product (GDP), according to the latest data by Milan-based Altagamma Foundation.
In the European Union (EU), the industry is worth some 800 billion euros, accounting for about 4 percent of GDP and 10 percent of all exports, and employing about 2 million people, the Altagama data showed.
SHARP LOSSES EXPECTED
Considering its different sectors -- such as fashion, jewelry, automotive, high-end tourism, and lifestyle design -- the industry is expected to lose between 20 percent and 35 percent in turnover at the European level in 2020, according to Altagamma.
The foundation represents 108 high-end Italian cultural and creative firms employing about 602,000 workers, and its forecast was based on the latest Bain-Altagamma luxury market monitor updates and on Altagamma Consensus 2020 report, the latter made in collaboration with 22 global specialized analysts.
The estimated 20-35 percent turnover decrease would be brought about by an expected 20 percent fall in consumption of personal luxury goods on all markets this year, among other factors.
"The range of our estimate is still wide because we deal with different productive sectors, and because there is strong uncertainty around at least two key variables," Altagamma president Matteo Lunelli told Xinhua.
"The first variable concerns how the pandemic will still evolve and the length of the containment measures; the second is the scope of the economic stimuli authorities will be able to deploy at Italian and European levels."
The foundation believed "the strategic relevance of the high-end industry has not been fully acknowledged by Italian and European institutions yet," he said.
RECOMMENDATIONS TO RESTART
In a virtual conference earlier this month, the foundation debated strategies with Italian and EU officials, providing a position paper with 10 specific recommendations.
Besides the top request to be recognized as a strategic industry, recommendations included investing in human capital -- with a specific focus on the need for new handcraft talents -- boosting innovation, reducing current tariffs and fending off new global barriers, and reviving high-end tourism.
These proposals were "aligned with the position of the European Cultural and Creative Industries Alliance (ECCIA)" comprising six national associations (from the UK, Germany, France, Spain, Sweden and Italy), according to Altagamma.
This plan of action, the group said, would help "unleash the industry's enormous potential, which could be one locomotive of Italian and European economy" in the post-COVID-19 phase.
The timing of the position paper was not random. It was specifically chosen to come shortly ahead of the special European Council meeting in Brussels on July 17-18, when member states will negotiate the "Next Generation EU" recovery plan set out by the European Commission in response to the COVID-19.
"The position paper comes at the right time because -- if we succeed in closing a deal at the European Council -- the Commission will be able to receive the national recovery plans from each member state starting from Oct. 15," Italian European Affairs Minister Vincenzo Amendola told the virtual conference.
"Such plans can not be general, they must be based on specific projections of development and GDP growth, and built on concrete sector projects," he explained.
GROOMING NEW TALENTS
Among the recommendations, special relevance was given to educate and train future generations of artisans.
This is for at least two reasons: Italy's high youth unemployment -- at 23.5 percent in May, according to latest provisional data by the National Institute of Statistics (ISTAT) -- and its long traditions of high-quality craftsmanship, which is at the base of the luxury goods industry.
"Our industry relies heavily on what we call 'the talent of the hand skills,' which manifests through many jobs, such as tailor, woodworker, or oenologist... " Lunelli explained.
"It is not only a matter of improving education, but also of inspiring young people's vocation, so that a new generation inheriting Italy's artisan traditions can be born." (1 euro = 1.13 U.S. dollars)
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