The number of startups in Italy is always on the increase, with numerous new companies being founded even during the COVID-19 crisis: A total of 10,630 were entered in the commercial register in 2019, and that number has reached 11,899 today. This equals 3.2 percent of all of the newly founded corporate enterprises in the past year.
The young companies are mostly concentrated in Northern Italy, and there primarily in Lombardy, where the largest share of startups were registered at 26.9 percent. The heart of the Italian startup scene is Milan. But the regions Lazio (11.3 percent of all startups), Emilia-Romagna (8.6 percent), Campania in Southern Italy and Venice (8.2 percent each) also have active ecosystems.
The most important startup supporters are the universities, led by the polytechnic universities in Milan and Turin: According to the ranking UBI Global World Rankings of Business Incubators and Accelerators 2019-2020 by the foundation Fondazione Politecnico di Milano, which is headed by PoliHub of the scientific-technological university Politecnico di Milano, it is one of the five best university incubators in the world. And the incubator I3P of Politecnico di Torino was named the best and top-performing incubator in the world in the report. Other important hubs include the incubator B4i at Milan-based Bocconi University and the Digital Hub of LUMSA University in Rome, which specializes in food, agri and traveltech. In total, there are more than 160 active private and public incubators in Italy.
What does Italy have to offer?
In Italian industry, German startups will find many potential customers from the most varied sectors, most particularly in the processing sector that is typical for “Made in Italy.” There are different points of focus depending on the region: In the North in particular, a wide range of industrial sectors comes together, from textiles to mechanical engineering to shoes and aerospace. In Lombardy, especially in the area around the city Varese, a focus on cosmetics, grain and rubber products stands out. In Piedmont, in contrast, you predominantly find mechanical engineering companies and firms in the agricultural and food sector, while Liguria is distinguished by shipbuilding and handicrafts. Venice is home to industries of specialized production, such as goldsmiths or wine and prosecco. In Friuli, it is digital technologies and the food industry that are prominent. And then you have Emilia-Romagna in the middle portion of the boot with its ceramics sector as well as its tile, shoe and furniture industries. Tuscany is known for its Florentine leather goods and Carrara marble. And finally in Southern Italy, you have the pasta industry in Campania and the aerospace domain in Apulia.
Furthermore, thanks to the country’s industry plan from 2016, new business opportunities are available in the digital sector for the processing industries named above. Together with the reforms, the Italian government also introduced numerous financial incentives with the aim of making Italy more attractive to foreign direct investors. The intention is to support areas in industrial crisis and to promote activities in research and development as well as the growth of innovative companies.
The “Made in Italy” trademark
Being active in Italy means gaining access to business know-how and a large network of experts who are in a position to produce high-quality Italian products. Export figures confirm the quality of the international trademark “Made in Italy.” Exports in the food and beverage industries, for example, reach a value of 40 trillion euros. Italy is also the largest manufacturer of furniture and accessories in Europe as well as the second largest exporter of machinery in the euro area – and for exports to non-European countries, Italy even takes the top spot. And thanks to its strength in research and innovation, Italy comes in fifth place in the EU for delivering high-tech and medium-tech products and takes sixth place for design applications.
The uniqueness of the “Made in Italy” trademark can be traced back to the cultural and artistic richness of the country. This has not only been confirmed by droves of tourists, but also by UNESCO: According to the organization, Italy takes first place for the number of cities that are world heritage sites. This cultural significance in combination with strategy and innovation – contrary to all clichés – can open new perspectives for the bel paese.
A German company in Italy: DatenBerg’s experience
When it comes to different business cultures, there are some things German companies should be mindful of, as the Munich startup DatenBerg reports. In the “European Light Industries Innovation and Technology (ELIIT) Project”, the startup came into contact with the Italian yarn manufacturer Pecci Filati from Prato near Florence. The KMU has a staff of approximately 55 employees and is run by Roberta Pecci. Textile engineering has a centuries-old tradition in the Prato region, but has shrunken dramatically in recent years. The exodus of textile manufacturing to low-wage countries brought with it a focus on demanding and innovative products. Pecci Filati, as an example, manufactures non-linear yarn in small batches that are used in the fashion world.
As part of ELIIT, DatenBerg’s task was to use data to optimize production. The Munich-based company looked for areas with the greatest potential for optimization and thought about how people can be supported at the machines. The startup used its specially developed analysis platform Smartplaza, which is already used in industries such as car body construction and rubber manufacturing. During that time, DatenBerg learned several things about the different business cultures:
- Ciao or hello
As in any country, in Italy you also have people who can and cannot speak foreign languages. At Pecca Filati, for example, the management team speaks English, but the rest of the team does not. This can make processes slower and less efficient due to the time needed for translation. - Italian pragmatism
Topics like data security and confidentiality can be dealt with more pragmatically in Italy than is often the case in Germany. For example, DatenBerg was sent videos of the Pecca Filati production facilities on YouTube. - German punctuality
For face-to-face meetings, it may well be the case that appointments are not strictly kept – but you can always enjoy the wait with a good espresso. When it comes to online conferences, however, the Italian side tends to be more punctual. - Vacation in August
When making project plans, you should keep in mind that August is a serious month for vacationing in Italy. The summer slump is much more pronounced than in Germany. If something needs to be organized, you will have to wait until September. - Enjoying work
Something that really impressed DatenBerg is how much their Italian colleagues enjoy their work. Because the German team isn’t able to talk with its technical contact person directly, he films videos about the production machines in Italian and adds subtitles. That shows appreciation and motivation – even without direct communication.
Guest contribution by the Italian Chamber of Commerce Munich-Stuttgart (ITALCAM)
The Italian Chamber of Commerce Munich-Stuttgart (ITALCAM) is part of the network of Italian chambers of commerce abroad and is officially recognized by the Italian Ministry of Economics. The chamber was founded in 1926 in Munich with the aim of promoting and expanding trade relations between Italy and the German-speaking market. The members of ITALCAM are companies, freelance professionals and public institutions.
ITALCAM is available as a point of contact for companies looking for support in identifying business opportunities in Germany or Italy or in expanding their sales network, for which it offers customized consulting services. Moreover, ITALCAM plays a strategic role in various cooperative projects between Italy and Germany in key sectors such as logistics, environment, mechanical engineering, the creative industry as well as the design, agriculture, food and tourism industries.