Dalla sfida all’opportunità: il futuro delle startup italiane

From challenge to opportunity: the future of Italian startups

Published on Mit Sloan Management Review Italy, August/September/October 2025 issue, Year 4- Number 4

“The last will be first”, it is sometimes said quoting theGospelby Matteo and, at least from a macroeconomic point of view, things would seem to go exactly like this. Portugal, Italy, Greece and Spain –four of the five Pigsfrom just over a decade ago (the fifth being Ireland which, however, has its own championship) –seem to be islands of stabilityin a continent where the Franco-German columns visibly sway. And it is understandable that this is the case: rigorous and disciplined budget policy is not only possible – how many have not denied it in the recent past? – but, if practiced with consistency and determination, it pays off. And not only in terms of credibility and reputation on the markets, but also in terribly concrete terms, that is, in terms of the burden of servicing the public debt.

If we push us beyond the perimeter of public finance, however, the similarities between the four Pigs weaken until they almost disappear. From one aspect, in particular: the dynamism of the respective economies. In the years following the financial crisis, Portugal, Italy, Greece and Spain were woefully below the average growth rate of euro area potential output (1.0%). Today,Spain and Portugalare, in this respect, clearly above the euro area. TheGreece– whose starting point was an even negative medium-long term growth rate – has shortened the distances in a way that cannot help but be defined as surprising. TheItalyhas undoubtedly made some steps forward, but does not seem to have achieved, in this field, the results obtained in the management of public finances. We continue to grow, in potential terms, even less than the average of the currency area in which we are located.

We shouldn't be surprised. As often happens, the best picture of our future is the one that demography offers us. Not demographicstout court, but the company demographics, in this case. The dynamism of an economy – its ability to push the frontier ofproduction possibilities– travels on the legs of innovation and this, in turn, takes shape (not exclusively, but to a large extent) in the dynamics of companies. Dynamic market economies are characterized by what we could define as perpetual motion:new companies face the open sea and others abandon the field more or less orderly, new products see the light and others lie on the shelves before ending up forgotten, new production processes are put in place in place of others that have become inefficient, new markets open up almost daily in an economic scenario whose features change incessantly, sometimes gradually and sometimes, however, without warning. That's what we call“creative destruction”: the increases in productivity of the system are linked to a large extent.

In the experience of many countries, the main channel for the introduction of innovations into the system and for the generation of new jobs would appear to benew businesseswhich, despite being characterized by rates of exit from the market higher than average, would be those which, if and when they manage to survive, would presentthe best growth prospects.Conversely, the exit from the market of marginal companies (and therefore characterized by productivity levels lower than those observed for market leaders) would, in turn, contribute to ensuring that there are increases in the average productivity of the system.

The decline in businesses in Italy

Now,in the Italian case, we have gone from 200-250 new businesses per 100 thousand inhabitants in the early 80s of the last century to just over100 new businesses per 100 thousand inhabitants in the second half of the 1910s of the current century. Nonetheless, both the Presidents of the Republic and the Prime Ministers have often referred and often refer to the issue of the decline in birth rates, and in heartfelt tones. There is nothing similar regarding entrepreneurship trends (without adjectives such as 'youthful' or 'female').

Thedecline in entrepreneurial attitudeover the last forty years it has been reflected in atendential decline in the entry or birth rate of businesses(defined as the ratio between the number of new businesses in the given period and the number of businesses in existence at the beginning of the same). In fact, it went from 6-10% in the mid-80s to less than 3% in the early years of the century, and then landedin the last 10 years stable between 1% and 2%. And this in all constituencies, and in largely comparable terms, despite a certain 'decoupling' between southern and insular Italy and the rest of the country being evident. And the same can be said regarding the production sectors. If the topic were cradles, we would talk about zero growth and 'empty cradles', but perhaps we should talk, without pretense, about degrowth and'empty warehouses': in most production sectors, starting from 2008, there has been a significant contraction in the production base. Over the last 30 years, manufacturing companies have shrunk by more than 1.5% per year, by almost 2.5% since 2008 (and without any significant trend reversals in recent years). The trends in the construction or trade industries are slightly less pronounced. Even the service sectors that seemed to grow in the 90s have reversed course in the last decade, without appreciable second thoughts. And ours seems to be one toorelatively solitary degrowth.Net birth rates in other European countries (as calculated by EuroStat) have certainly been affected by the crisis, but have returned to being positive in recent years.

There's more. If we also consider the exit or death rates of companies (defined as the ratio between the number of companies closed in the given period and the number of companies in existence at the beginning of the same) the net birth rate (or net turnover) has been below zero for 20 years now. In other words, if things go well, as many businesses are born as they die every year. And for two decades it hasn't been good at all.

Differently from what happens for demography itself, it is not necessarily the case that zero or negative net business birth rates foreshadow fewer job opportunities in the future or that, above all, they could imply the drying up of innovation channels, influencing future productivity growth rates. And this is simply because a zero or even negative net birth rate can hide significant levels of dynamism in an economy: many businesses that are born and take the place of many businesses that die. What we called "creative destruction". Or, vice versa, they can hide stasis, immobility.

From this perspective, the international comparison is enlightening. The Italian case would seem to belong more to the second than to the first typology. And to an increasing extent. The gross turnover rate (i.e. the sum of the birth and death rates of companies) not only presents reduced values ​​in international comparison, but decreases over time for many sectors. Both industry and services went from around 7% in the twenty years before the crisis to 5-6% in the following decade. On the other hand, in the case ofUnited States, a net turnover rate not that far from zero over the last 30 years hides a significant degree - decreasing, if you like, but still largely higher than the Italian one - of 'shuffling' of the production system. It is hardly worth mentioning thatthe average growth rateof US total factor productivity, in the same period, was more than double compared to the Italian case (1.2% versus 0.5%).

The difference with France

Of course –and we come to the main theme of these lines– not all new businesses are the same. Some are, in fact, more equal than others and are what we now usually call theinnovative startups.What we will be is to some extent written in what we are in this small but significant production sector. And here the comparison that matters is not so much with our cousins ​​on the southern periphery of the euro area, but rather with our cousins ​​beyond the Alps. Of course, in Greece, for example, the high-tech sector, essentially non-existent before the pandemic, now occupies 1-1.5% of gross domestic product and, supported by public support and international venture capital funds, is expected to reach 5% within the current decade. Behind these developments, a newfound entrepreneurial streak: between 2020 and 2024 the number of new business initiatives grew in Greece by around 30% overall and by an even higher amount in sectors other than public services and agriculture. Creative destruction can speak many languages.

What makes the comparison with our French cousins ​​interesting is the fact that we share, or almost, the starting point with them. Just over ten years ago Italy launched the so-calledStartup Act(2012). The following year, France launchedBpiFrance(2013). To date there are, inFrance, approximately20 thousand innovative startupsagainst the14 thousand Italiansbut where the difference emerges in terms that are difficult to overlook is when attention shifts from companies that try to demonstrate the validity of a model ofbusiness(the startups proper) to those which, having passed this stage, are on a growth trend at often extraordinarily high rates (the so-calledscaleup). French startups valued at over a billion euros - the "unicorns", as we now call them - are just under 30. The corresponding Italian companies are only two or three. And to get to six it becomes necessary to move from "unicorns" to so-calledsoonicorn(startups valued between 400 and 800 million euros). Unlike the Italian case, the French panorama is populated by a significant number of highly dynamic startups, capable of employing hundreds and in some cases thousands of employees and operating globally and listing on the stock exchange in Europe or the United States. The latter is an event that, in the Italian case, we only record on the occasion of foreign acquisitions of innovative Italian startups. It should therefore come as no surprise that, in terms of employment, innovative French startups have perhaps more than double the number of employees compared to the 60 thousand employees of Italian startups. A particularly relevant observation given that it is a highly qualified occupation. In short, France would seem to have used the last decade better not only in terms of quantity but also, if not above all, in terms of quality. By this I mean the ability of French startups to achieve amedium scalegreater than their Italian counterparts.

A problem of innovation and research

It is difficult not to wonder what this differentiated trend could be due to. Of course, it is possible - indeed perhaps probable - that what makes the difference is theregulatory contextor thefinancial environmentin which the French and Italian experiences fit. Just as it is possible - indeed perhaps probable - that the different results achieved by French and Italian startups are the consequence of a different design and different methods of implementing thepoliciesimplemented by the two countries. But we should, perhaps, also seriously consider - which we often do not do - the possibility that what makes the difference is theattitudeculturalprevalent beyond and on this side of the Alps. Enviable institutional architectures can be designed and appropriate tools ofpolicybut if both the former and the latter are not based on an adequate cultural basis, both the former and the latter will not give the desired results. It is from this point, therefore, that it is necessary to start. Dynamic market economies embrace a simple principle:“fail fast, grow fast”.As far as we know, it is a principle that France has essentially accepted by investing considerably, among other things, in entrepreneurial training in schools but also in universities. It is reasonable to assume that this has contributed, and not a little, to broadening the pool of potential entrepreneurs and those aspiring to be employed in startups. The results, as we have seen, have arrived. In the Italian case, however, startups often (too often) tend not to make the leap in size, thus remaining at the stage that we could define as "entrepreneurial hypotheses". Lack of ambition? Perhaps, but also, if not above all,training gaps:managing companies of significant size requires skills that are visibly unnecessary if you stop at a much earlier dimensional stage. It requires the willingness to give up total control because often only the involvement of a partner allows growth. In many ways, the "dwarfism" of Italian startups is, in other words, accepted if not wanted. The result is a systemic impact of innovative startups that is all in all modest: rather than innovating, in reality, they imitate. Which in itself is not easy, but very different from actual innovation. Conversely, just a few hours away by car or train, French startups have disrupted entire sectors and/or created national champions: transport and digital healthcare are good examples.

The distance between businesses and research

But how innovative are Italian innovative startups? As far as we know, they operate predominantly in relatively consolidated digital sectors, adapting existing technologies rather than inventing new ones. For example, over a third of our innovative startups deal with software and IT consultancy. Put another way, they create apps, launch platforms, or sell services based on mature technologies. Unlike France, only a minority is active in the sectors that we usually call "Deep-tech", with high R&D intensity (for example: biotechnology, advanced robotics, new materials). The proof is immediate: among the requirements to apply to be an innovative startup - as an alternative to the presence of qualified personnel or an existing R&D activity - there is the possession of a patent. Well, only a negligible minority of innovative Italian startups (to be clear, less than 5%) seems to be able to boast this requirement. And the same goes for their older sisters, the so-calledInnovative SMEs. Which suggests that the innovation produced by what should be the avant-gardes of 'creative destruction' is actually, more than anything else, an incremental innovation. For example, the importation and adaptation to the local market of business models successfully tested elsewhere.

Obviously, the environment in which our startups are located also contributes to this result. The distance between scientific research and business is still wide. Extracting value from the large quantity of patents held by universities or public research centers is often a difficult undertaking. More generally, the results of Italian laboratories struggle to translate into startups, thanks to the lack of venture funds specialized in High-tech (Deep-tech) and a bureaucracy that makes academic spin-offs complex. And the dimensional limits of the industrial structure don't help: there are few large high-tech companies capable of acting as an ecosystem for innovative startups. Consequently, Italian startups rarely compete on the global technological frontier, but rather on the domestic or at most European market, as trend followers. This limits the potential to create lasting competitive advantages: if the technology is not proprietary, it is easier to replicate by new entrants orbig playersinternationals. There is no shortage of positive exceptions (in biotech, for example, in drones or even in energy storage), but if they are considered exceptions it means that they are not the norm. Added to this is a perceptible distrust of Italian investors towards technological risk.

How startups work in Italy

Italian economic history is a good example of the ability that cultural attitudes have to influence economic outcomes. Both directly and indirectly: offering support to the design of institutions permeated by inadequate logic with results that are easy to imagine. Take the case ofinsolvency proceedings,a theme, obviously, decisive for innovative startups that often operate at a loss and whose objective is growth and not short-term financial equilibrium.The Business Crisis and Insolvency Code (2022)adopts a simple principle: it is essential that the state of difficulty of a company is not negligently neglected to the point of becoming incurable. Hence the introduction of early warning mechanisms for companies in difficulty and the provision for all companies, including startups, of "adequate organizational structures" to detect signs of crisis in time: administrative-accounting control procedures and control bodies (from auditors to auditors). For innovative startups, the Code has also taken steps to repeal the previous provisions which did not subject innovative startups to ordinary bankruptcy procedures in the first five years of life, distinguishing between 'minor' and 'major' companies and providing for judicial liquidation (or, as is often said, 'new' bankruptcy) for the latter. It doesn't take much to understand the consequences of rules that visibly derive from a poor - to put it mildly - knowledge of the phenomenon that the rule itself should regulate.

Innovative startups– unlike the typical company on which the Code is modeled – live, by definition, with a high financial risk, with more or less significant initial losses, with the need to often make course corrections in a very short time. Consequently, the alert mechanisms envisaged by the Code run the risk of sending the wrong signals: in the case of innovative startups, the activation of the alert mechanisms does nothing other than signal that the startups themselves are doing what they were born to do: investing in the future. The problem is that, once activated, the warning mechanisms tend to drive investors away and therefore prematurely terminate entrepreneurial initiatives that deserve to be able to make their own way. That's not enough: the characteristic feature of innovative startups is the streamlined and rapid decision-making, the concreteness and, often, the informal structure of thegovernance. Forcing innovative startups into the cage of heavy organizational structures - flawless, perhaps, from a formal point of view but burdensome - means forcing them to move more slowly and to use available resources towards purposes that often have very little to do with growth. As often happens in this country, we preferred immobility to the possibility of abuse.

All this has only one consequence:the Code– but not only the Code – warmly invites our startups to be and remain “minor”. It forces them to "professionalize" themselves prematurely, to abandon the logic ofgrowth firstand/or to do somecapitalizationand delbreak-even pointand not growth is their immediate target. This path undoubtedly reduces the "costs of growth" but also forces the innovative startup to become, ahead of time, a done and finished mini-business, however incapable of staying on the market. Those who know the startup sector know that there are thousands of innovative startups present in investors' portfolios and now in resuscitation or, to be more explicit, awaiting liquidation. The funds ofventure capitalstarted in 2013 or 2014, the issue of liquidations and devaluations will be addressed in the very short term. When this happens, Italy's image as an innovative country will not be improved and perhaps it would not be wrong to stop and reflect on the topic now.

Naturally, nothing would prevent us from intervening on the Code to ensure that it can fully recognize the nature andmodus operandiof innovative startups. But the substance remains: the current regulatory context seems to be built – and perhaps really is – forsuppress theanimal spiritsof entrepreneurs and above all of innovative entrepreneurs.Making the need to deal with legal and bureaucratic risks their owncore business, to the detriment of agility and experimentation. By placing obstacles in the way of what their mission should be: to grow very quickly or, if appropriate, exit the market just as quickly. Dynamic market economies are inspired by the principle of "second chance" and, if this means less protection for creditors, they willingly accept to pay the price. Conversely, a minute and excessive regulation ensures that the basic character of startups - and in particular of innovative startups - i.e. the attitude to risk is compressed and contained until it becomes a marginal element. Let's be clear, the issue is not that of the rejection of transparency and managerial correctness. The theme is that ofexplicit recognition– or rather the protection – of a fundamental element of dynamic market economies. These need regulatory contexts that encourage and favor the method oftrial and error,and do not limit themselves to tolerating it with ill-concealed annoyance.

In short, in Italy the unicorn - far from being synonymous with a young and highly successful company - is and remains a mythological animal. And this even if, as we have seen, politics has not failed to take an interest in the problem.

Too many seeds, few fruits

Since 2012 - and more precisely since Law 179, the so-called Smartup Act - the initiatives have multiplied. Certified incubators have been promoted, financing has been granted (Smart & Start Italia, Smart Money) both at a national and regional level, sector and stadium funds have been activated (National Innovation Fund), tax incentives for investments in startups have been introduced. Overall, public resources mobilized annually have gone from a few tens of millions in the early years of the last decade to a few hundred million in recent years. Just as the intervention of the Guarantee Fund has increased tenfold. At the same time, the lack of coordination of interventions has only resulted ingreater complexityand in a multiplication of initiatives, each often very small in size. The limited duration of some benefits offered support in the initial stages of the startups' life. Support that is missing precisely when they face the dimensional leap. Repeated regulatory changes - for example, regarding tax incentives - have generated uncertainty, while a transparent way of assessing the impact of the public resources thus used is still missing. To the idea of a secular selection based on quality, without dispersing the know-how generated, we seem to prefer maintaining thestatus quoeven when this means cultivating dreams of glory that do not have a realistic underlying basis and not concentrating resources on the most promising cases.

Also from this point of view the parallel with France is interesting.BpiFrance– public investment bank that acts both with direct investments and as a fund of funds – was founded in 2013. The resources mobilized by BpiFrance alone in venture capital funds went from just under 300 million euros in 2013 to 900 million in recent years. Furthermore, France has implemented robust R&D tax credits (Crédit d'Impôt Recherche) and other tax incentives for new businesses (temporary tax exemption foryoung innovative entrepreneurs). Together with tax credits for R&D andyoung innovative entrepreneurs, France today mobilizes public resources equal to 10 times those of Italy. Station F – the largest incubator in the world – is the tangible expression of a massive investment in the image and infrastructure for startups which, since 2017, with the Startup Nation program, has extended to the theme of their dimensional growth and the attraction of foreign investors. An investment guided by well-defined priorities and capable of translating into visible results.

Here too the things to be done are known and would not be that difficult to achieve. Without prejudice to the need to guarantee a stable and attractive regulatory environment for innovative activities and international venture capital funds, it would be appropriate toreorder incentives,simplifying them and eliminating duplications and overlaps, increasing their critical mass and concentrating resources on startups with high growth potential or in strategic sectors. Identifying methods for rigorous monitoring of results and for the attraction of private foreign and domestic capital. Explicitly placing regional realities in competition with each other. A perhaps boring commitment for a State, like ours, which likes to define itself as a "strategic State", but which when tested by facts often manages to combine myopia and inefficiency (as is largely inevitable, given its limited knowledge of reality).

Time is running out. The great work done on the public finance side can only become increasingly burdensome and difficult in the absence of sustained growth. The energies we need are often before our eyes. Let them express themselves freely,accompanying themwithout presuming to know reality better than them.

Bibliography

Assolombarda Study Center, Industrial Union of Turin and Confindustria Genoa, The employment impact of innovative Italian startups between 2012 and 2023, (September 2024;https://www.assolombarda.it/centro-studi/limpact-occupazionale-delle-startup-innovative-italiane-dal-2012-al-2023)

MIMIT, Report on the economic trends of innovative startups, 2018-2025 (various years;https://www.mimit.gov.it/it/impresa/competitivita-e-nuove-imprese/start-up-innovative/relazione-annuale-e-rapporti-periodici#trend)

Nicola Rossi, A miracle does not make a saint. Creative destruction in Italian society, 1861-2021 (IBL Libri, 2024)