Since 2012, the Italian Government has been fostering innovation to promote digitalisation and strengthen the competitiveness of the Italian industry.
With the new industrial policy “Industria 4.0” (“Enterprise 4.0”) and the Italian policy framework for innovative start-ups (also known as the “Start-up Act”), the Italian Government has set particular regulations for new and existing innovative companies, in order to enhance growth and create a more innovative business environment.
Companies that possess conditions to register into the special sections of the Italian Business Register dedicated to Innovative Start-ups and Innovative SMEs, can access to a number of administrative and fiscal benefits, such as: zero cost incorporation, simplified insolvency procedures, tax incentives for equity investments, and a public guarantee scheme for bank credit.
And thanks to these special sections of the Italian Business Register, we have some statistics I am able to present in this article.
But what kind of companies are we talking about?
Read: Innovative start-ups and SMEs: definition for the Italian law
Unfortunately, the criteria defined by the Italian Government are not sufficient for distinguishing the truly innovative companies from the more traditional micro-enterprises, which can benefit from the new industrial policy regulation. And this partially misleads the statistics.
Today, innovative start-ups and SMEs produce together over € 2 billion of annual turnover, and employ about 50,000 people.
Innovative start-ups
In the period February 2013 – 15 April 2019, 10,164 innovative start-ups have been incorporated (representing the 0,2% of total enterprises in Italy), of which 62,4% just in the period 2017-2019.
We have revenues available for 53% of these companies, and just 1,7% of them have reached an annual turnover above € 1 million; the average annual turnover registered in 2017 was only € 164,000.
As of 30 June 2017, after 5 years from the introduction of innovative start-ups in the Italian legal system, there were 7,398 registered companies, which employed 10,262 employees.
Overall, the total turnover of innovative start-ups for which financial data is available (about 64% of them) was € 773 million in 2016. If we look at the companies with turnover data available for both 2015 and 2016, their sales figures grew overall by 81,3%.
Only 2,9% of the registered companies had an annual turnover greater than € 1 million, collectively representing € 325 million.
A summary of the incoming and outgoing flows of start-ups in the special session is below.
| Number of start-ups at 30/06/2016 | 5,942 |
| Registered between 01/07/2016 and 30/06/2017, of which: | 2,681 |
| Removed from the special section between 01/07/2016 and 30/06/2017, of which: | 1,216 |
| – ceased trading | 193 |
| – not trading, suspended, in liquidation/bankruptcy | 93 |
| – still trading, of which: | 930 |
| – converted into innovative SMEs | 156 |
| – registered in the ordinary section | 774 |
| Number of start-ups at 30/06/2017 | 7,398 |
More than 1,200 start-ups left the special section in the period July 2016 – June 2017; the main reason is that they no longer satisfied the requirements for the registration into the dedicated special section, because they either:
- have been incorporated for more than five years in the innovative start-up special section; or
- have reached an annual turnover greater than € 5 million; or
- have being listed on a multilateral trading platform; or
- have distributed profits.
The survival rate of start-ups in Italy is very high, close to 90%. This is due mainly to:
- the slow go-to-market of many innovative start-ups (there are a high number of companies with zero or extremely low turnover in the early years of trading);
- the incentives of the policy which favour survival (e.g. extension of the period allowed for the reinstatement of the share capital in the event of a loss below the minimum share capital);
- the high barriers to entry in Italy (regulatory, cultural factors, unstable economy).
Innovative SMEs
In the period 15 April 2015 – 15 April 2019, 1,036 innovative SMEs have been incorporated, of which 70% in the period 2017-2019; only 30% of them were established in 2013 of afterwards.
We have revenues available for 96,5% of the companies, the average annual turnover was € 2.7 million in 2017; 28% of them reached an annual turnover above € 5 million in 2017, just 1,5% of them are companies established in 2013 of afterwards.
The oldest SME began trading in 1926, whilst 59% of them began trading in 2010 or afterwards.
SOURCES:
You can find a) the detailed statistics produced by the Italian Minister of Economic Development in the Section “Relazione annuale del Ministro al Parlamento”, and b) the lists of incorporated innovative start-ups and SMEs in the Section “Open data dal Registro delle Imprese”, at the following link: