Italy has the potential to attract innovation and entrepreneurship in a post-Brexit Europe, but will the government seize the opportunity?
Italy has a long tradition of entrepreneurship.
Ninety percent of the country's economy consists of small and medium-sized business. Many Italians dream of being their own boss, and many foreigners dream of bringing their businesses to Italy.
So, entrepreneurship should be thriving in this country.
But it isn't, at least according to the 2014 National Experts Survey, which ranked Italy below the other major European countries across almost all aspects of the entrepreneurial ecosystem.
The survey identified government policies, government programs and entrepreneurial education as particularly lacking.
Recently the Italian foreign minister, Angelino Alfano, announced that he planned to put an emphasis on taking small and medium-sized businesses abroad, and promoting the ‘Made in Italy’ brand.
This is certainly an encouraging step, but there is an argument to be made that the government needs to do more to support entrepreneurs in the early stages of business development.
READ MORE: Milan can attract businesses that leave Brexit Britain, says Italy FM
Francesca Fabbri (26) and Nicolas Barosi (22) are co-founders of Lès Geometries and are passionate about building a clothing brand for young, on-the-go city dwellers.
Lès Geometries has already made it into a handful of boutique clothing stores in Milan, and the pair is optimistic about growing beyond Italy in the future, but their immediate challenges centre on education and funding.
“We need better support structures,” explains Francesca, “people with experience that can help us navigate some of the challenges we face as a startup.”
Francesca Fabbri and Nicolas Barosi, co-founders of Lès Geometries. Photo: Enrico De Luigi
Under Matteo Renzi, the Italian government passed the Italian Startup Act, aimed at supporting high-tech startups.
The act makes it easier to launch a company, get investment and obtain fiscal deductions, but for entrepreneurs outside of the high-tech space, none of these benefits applies.
Instead, many small businesses in Italy rely on assistance from family and friends.
Gianluca Festa, a commercialista and partner at Studio Festa, suggests that the Italian government needs do more to support early stage businesses and attract foreign entrepreneurs.
He explained: “To improve entrepreneurship there should be an economic and fiscal policy to fund the first year of a new company; making it easier for entrepreneurs to launch a new venture and access support and funding.”
For foreigners starting a new business in Italy, the challenge can be even more daunting.
Chris Luccarda – a second-generation Italian born in South Africa – recently moved back to Italy where he and his partner Eve Feng have opened the Loving Hut Vegan Cafe in Rimini, a small city 120km south-east of Bologna.
The Loving Hut Vegan Café Team: Francesca Spensieri and owners Eve Feng and Chris Luccarda. Photo: Jean Moncrieff
Luccarda was advised to buy an existing business rather than to open a new one.
Chris says: "Given all the red-tape involved, our accountant advised us that it would be simpler and less expensive to take over an existing business, rather than to set up something from scratch."
He was also lucky to find a local lawyer who could speak some English and helped them broker a good deal.
However, since taking over the business more than six months ago, they have fallen victim to the country's complex regulatory frameworks and rigid labour market.
Brexit is a real opportunity for Italy, but only if the Italian government acts now. Berlin has its sights set on usurping London as the startup capital of Europe. Paris has announced seven new skyscrapers to lure London jobs.
If Italy doesn’t move quickly to reduce bureaucracy, it will be left picking up the Brexit scraps.
Jean Moncrieff has a passion for helping entrepreneurs grow their businesses. He is a writer, photographer and marketing consultant who splits his time between Rimini and London.
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