Italian new tech startups – The Best Ecosystem for Technology Start-ups: the Italian Evidence

Researchers and policy makers agree on the fact that New Tech Based Firms (NTBF) play a fundamental role in modern industrialized economies. This is all the more true in Italy. On the one hand, in fact, due to the weakness of the national high tech industry, there is a great need for a complete generational renovation in the enterprise operating in this sector. On the other hand, the country presents many success stories of new enterprises operating the the medium and low tech content sectors. Therefore the question arises concerning the conditions necessary in Italy for the development of top level firms operating in high tech sectors.

In this context, the analysis produced by the RITA Observatory of the Department of Management Engineering of the Polytechnic of Milan (RITA Report 2005) showed that Italy boasts a vast number of young high tech enterprises that could be candidates to become “gazelles”.

KDE Resting Gazelle, by khosey1

These enterprises are concentrated in the stronger parts of the country, particularly in Lombardy (30.3%), while their presence is far rarer in the Southern Italy (15.4%). Moreover the productive specialization of these enterprises is influenced by the traditional vocations of Italian regions and the presence of large enterprises operating in related sectors. In particular two thirds of all NTBFs operate in the service sector (software, Internet services, TLC and desktop publishing). In the manufacturing sector, a fundamental role is played by ICT (21.6% of the total, 8% of which in electronic, optical and biomedical tools) and automation and robotics (19%). The share of NTBFs operating in biotechnologies, pharmaceuticals, chemicals and new materials is more modest (4.9%).

The birth rate of Italian NTBFs underwent a significant increase in the latter half of nineties. Nonetheless, after the pinnacle reached in 2000, their birth rate is decreasing with the important exception of start ups generated by the public research system.

This is due to the negative effects created by the new economy bubble and, more generally, to the unfavourable macro economic conditions that have recently affected a vast portion of the high technology sector. Nonetheless, the enterprises have survived this period of competitive selection are starting to exhibit a new vivacity, which is particularly visible in the increase of indications related to innovative activities such as patenting and participating in research projects financed by the European Union.

(source: “an eye to innovation” newsletter, by FILAS)

Reading the ICT market in 2006 report, edited by AITECH-Assinform – the Italian association of Information & Communication Technology companies – apparently the IT Services shows some (little) sign of recovery (+0.4%), but software development and maintenance and data processing are both experiencing a downturn (-0.7% and -2.3% respectively).

Also interesting to notice that apparently innovation by Italian business does not take place on a co-operative basis, as results from the fourth Community Innovation Survey, by EUROSTAT.

Co-operation with customers in innovation activities ranged from 4% in Spain to 41% in Finland, and I am wondering what about launching an Italian Cooperative Software Initiative?

Technorati Tags: startups, ecosystem, innovation, open source