Rome, May 10, 2022. Rome Business School, part of Planeta Formación y Universidades created in 2003 by De Agostini and Planeta Group, has published the research “Italy between digitalization and artificial intelligence. The role of PNRR in building the Italy of the future”. The study, edited by Valerio Mancini, Director of the Research Center of the Rome Business School, Francesco Amendola, Program Director of the Specialized Master in Data Science and of the Executive Master in Data Science and William Carbone, Program Director of the Professional Master in Artificial Intelligence, makes an analysis of the strategic axis of digitalization and innovation of the PNRR, with particular focus on the state of progress of Italy in AI. The research highlights the technological backwardness of Italy, the steps forward made, and the strong contrast given by being today the country among the first at the international level for the development of Artificial Intelligence.
The AI sector is booming globally, receiving about $93.5 billion in private investment in 2021, more than double the total private investment in 2020. The size of the global AI market is expected to grow at a rate of 42.2% over the 2020-2027 period. According to the MIP Observatory, the AI market in Italy grew by +27% in 2021 to €380 million, a value that doubled in just two years.
A 2020 report by the Brookings Institution shows that Italy has the most comprehensive AI development plan in the world, it is followed by France, Germany, New Zealand and the United States. Despite this, Francesco Amendola, one of the authors of the research, states that “the most innovative technologies and that can bring the greatest competitive advantages for companies, do not find the right prerequisites and funding within the PNRR: in particular Blockchain and Artificial Intelligence”. However, the research shows that Italy remains among the global leaders in AI.
Currently, Italian universities offer more than 200 distributed AI curricula and not only that, Italy in 2021 launched one of the largest and most ambitious doctorates in artificial intelligence worldwide called the National Doctorate in “Artificial Intelligence.” Moreover, it hosts several high-level research infrastructures, is one of the founding members of the Global Partnership on Artificial Intelligence (GPAI), and Italian researchers participate in all major international AI research networks, including the most prestigious EU networks, such as CLAIRE and ELLIS. However, there are several weaknesses such as: fragmentation of research, insufficient attraction of talent, significant gender gap (only 19% of AI researchers are women), and limited patenting capacity.
From the entrepreneurial ecosystem point of view, Italy has a growing number of start-ups with AI skills. There are more than 110 university spin-offs or start-ups linked to research centers in 2020 and, according to a research conducted by the School of Management of MIP, 53% of medium-large Italian companies claimed to have started at least one AI project. The sectors showing the highest prevalence of fully operational projects are manufacturing (22% of total projects started), banking-finance (16%) and insurance (10%).
William Carbone, author of the research, states that: “thanks to AI, various companies could become discovery-oriented companies, creating an organization whose culture is defined by rigorous experimentation, applied also to their internal processes, so that it becomes an integral part of their strategy and business initiatives.”
With the National Recovery and Resilience Plan, the Italian government aims to take advantage of European Union funding allocated under the Next Generation EU program to increase the country’s economic growth, reduce the public debt/GDP ratio and lower the unemployment rate. One of the most important axes of the NRP, to which about 25 percent of total spending corresponds, is digital transition, an area of critical urgency for Italy: according to the European Commission’s Digitization of Economy and Society Index (DESI) 2021, Italy ranks 20th out of the 27 EU member states.
Currently, digital transformation represents a market that accounts for more than 4% of GDP and has an increasing trend: 67% of Italian companies in 2021 implemented digital technologies, compared to 58% in the previous year (Confindustria, 2021). Despite this, in Italy there are several factors hindering the progress of this transformation such as the digital divide and the threat of cyber attacks.
According to an Auditel-Censis report, about 10% of Italian households have no Internet connection at all, about 30% have only a mobile connection and one in 4 households has only a smartphone to connect to the Internet. In addition, according to ISTAT, more than 25% of families believe that the Internet is not useful or interesting and almost 60% of families do not know how to use the Internet at all. Regarding the consequences of the pandemic on education, it is highlighted that in 2020 8% of students were excluded from any form of distance learning (DAD), a quota that rises to 23% if only disabled students are considered.
A very impactful critical point is the continuous increase of cyber attacks worldwide. According to a report by Clusit (2021) attacks have increased by 10% compared to the previous year and have been increasingly serious. In Italy, a percentage of server compromises of almost 60% more than in 2020 has been recorded: the most affected sectors are Finance/Insurance and Public Administration, for a total of about 50% of cases, while it is the Industry sector that has presented the most significant increase, going from 7% in 2020 to 18% in 2021.
An ISTAT report from 2021 shows that in Italy only 20 percent of companies have a high level of ICT (Information and Communications Technologies) adoption and only 30 percent of companies use ‘smart’ production processes and IoT (Internet of Things) devices. As already mentioned, Italy ranks far behind in the European rankings for digital development, this is due in particular to a lack of human capital: 86 percent of Italian workers do not have the digital skills needed by companies (Salesforce, 2021).
Compared to the 27 EU states, Italy, ranks 17th for “enabling factors of digital transformation,” 18th for PA digitization, 23rd for digitization and even 25th for digital skills diffusion. Leading the ranking of the most advanced digital economies in the EU are Denmark, Finland, Sweden and the Netherlands, while Romania, Bulgaria are the tailwaters. The EU aims for 80 percent of citizens to possess basic digital skills by 2030, but since 2015 there has been an annual growth rate of only 0.9 percent. To reach the 80 percent target set for 2030, this growth rate needs to triple.
Despite Italy’s lag in digitization compared to other European states, a promising future is in sight. The authors of the research analyzed data on access to the main digital services highlight that in Italy the Digital Transformation path appears to be well underway thanks to the development of updated plans and for the allocation of new funds, especially with regard to the provision of digital services to citizens. To date, 99.4% of Italian municipalities have adhered to the PagoPA digital service, the National Register of Resident Population (ANPR) includes all municipalities of the national territory, the Electronic Identity Card (CIE) has 22 million digital accesses, SPID counts 27 million digital identities issued and 570 million accesses, the App “IO” has been downloaded by over 25 million Italian citizens, and the Electronic Health File (Fascicolo Sanitario Elettronico – FSE) has over 350 million digitized reports accessible.
At a territorial level, the North-Central and Southern divide remains strong. MIP’s Digital Agenda Observatory notes that in first place in terms of digital growth is the Autonomous Province of Trento with 57.5 points, followed by Lombardy with 56.2 and the Autonomous Province of Bolzano (56.1). Closing out the ranking are Basilicata, Calabria and Molise.
To address the need to digitize the country, the PNRR provides for investments dedicated to the digitization of PA and digital training of staff, as well as the improvement of online security, the development of cloud computing infrastructure and aims to ensure connectivity to 1 Gbps for all and full 5G coverage of populated areas by 2026, four years ahead of the EU target. It will also be significant investment for the expansion of PhDs and innovative PhDs, especially considering that: currently the number of PhDs awarded in Italy is among the lowest in the EU; about 20% of people who complete a PhD move abroad; those who, having completed their PhD, remain in Italy suffer from a deep mismatch between the high level of advanced skills they possess and the low professional content they encounter in the workplace.
Digital transformation, more than a goal, is a path. The PNRR proposes to reduce and resolve, through targeted investments, the digital gap both between Italy and other European countries and between the Italian regions themselves. Despite the many obstacles, Italy is gradually realizing the digital and development objectives set. However, it is necessary to recognize the limits of the PNRR, the criticalities in digital training of citizens and the strong differences between regions, problems that must be eliminated and smoothed out as soon as possible in order to properly accomplish this digital transformation, and to finally recognize a more modern, evolved and agile country. Seeing the positive trend in the field of AI, the authors of the research recommend to strengthen the research base on AI and associated funding, promote measures to retain and attract talent, improve the process of technology transfer and increase the adoption of AI among businesses and public administration, encourage the creation of innovative companies and increase investment, because as stated by William Carbone: “the potential of AI lies in the creation of a more systematic approach, integrating AI in organizations that pursue innovation”.