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Italy: Key Issues and Policies

image of Italy: Key Issues and Policies

This review underlines some important points of strength with respect to Italian SMEs and entrepreneurship, notably for medium-sized firms that very often excel in their market niches, have a strong propensity to business collaboration, as well as favourable access to finance. The review also looks at the challenges that lie ahead for Italy, hard hit by the global economic crisis, notably among micro and small firms. Recovery will mean, among other things, removing barriers to business growth, streamlining the complexity of the Italian tax system, and opening the business environment to competition, foreign direct investment and equity financing, as well as improving training and workforce skills.

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Foreword

Small and medium-sized enterprises (SMEs) and entrepreneurs are major drivers of innovation, economic growth and job creation, and play a critical role in social cohesion. They are essential to the Italian economy. This review underlines some important points of strength with respect to Italian SMEs and entrepreneurship. Italy can be characterised as an SME economy, with very large numbers of SMEs and entrepreneurs. Italian medium-sized firms very often excel in their market niches and, on aggregate, their productivity exceeds that of their peers in countries such as Germany and France. Italian SMEs have a strong propensity to business collaboration, as found for example in many world class industrial clusters. The Italian business environment is also favourable to business start-ups. The time needed to open a business is shorter than in most other OECD countries. Administrative burdens on firms, especially those of small size, are also low thanks to simplification of rules and procedures during the last 10 years. Important steps have also been taken by the government to help SMEs negotiate the crisis by improving their access to finance; for example the resources of the national credit guarantee fund have been increased and the government has brought forward payments of state commercial arrears to private-sector firms.

English

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