Table of Contents

Table of Contents

Introduction...........................................................3

The Economy.........................................................3

The Government...................................................4

Education...............................................................5

Culture and Value Systems.................................6

Business Practices...............................................7

Conclusion and Recommendation....................8

Work Cited............................................................10

Introduction

Located in Southern Europe, Italy, including Sardina and Sicily extends into the Mediterranean Sea in the shape of a boot (Martin).

Italy boasts one of the highest density populations in Europe consisting of 98% Italians. The remaining 2% consists of German, French, Slovene-Italians and Albanian-Italians. The major religion in the country is Catholicism but other faiths are practiced (Gioseffi).

This report will look at the feasibility of expanding business into Italy. We will look at the economy, the government, education, culture and value systems, and business practices. Good introduction!

The Economy

The economy in Italy is agriculture-based in the south and industry-based in the north. The Gross Domestic Product (GDP) per capita (capital) is $32,022 of which two thirds comes from the service sector and the remaining one-third from industry (Martin).

Italy has few natural resources. It is a net food importer due to much of the land being unsuitable for farming. More than 80% of the country's energy sources and most raw materials for manufacturing are imported. Italy's economic strength, primarily in small and medium-sized family-owned firms, is in the processing and manufacturing of goods. Major industries include "precision machinery, motor vehicles, chemicals, pharmaceuticals, electric goods and fashion and clothing" (Background Note).

Italy was the United States' twelfth-largest trading partner in 2008..." Important U.S. exports to Italy are machinery and aircraft (Background Note).

"Major U.S. exports to Italy include agricultural, wood, steel and iron products; precious metals; coal and fuel oil; chemicals; plastics; leather and furs; mineral supplies; generators; industrial engines; metal working instruments; aircraft; vehicles and parts; boats and motors; toys; jewelry; art; and military goods" (Martin).

A high rate of unemployment, corruption and organized crimes are the major economic problems. Other problems include the disparity between the north and the south. The north is resentful due to the high taxes imposed to support projects in the south. The south is resentful of the affluence of those in the north (Martin).

There is a current movement to split Italy into three independent states; northern, central and southern. It is believed that central Italy (Tuscany and Lazio) is where the government corruption is seated. In the meantime, attempts are being made to cut spending to reduce the national debt, inflation and unemployment rate (Gioseffi).

The CIA World Factbook estimates the inflation rate (consumer prices) from 2007 to 2008 at 3.4% and 2008 to 2009 at .8%. The 2009 estimated unemployment rate was 7.7% placing Italy at the 79 highest country for unemployment. Note: The US with a rate of 9.3% rate (2009 estimate) ranked 111 out of 200 countries (CIA). Very helpful information throughout this section.

The Government

As head of state, the President represents Italy in its international relations and serves as commander in chief of the armed forces. There are two chambers of the Italian parliament, along with three delegates from each of Italy's regions. The term of presidency is seven years. The president is elected by a two-thirds majority in the first or second round. Majority is required in any additional rounds (Background Notes).

The current chief of state is President Giorgia Napalatano. The head of government, Prime Minister Silvio Berlusconi was elected in on May 2, 2008. The prime minister is referred to as the president of the Council of Ministers (CIA).

"[The] president [is] elected by an electoral college consisting of both

Houses of parliament and 58 regional representatives for a seven-year term (no

term limits); election last held on 10 May 2006 (next to be held in May 2013);

Prime minister appointed by the president and confirmed by parliament." (CIA) Good and helpful knowledge.

Education

Italy has state financed educational institutions that they believe are superior to public and even private, schools anywhere in the West, especially the elementary, middle and high school levels (Gioseffi).

Latin is taught at an early age and students receive comprehensive exposure to literature and the humanities. Italians are highly educated due to chronic unemployment. When people can't find work, they go back to school to get another degree while living at home with their families. Attendance at school is mandatory through the eighth grade. Then only students that pass rigorous qualification exams go on to high school for five years. Those students that pass maturity exams after that will go on to college (Gioseffi).

Specialty graduate schools are new to Italy, especially MBA programs. "Students specialize at the undergraduate level and get a college or university-level liberal arts education in high school (this seems confusing that students will get a college degree while in high school...)." To make its graduates more competitive internationally, Italy, is attempting to "harmonize" its education and degrees with the Anglo-American model (Bachelor, Masters, Doctorate). The brightest, and wealthiest, will then go abroad for graduate and doctorate degrees (Gioseffi).

"Almost every