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Innovation, Italian Style
Despite Italy's challenging macroeconomic indicators, such as political instability and low fertility rates, the country remains a hub of innovation and dynamic businesses.
‘… apart from the sanitation, the medicine, the education, wine, public order, irrigation, roads, a freshwater system, public health, what have the Romans ever done for us?’.
Thus speaks a character in Monty Python’s Life of Brian (1979), set in 1st century AD Judea.
Two thousand years later, it is still easy to underestimate the innovation to be found within Italy. The top constituents of the Borsa Italiana include banks or state-owned utilities, as well as heritage brands like Campari and Ferrari.
Nor does the long-term outlook for Italy appear bright on paper. Its political system is characterised by intermittent chaos,1 and its fertility rate of 1.21 is lower than that of Japan.2
Yet we seek to invest in companies, not countries. Macro indicators can and often do belie the dynamism within people and businesses. A recent trip to Milan served as a good reminder of this.
Brembo: innovating in automotive braking systems
One company we met, Brembo, has designed braking components for passenger cars and motorbikes since 1961, and continue to innovate; their new green brake disc can reduce emissions by as much as 80% relative to a standard disc.3 On their 60th anniversary, Brembo announced a revolutionary electric braking system, SENSIFY, which incorporates artificial intelligence to maximise the use of data in improving braking time, speed, and energy use.4
Diasorin: pioneering diagnostic tests
Italy’s automotive heritage was the genesis of another company we visited. Founded in 1956 as an offshoot of Fiat and chemicals company Montecatini, Diasorin produces specialty diagnostic tests for use in hospitals, labs and point-of-care systems.
From its HQ among the rice-fields of Saluggia, CEO Carlo Rosa has overseen the nimble development of emergency tests for swine flu in 2009, Zika in 2016, COVID in 2020 and MPox in 2022. Similarly, Diasorin’s MeMed solution helps clinicians distinguish between bacterial and viral infections within 35 minutes.5 This innovation aims to reduce unnecessary antibiotic use amidst the danger of antimicrobial resistance.
Technoprobe: advancing semiconductor testing
Finally, an Italian company that received one of TSMC’s 2024 Outstanding Supplier Awards:6 Technoprobe. Founded in his kitchen in 1996 by Dr Giuseppe Crippa, Technoprobe works with semiconductor designers to create specialised probe cards. These cards, which can feature up to 70,000 needles hammered into custom-printed ceramic plates, are used to test chips during the production process. More complex chips require more complex probe cards; in this way, Technoprobe helps sustain future semiconductor innovation.
A few days in Milan reaffirmed our conviction that investing opportunities can be found beneath and behind headline macroeconomic data; that heritage and innovation are by no means mutually exclusive.
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