In recent years, Italy has shown an ability to restore credibility at the macroeconomic level, particularly through a more rigorous and disciplined management of public finances. However, when attention shifts beyond public accounts to the real dynamism of the economy, clear structural weaknesses emerge. Unlike other European countries that have strengthened their growth capacity after the financial crisis, Italy continues to record potential growth below the euro area average. This gap reflects deeper difficulties in renewing the productive fabric and in sustaining long-term innovation processes.
In the most advanced market economies, innovation and employment growth largely depend on the creation of new businesses. The entry of new market players, combined with the exit of less productive firms, enables a continuous reallocation of resources toward more efficient activities. This process, based on so-called “creative destruction,” is essential for productivity growth and for the economic system’s ability to adapt to technological and demand-side changes. When this mechanism weakens, as in the Italian case, overall growth also tends to slow.
The decline of businesses in Italy
In Italy, entrepreneurial dynamics have shown a long-term weakening. The number of new firms per capita has progressively declined from the 1980s to the present, falling from around 200–250 new firms per 100,000 inhabitants to just over 100 in the second half of the 2000s. At the same time, the gross business turnover rate—defined as the sum of firm birth and death rates—is not only lower than international benchmarks but has also decreased over time. This signals a reduced ability of the productive system to renew itself and to quickly replace less efficient firms, with negative effects on average productivity.
The difference with France
A comparison with France highlights that the differences concern not only the number of new firms but, above all, their quality and growth capacity. Despite a relatively similar number of innovative startups, the French ecosystem has proven more effective in supporting the transition of startups toward more advanced stages of development. France records a significantly higher number of scale-ups and companies valued at over one billion euros, capable of operating internationally, listing on financial markets, and generating high-quality employment. This outcome is the result of a systemic approach that has supported the growth of innovative firms throughout their entire life cycle.
A problem of innovation and research
One of the main factors behind this divergence lies in the nature of innovation itself. In Italy, most innovative startups operate in mature digital sectors, such as software and IT services, adapting existing business models rather than developing new technologies. By contrast, France shows a stronger presence of startups in deep-tech sectors, characterized by high research and development intensity. The weak integration between universities, research centers, and the Italian business system limits the ability to leverage patents and scientific results, reducing the potential for radical innovation and the creation of lasting competitive advantages.
Different cultural attitudes toward risk and failure play a decisive role. In France, a model that encourages rapid growth has gradually been embraced, even in the face of a high probability of early failure. In Italy, by contrast, many startups tend to remain small, often to avoid losing control or due to concerns about the consequences of failure. This choice limits their ability to attract capital, to pursue significant scale jumps, and to generate a meaningful employment impact, particularly in terms of highly skilled jobs.
The gap between business and research
The relationship between scientific research and business remains one of the main unresolved issues. Transforming public research results into entrepreneurial initiatives faces financial, organizational, and bureaucratic obstacles. The scarcity of venture capital funds specialized in advanced technologies and the complexity of academic spin-off processes reduce growth opportunities for the most innovative startups. Moreover, the limited presence of large technology companies capable of acting as ecosystem catalysts makes it more difficult to develop high-tech value chains.
How startups operate in Italy
The Italian regulatory framework tends to impose an early level of formalization on innovative startups, often incompatible with the need to experiment and grow rapidly. Rules governing corporate crisis and creditor protection, although inspired by stability concerns, ultimately discourage risk-taking and the “trial and error” approach typical of more dynamic economies. This environment pushes many startups to prioritize short-term financial balance over growth strategies, thereby reducing their competitiveness in global markets.
Too many seeds, too few fruits
In recent years, public policies supporting innovation have multiplied, alongside a significant increase in available financial resources. However, the fragmentation of instruments, lack of coordination, and absence of robust impact assessment mechanisms have limited the overall effectiveness of these interventions. A comparison with the French model shows how resource concentration, regulatory stability, and clear priority-setting have produced more solid results in terms of firm scale growth, capital attraction, and the development of an internationally competitive innovation ecosystem.
