Startup Italy, an ecosystem searching for a market

Published on Monday, 20 February 2017

In Italy, the growing innovative startup fabric increasingly attracts attention from investors. More than three years after the enforcement of measures promoting young innovative companies, the numbers speak for themselves: in mid-2016, there were 5,940 startups, around 40% more than in 2015, with a 160% leap over 2014.

The Annual Report to the Parliament on the implementation and impact of the policy supporting startups and innovative SMEs, compiled by the Italian Ministry of Economic Development, portrayed a lively and expanding sector.

The 2016 MED report on ‘Italy’s Startup Act’ was recently presented by the Ministry’s industrial policy, competitiveness and SMEs Director-General Stefano Firpo at a Luiss EnLabs meeting in Rome, followed by a round table with the participation of Enel’s Innovation and Sustainability Director Ernesto Ciorra.

Italy’s startups therefore form an ecosystem in ferment, increasingly appealing for investors and capable of effectively using the tools at their disposal. Even so, Italy’s innovative companies are struggling to get off the ground in terms of dimension: their overall turnover in 2016 remained below the 600 million euro threshold, while startups produce a workforce totalling around 35,000 employed, with an average of 3-5 people per company.

Firpo considers it necessary to understand how the growth of Italian startups can be boosted. This issue seems to be linked less to the availability of funds and to the innovation offer, and more to market access. There is an innovation demand issue. On this matter, it is necessary to increase the synergy between the public and private sector and encourage the role of industrial corporate companies, in the field of both corporate venture capital and Open Innovation.

Innovation and Sustainability Director Ciorra highlighted that for an industrial company like Enel, doing Open Innovation does not only mean giving funds to startups, but also accomplishing industrial development with them, accompanying them on global markets. The assumption for this approach is openness: “Open Innovation means opening the doors of the company, explaining what the technological priorities are and working on them in a partnership with the startups, collaborating and becoming their customers”.

Ciorra emphasised that, in order to operate this way and do industrial mentorship, companies should acquire an internal structure and create innovation governance processes facilitating relations with startups, while directly linking business needs to the innovation offer. All this requires “a cultural revolution”.

The Innovation and Sustainability Director then recalled a number of successful startups that have worked and presently work with Enel - Athonet, I-EM e Nuvve –and the Open Innovation numbers of our Group. Over the past two years, it has analysed ideas coming from more than 1,560 startups, has met 480, studied possible industrial projects with 280 and set up partnerships with 80 of them.