“It is possible to run a successful business in the South,' the interview with Irem's CEO Giovanni Musso

12 January 2024

"It is possible to run a successful business in the South," the interview with Irem's CEO Giovanni Musso

"To tackle low wages, it is necessary to act more decisively on the tax burden, reducing the contributory part and stabilizing the Irpef system with three brackets. Introducing a minimum wage would not solve the problem. It is better to focus on production bonuses awarded based on productivity, quality, and corporate efficiency. This not only increases remuneration but also improves the working environment and motivates employees."

Giovanni Musso is the CEO of Irem, a company specialized in construction and maintenance of facilities in the Oil & Gas sector. The company is based in Siracusa, has a turnover of 330 million euros and 4 thousand of employees. Recently, it secured the contract for the construction and management of the first renewable hydrogen plant in Sicily, located in Priolo Gargallo. Musso is also actively involved in Confindustria, president of mechanical engineering companies in the area of Siracusa.

What is the 2023 financial result for mechanical engineering companies?
It has been a year of sacrifices, with a decrease in production compared to 2022, mainly due to the growing international tension and the increase in the cost of raw materials, energy and money. As for the current year, despite the reduction in inflation, the economy remains vulnerable, and international trade will continue to suffer, despite an increase in investments in Italy and Europe supported by the Pnrr and Next Generation resources.The mechanical engineering sector can still benefit from these investments, facilitated in Italy by the PNRR revision.

What concern you the most?
The geopolitical risk. Ongoing conflicts in Middle East, Asia and Est Europe could further escalate, leading to boarder destabilization with a significant impact on businesses and, consequently, the economy.

Is the financial maneuver implemented by the government heading in the right direction?
It has been prudent, and this has had a positive effect on financial markets. However, the government's challenge now will be to implement the investments in line with the Pnrr, strengthening the confidence of the investors who buy our debt and consolidating Italy's position in financial markets.

So, the Pnrr will be crucial.
Pnrr represents the lifeline of the Italian economy, driving growth and modernizing the country. Therefore, it is essential to implement it and do so effectively. However, I would emphasize a chapter that I sometimes see overlooked, the RepowerEU, which aims to the modernization and align the country with the new European standards in energy and the environment. It also introduces significant measures such as the reorganization to simplify and make business incentives more effective, a new approach to development and cohesion policies with precise feedback on results, and the creation of a new comprehensive text for procedures related to renewable energy. So, it's not just about investments but also about reforms: two sides of the same coin.

The Pnrr will also serve to accompany the energy transition.
Yes, and it involves a radical transformation in how we generate energy and not just a simple substitution of energy sources. It is important to keep in mind that to achieve the decarbonization and energy transition goals, intervention beyond renewable energy production are needed. This includes the adaptation of network infrastructures, the energy efficiency through digitalization, the sustainable mobility and the development of circular economies. It is an enormous challenge of which Italy must be aware and equipped. It is a mistake to believe that everything can be solved by developing renewable alone. It needs to be done, but it's not enough. There is a complexity that often seems to be overlooked.

Will the future energy be the hydrogen?
Europe has already planned to increase the generation of green hydrogen by one million tons per year and aims to install at least 40 GW of electrolyzers by 2030. Hydrogen will certainly be used in the transport sector, however the main goal is to use it in hard to debate productions, i.e., in sectors with emissions that are more challenging to reduce, such as the steel mills. But it is wrong to believe that the future will be exclusively dominated by hydrogen. The decarbonization will require an energy mix: hydrogen but also wind, solar, geothermal, next-generation nuclear, waste reduction and energy efficiency.

You work in the South. Is it hard to run a business in the Southern regions?
There are structural challenges in the southern economy, mainly caused by the lack of infrastructures, insufficient quality of public services provided by both local and state entities, slow and cumbersome burocracy. Despite this, in 2023, Southern businesses proved to be resilient showing a higher inclination for investments compared to 2022 by 4 points. In the year-end budget, the government allocated 1,8 billion for the unique Southern Zes (Special Economic Zone). This measure can represent a significant development opportunity, but only if the necessary infrastructures is implemented to make the areas where investments will take place more accessible. Moreover, swift procedures for obtaining authorizations need to be put in place. Otherwise, the Zes will remain a promising project only on paper. Then, there is a need to develop the skills capable of completing the initiatives.

Is the gap between the job demand and supply too wide?
Even in the South, 50% of positions in companies is vacant because the required profiles are not available in the market. In the past, the limits for growth were the ability to obtain credit and commercial strength; today, it is the lack of competences. To overcome this gap, it is necessary to focus on continuous education, both for young seeking jobs and adults who need to update their skills to align with the company needs. Many companies are establishing Academy in collaboration with employment agencies to retrain their staff through permanent training projects. In addition, special attention is deserved by Its (Higher Technical Institute) that combine class lessons with many hours of internship in companies, in order to immediately apply the competences learned during the lectures. Human resources play a crucial role in this process.

Source: ItaliaOggi