Rome, 28 October 2021. Rome Business School, the business school part of the Formación y Universidades network by De Agostini and the Planeta Group, has published the study: “Italian entrepreneurship. Analysis of the successful trends for the economic recovery of the country “. The research, curated by Valerio Mancini, Director of the Research Center of the Rome Business School and Katerina Serada, Founder of the SDG Hub (Center for Sustainable Economies and Innovation), analyzes the main challenges and opportunities for Italian companies and entrepreneurs who emerge and resist in the current and future post-pandemic context.
According to Valerio Mancini, to recover from the economic consequences of Covid-19 we need to build back better: “Italy needs to make structural changes to keep up with the times, with new technologies and new consumer needs. The resilience of entrepreneurs, which made 3 out of 4 SMEs resist during the pandemic, must be accompanied by paths of growth, improvement and optimization of resources”.
The research proposes four trends and opportunities that may prove to be key to the country’s economic recovery:
The transition to the circular and sustainable economy
The circular economy is a production and consumption model that involves sharing, lending, reusing, repairing, reconditioning and recycling existing materials and products for as long as possible. To carry it out efficiently, new management practices and technological solutions must be implemented to improve the use of resources and make processes more sustainable and move from the linear “take-make-dispose” management model to the “reduce, reuse, recycle” model. .
In the case of Italy, it would be ideal to reduce the dependence on raw materials from abroad: the dependence on the global market for the supply of raw materials is increasing all over the world (70% of all countries are importers net) and Italy has a higher dependence on international trade than the G20 average, which translates into a greater dependence on foreign markets and, consequently, a great risk for the competitiveness of SMEs and Italian industry.
If implemented well, in Italy, the circular economy would stimulate the creativity of entrepreneurs and expand the range of products made with renewable and recycled materials, as well as innovative designs, transforming a series of problems of the national production system into opportunities for Italian SMEs. . This would translate into great great benefits, not only for consumers and the environment, but also for businesses, which can arise from the use of a “sustainable design”. In fact, the study reports that companies that excel in design increase revenue at almost double the rate of competitors less sensitive to this factor.
The state of digitalization of Italian SMEs is still in the preliminary phase. According to the “Digital Infrastructure Index” (Ernst & Young, 2020), the digital lag of our country and the need to relaunch the Italian economy through digitalization indicate the urgent need to accelerate investments in digital infrastructures, based on non only on the prospects of the consumer market, but also and above all on the business needs of companies. The Italian production chain shows two different faces: the historical north-south gap does not exist as the technological deficit, the lack of a real digital modus operandi implemented at company level, is present throughout Italy.
Furthermore, according to ISTAT, digitization increases creativity and saves money. In fact, it plays a fundamental role in reducing mechanical processes for workers, leaving more space for creativity in the professional field, to the benefit of young people. Sap Concur’s “Survey on Digitization and Reinvested Savings in Companies” shows that in 2020 30% of the companies interviewed declared significant savings deriving from digitalization and that in 83% of the cases studied, these savings were reinvested in the development of the company.
Support family businesses
AIDAF estimates that in Italy there are approximately 784,000 family businesses, more than 85% of the total number of businesses, which constitute 70% of employment and are concentrated in the Manufacturing (approximately 43%), Commerce (28%) and Financial and Real Estate (12%).
In terms of the impact of family businesses, the Italian context is in line with that of the main European economies: France (80%), Germany (90%), Spain (83%) and the United Kingdom (80%). The factor that distinguishes us from these countries is the lower recourse to external managers: 66% of Italian family businesses are entirely managed by families, while this only applies to 26% of French family businesses and only 10% in the United Kingdom. .
From a geographical point of view, the data fully reflect the typical characteristics of the Italian “two-engine” economy, with 74% of medium and large family businesses located in the northern part of the country, 16% in the center and 10 % in the south and the islands.
The research therefore argues that it is more than ever necessary to support the growth, development and innovation of family businesses, which have historically been the fulcrum of the Italian economy and have always courageously resisted moments of crisis.
Follow the PNRR for economic restart
During the worst period of crisis caused by the pandemic, many companies have had to change their way of working and doing business to adapt to new social contexts. The European Union has allocated resources to support these changes thanks to programs such as Next Generation EU (NGEU), a 750-billion-euro package, about half of which is made up of grants and aimed at the modernization of businesses. At the national level, Italy has proposed the National Recovery and Resilience Plan (PNRR), which together with the Development and Cohesion Fund will reach 248 billion euros available by 2036. To these resources, 13 billion made available must be added from the REACT-EU program to be spent between 2021 and 2023.
The PNRR is developed around three strategic axes shared at European level: digitization and innovation, ecological transition, social inclusion and has six missions: Digitization, Innovation, Competitiveness, Culture; Green Revolution and Ecological Transition; Infrastructures for Sustainable Mobility; Education and Research; Inclusion and Cohesion; Health. The Plan intends to repair the economic and social damage caused by the pandemic crisis, contribute to resolving the structural weaknesses of the Italian economy, and accompany the country on a path of ecological and environmental transition. With these objectives, we want to reduce the gaps, accompanying entrepreneurs in adapting to the new needs of the market to be successful in the post-pandemic period and to align themselves with the rest of Europe.
“Given the centrality of family businesses in Italy, it is surprising to note that their role in the resilient economic recovery is not adequately exploited by the PNRR,” says Katerina Serada. “Exploiting their potential through the integration of their distinctive features within the Plan would be advantageous for the restart, not only economic, of the country”.
The research concludes that although the endemic lack of raw materials in Italy has generated over time a solid system of competitiveness and creative innovation strongly linked to local family-run businesses, the challenges that now arise are of more enormous scope, and require capable entrepreneurship. to deal quickly with the continuous paradigm changes with a new and solid proposal. It is no longer enough to invest in the historically rewarded aspects of the Italian market and productive fabric. The impacts on the real economy must be considered through a systemic approach (not only environmental and economic, but also and above all social) and in line with the EU Next Generation Plan and the PNRR. Circular economy, digitization and SMEs, in particular family-run businesses, are the key factors to be included as protagonists in the development plans to be implemented in the near future.