October 7, 2019 Ecosystem

Brief analysis of the Italian start-up ecosystem: the current status

In this article you find a brief analysis of the current status of the Italian start-up and innovation ecosystem. It is a synthetic analysis of the key elements that mostly describe an ecosystem. For more information please contact me.


Italy is the fourth most populated country in Europe, with 60,5 million people.

It is a country of small and medium-sized enterprises known for the production of high quality products: approx. 145 Italian companies have revenues above € 1 billion (approx. 250 companies if we also consider Italian subsidiaries of international groups); more than 950 thousand Italian companies are SMEs, 85% of them with revenues below € 2 million.

Manufacturing is the leading industry, with the electronic, mechanical and pharmaceutical sectors driving most of the industry growth. Other relevant sectors are food & beverages, fashion, and lifestyle.

On the digital side, Italy is trying to reach the EU average. A national state aid scheme has been approved by the European Commission, to support connectivity and ultra-broadband access across the country. But still, digital skills need to be developed in order to enable Italian citizens to fully enjoy the benefits of the digital economy.

Business culture

  • Italians historically have a low tolerance for risk and failure.
  • Recently, a positive image of entrepreneurship and innovation is spreading across the country, and young people.
  • Success stories and role models are expected to come.


  • Italy has a great number of high-skilled researchers, scientists and technical talents.
  • The number of digital talents is still limited but it is increasing, mainly thanks to universities’ new degree programs, and incubators and accelerators’ training courses.
  • Currently, few entrepreneurs have experienced the full cycle (from the start-up phase to the exit) and few managers are willing to leave big corporations for joining start-ups.
  • The country is experiencing a “brain drain” issue combined with an inability to attract foreign “brains”. The Italian Government just strengthened the fiscal incentives for attracting Italian and non-Italian human capital from abroad.

For more info read: Tax incentives for employees moving to Italy – Interview to Chiara Pirrone, Manager at EY

Education and training

  • The quality of the high level education is generally high, with some Italian universities amongst the best 200 in the world.
  • Schools and universities are investing in digital education, with new-dedicated study programs and courses.
  • Good quality of researches in labs, but technology transfer need to be improved.
  • Training on entrepreneurial and digital matters is also provided by incubators, accelerators, and professionals.


  • The level of bureaucracy is very high and the regulatory framework is complicated and sometimes unclear.
  • A new regulatory framework for innovative start-ups and SMEs was introduced in 2012, to support innovation and the launch of new entrepreneurial initiatives.

For more info read: Legal framework for innovative start-ups

  • Italy has a fiscal incentives scheme for domestic investors, which is probably one of the best in EU (the benefit amounts to 30% of the invested sum, up to € 1 million yearly for individuals, and to € 1.8 million for companies).

Access to capital

  • Pre-seed and seed capital is available and provided by business angels.
  • VC funds are few and mainly focused on digital sectors. Domestic VC firms are raising new and more generous funds.
  • Few corporations have domestic corporate venture capital programs, but the number is increasing.
  • The Italian Government is establishing the National Innovation Fund (NIF), with a budget of € 1 billion to invest in venture capital funds and innovative start-ups and SMEs.

For more info read: National Innovation Fund: a hope for the Italian venture capital industry?

  • Banks are now financing start-ups thanks to a free-of-charge public guarantee, which guarantees 80% of the start-up’s bank loans amounting up to € 2.5 million.
  • Valuations of Italian start-ups are currently low compared to the rest of the world.