November 09, 2022

Italy can be a country for startups - By Corrado Passera

"What limit should we set for ourselves?" - "None."

So began, ten years ago, the journey of the Startup Act. With a specific exhortation to fly high, to go to school from the best in the world, return home and put the lessons learned into practice. With no limits and no foreclosures. Only in this way could we have made Italy a country for startups.

As of June 2022, the Business Registry counted 14,734 startups, and in the past year, Italian venture capital exceeded 1.9 billion euros (+221% from 2020). Does this mean that we have succeeded? That Italy has become a country for startups? It certainly is more so than before, but still much remains to be done. And to do, you must first listen. That's why the first, great, innovation of the Startup Act was the method by which we codified the legislation.

I chose 12 innovation pioneers and asked them to find the world's best practices in the field. They came back and told me, "If we could achieve even 50 percent of what we saw, Italy would be a different country." "Why stop at 50 percent," I replied, "We aim to achieve 100 percent. With this spirit, we began the discussion with all those who knew about startups, with the relevant ministries and with the parties. The project was approved by a large majority despite the fact that our government had already resigned, and it is still, one of the -few- laws that has not been dramatically overturned, rather updated and improved with the succession of different governments.

Why do I say that this approach was revolutionary? Because startups are not companies like any other, they need ad hoc tools and regulations. And only by knowing this world in depth is it possible to understand it. So, following the example of more advanced countries, we reformed labor law, civil law for the establishment of new companies, incentives, bankruptcy law-perhaps the most difficult field-and the way of raising equity and credit through crowdfunding. It was a success. But successes - ours and others' - should always be recognized, appreciated, and valued, so that we can then succeed in doing even better. Therefore, measures to support the innovation ecosystem in Italy are far from over.

Startups are daughters of skills and entrepreneurial spirit. Innovative ideas to become businesses need incubators, accelerators. Startups, but especially scale-ups need venture capitalists. We should work broadly, not in one field, because startups should be able to be born in every field. We should foster venture capital, with attention to what the public can and should do and knowing that venture capital still has a national dimension as well. Just look at France and the recent German law by which it mobilized 30 billion euros to help strengthen venture. Italy has created a good VC model through CDP, but we need to do more to finance private venture capital that is still too small, working not in a public-private competition but with a reward logic. The public must incentivize private investing, acting as a booster. To make a significant breakthrough, at least 5 billion is needed to be diverted from retirement savings through appropriate incentives and "moral suasion." Funds of funds are needed that are specialized and managed by the best international players. Public administrations, especially local ones, could and should also do a lot to make territories more welcoming to startuppers, accompanying them bureaucratically and opening the doors of public procurement. At the same time, we should work on the culture of risk and failure, without fear or awe. To young people, in schools, we should tell them that trying is possible. That work should not only be sought, but also created. And that it is possible to make mistakes, it is normal to fail, but even from mistakes we learn. We should be ambassadors of the "you can" culture, bringing forth positive examples, always accompanying theory with practice, truly uniting the generations. You people at IAG know this well: very often the best startups are those that start with the bright idea of a young person and then are accompanied by experienced management. Innovation is born this way.

Also, let us not be ashamed to look at those who are better than us. If someone, from a regulatory and organizational point of view, has already found the best possible solution, let us make it our own. Let us copy it and move forward, enhancing the fields in which we, as Italy, are excellent. In the globalized world-and it will remain globalized even if it has different features-you win with excellence and uniqueness, and Italy can deploy many of them. Without ever deluding ourselves that we can live off the land. Let us remember that confrontation always remains the most important key to growth. And let us not compare ourselves with those who are doing worse than us or with the past, let us look at the best in the world, ask why he is better than us, and do everything to be better in turn.

Therefore, if like ten years ago, someone asked me, "What limit should we set for ourselves?", I would answer, without any doubt whatsoever, "None."

This is the future. This is what it takes to make Italy a country for startups.