Only 9,000 Innovative Companies in 25 Years: Italy Lags Behind in the Innovation Race

In the last 25 years, Italy has managed to generate only 9,000 innovative companies. This number is significant for two reasons: on one hand, it is less than half of what has been achieved by Germany, France, and Spain; on the other hand, Italy is the leading economy in Europe for manufacturing SMEs. This was revealed by the research report "The Great Technologies of the Future: New Paradigms for Economy, Security and Society. Towards a Techshoring Strategy for Italy" from The European House - Ambrosetti.

Italy Leads in Manufacturing SMEs but Lacks Innovation

It often happens, while working with small and micro-enterprises, to hit a wall that seems insurmountable: "we’ve always done it this way". An approach that fails to take into account the fact that the world, in the meantime, has changed and continues to change at an ever-increasing pace, and that "doing it this way" not only does not guarantee success but often not even survival.

Yet, Italy has many numbers on its side: with 338,000 manufacturing SMEs, our country is first in Europe by a considerable margin (France is second with 257,000, followed by Poland with 240,000). There are 115 industrial districts that show an average productivity 20% higher than the national average. The Italian technology hubs are the usual suspects (Milan, Turin, Bologna, Rome), where most patents are registered, while the scientific hubs are Milan, Padua, Bologna, Rome, and Naples, with a mention for Pisa in the fields of robotics and AI. With the exception of Naples, the South seems to remain on the margins when it comes to innovation.

The abundance of manufacturing companies in Italy leads one to believe that there is fertile ground for innovation, but this is not the case. The problem is that industrial districts have decreased by 36% in the last twenty years (they were 181), and that innovation does not come from small enterprises, as is often the case in the startup model, but instead from large companies, despite these only making up 1.3% of the total. For comparison, in the last 25 years, the UK has generated 65,500 innovative companies, while the United States (which, it should be noted, has a population equal to that of Italy, France, the UK, Germany, and Spain combined) has reached 328,500.

The reasons behind this overwhelming difference with other countries are, once again, always the same. Among them is the much-discussed "brain drain", which sees 20,000 graduates in scientific subjects emigrate out of a total of 119,000 in our country (which is also fourth in Europe for the number of graduates in such subjects). Job demand is also struggling: according to the TEHA analysis, only 2% of job offers actually concern what TEHA defines as "strategic technologies", namely energy and water, AI and quantum computing, robotics and autonomous systems, biotechnology and advanced materials, and defense, space and security. On the other hand, however, despite the job market contracting by 0.3% every month, the demand for professionals specialized in the latest technologies is growing by 4.2% monthly.

How to Change?

Beyond easy considerations about the shortcomings of politics over the last forty years and the lack of vision, planning, and strategy from every political force, TEHA proposes three main points where innovation seems to get stuck in Italy.

The first point is that there is no direct link between research and patents, and thus despite investments being made in research, there is no return in the form of patent registrations (in this area, Anglo-Saxon universities excel). In Italy, only 3% of scientific production results in a patent.

The second point is the distance between patents and businesses: TEHA notes that technology transfer offices have only half the staff compared to the European average and that such personnel is legal-oriented, lacking business development skills.

The third is the lack of growth and expansion from companies. TEHA states that there is not a lack of capital in absolute terms (though, as we have seen, we are also far behind in this field compared to other countries), but that there is a lack of specialization on the part of venture capital funds in technological macro-trends.

TEHA's research concludes with four measurable objectives to guide innovation:

1. Reform the evaluation criteria for academic research, which should also include industrial impact. A similar criterion is adopted by the UK, France, and Germany, with the latter tying public funding to technology transfer objectives.
2. Strengthen the structures that carry out technology transfer so they become business development centers through figures capable of conducting scouting, industrial matchmaking, and commercial support.
3. Assign KPIs to public research bodies such as CNR, IIT, and ENEA concerning spin-offs, patents, and industrial partnerships, potentially linking the provision of public funds to the achievement of these objectives.
4. Strengthen the financial ecosystem by attracting or building venture capital funds specialized in the five strategic areas.

The problem, in short, as is often repeated, is systemic, and, as is known, changing the system is like turning a container ship: it takes a lot of energy and is, in any case, a very slow process.