Chapter 25. Italy

Figure 25.1. Structure and performance of the SME sector in Italy
Figure 25.1. Structure and performance of the SME sector in Italy

Sources: Charts A, C, D: OECD Structural and Demographic Business Statistics Database 2018, http://dx.doi.org/10.1787/sdbs-data-en; Chart B: OECD Timely Indicators of Entrepreneurship Database 2018; Chart E: OECD Structural and Demographic Business Statistics Database 2018, Employer Business Demography dataset.

 StatLink http://dx.doi.org/10.1787/888933925274

SME business conditions and access to strategic resources

Institutional and regulatory framework

In recent years, Italy has made progress in opening up markets to competition, although there is still room to address regulatory bottlenecks which curb competition in professional services, lower barriers relating to state controls and improve efficiency of public administration. Italy’s Startup Act, launched in 2012, aims to create a favourable environment for innovative startups, including through “fast-track” and zero cost incorporation and simplified insolvency procedures. In 2018, the OECD evaluation of the Italian Startup Act showed that the policy has a sizable impact on start-up growth. In 2017, a three-year plan for the digital transformation of the public administration establishes a digital development model for enhancing efficiency in central and local administrations.

Market conditions

Export growth has supported Italy’s economic recovery, although less than in past post-crisis periods. SMEs in 2016 accounted for 59% of total international trade. However, their participation in global markets is affected by small scale, low productivity growth and limited integration in global value chains, due also to low inward FDI levels, compared to other large EU economies. A “special plan” (piano straordinario) to promote the “Made in Italy” abroad and attract foreign investments is in place. This includes support to innovative promotion strategies, e-commerce and investment in fixed capital assets and technologies.

Infrastructure

Italy scores close to the OECD average for ICT and logistic infrastructure and is expanding its NGA (Next Generation Access) coverage, with planned investments aiming to reach more people and SMEs, including in rural and underserved areas. On the other hand, Italy scores relatively low on investment and maintenance spending on inland transport. Investments in energy infrastructure are mostly focused on renewable energy sources and energy efficiency, including energy audit obligations for certain SMEs, with financial support provided by central and regional governments.

Access to finance

Against the backdrop of a gradual economic recovery, business loans expanded in 2017-18, but unevenly with a downward trend for smaller firms. Collateral requirements grew slightly, but cost of credit (and payment delays) dropped to the lowest level since the crisis. The Central Guarantee Fund played an important role in expanding access to credit. A new evaluation system of firms’ creditworthiness was introduced in 2018. The 2017 budget created long-term individual savings plans, eligible for tax exemptions, to channel private savings towards financial instruments issued by Italian companies. Also, unlisted SMEs that issue bonds (“minibonds”) benefit from tax reliefs and streamlined procedures. Finally, as of 2017 access to equity crowdfunding has been extended to all SMEs. The same year, equity investors in start-ups and innovative SMEs were eligible to a 30% tax deduction (for up to EUR 1M for individuals and EUR 1.8M for legal entities).

Access to skills

Low skills levels and weak demand for high skills or existing skills have weighted on Italy’s productivity for the past 15 years. Efforts have aimed to strengthen the cooperation between universities and SMEs and ensure that academic curricula better meet the labour market requirements. As part of the 2018 budget law, a pilot 40% tax credit has been introduced for firms that invest in their workforce training on Industry 4.0 technologies. In addition, the largest regional employers’ association, Assolombarda, is leading a pilot programme T.I.M.E (Training Innovation Management Experience) which helps managers identify their skills needs and develop appropriate “skills development programmes”.

Access to innovation assets

The national Industry 4.0 Plan (2016) provides a range of fiscal incentives to invest in innovation (R&D tax credit, patent box, hyper-amortisation for the purchase of connected machinery) and skills and sets up a network of technological hubs, e.g. Digital Innovation Hubs and Competence Centres, to help SMEs seize the opportunities of digital technologies. The first results were promising and marked an overall improvement of firm expenditure in R&D and innovation. In 2017, the Government launched various “awareness” initiatives , mostly directed at SMEs, about the use and potential of new ICT technologies applied to production.

The full country profile is available at https://doi.org/10.1787/34907e9c-en

References

AGID (2018), Infrastrutture | Agenzia per l'Italia digitale, https://www.agid.gov.it/index.php/it (accessed on 24 August 2018).

Italian Government (2019), The Three-Year Plan, https://pianotriennale-ict.italia.it/en/plan/.

Italian Government (2017), Italy's National Plan Impresa 4.0 - Results from 2017 - Actions for 2018, https://www.mise.gov.it/images/stories/documenti/impresa_40_risultati_2017_azioni%202018_rev_eng.pdf.

Italian Government (2017), Italy's Plan - Industry 4.0, http://www.sviluppoeconomico.gov.it/images/stories/documenti/2017_01_16-Industria_40_English.pdf (accessed on 24 August 2018).

Italian Government (n.d.), National Industry 4.0 Plan (Impresa 4.0), Ministry of Economic Development, https://www.mise.gov.it/index.php/en/202-news-english/2036690-national-industry-4-0-plan.

Menon, C., et al. (2018), “The evaluation of the Italian ‘Start-up Act’”, OECD Science, Technology and Industry Policy Papers, No. 54, OECD Publishing, Paris, https://doi.org/10.1787/02ab0eb7-en.

OECD (2019), Economic Survey of Italy - Italy Economic Snapshot, OECD, Paris, http://www.oecd.org/economy/surveys/italy-economic-snapshot/.

OECD (2018), Italy - Economic Forecast Summary (May 2018), http://www.oecd.org/eco/outlook/italy-economic-forecast-summary.htm (accessed on 24 August 2018).

OECD (2017), Skills Strategy Diagnostic Report - Italy, https://www.oecd.org/skills/nationalskillsstrategies/Diagnostic-report-Italy.pdf (accessed on 24 August 2018).

OECD (forthcoming), Economic and Social Implications of the Italian “Start-up act”, https://one.oecd.org/document/DSTI/CIIE(2018)3/en/pdf (accessed on 24 August 2018).

Presidenza del Consiglio dei Ministri (n.d.), The Italian Strategy for Next Generation Access Network, https://www.agid.gov.it/sites/default/files/repository_files/documentazione/next_generation_access_network_-_english_version.pdf.

ReteAgevolazioni (2018), Piano Straordinario Made in Italy, https://www.reteagevolazioni.it/piano-straordinario-made-in-italy/.

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