INNOVATION IN ITALY IN 2020

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Research and Innovation in Italy have experienced a crisis that worsened the weaknesses the underdeveloped technological activity, caused by multiple factors. Among these factors, there are the scarce attention paid to sectors such as research and development, the presence of a few large and medium-sized enterprises, the acquisition of many innovative Italian companies by foreign multinationals, the difficulty in financing innovation and the modest percentage of graduates, as well as the disparity between north and south that has always been present in our country.

Due to the loss of production and the reduction in investments that have affected Italian companies, innovation has slowed down drastically.  Only in recent times the situation is starting changing, thanks to the launch of Industry 4.0. The main contribution to this change has been given by the extension of tax incentives, the national smart specialization strategy and funding for worthy universities.

RESEARCH AND DEVELOPMENT IN ITALIAN COMPANIES: THE GAP WITH EUROPE

In recent years the Italian Ministry of Development did not provided political reforms to support research in Italy and the innovative investments of companies, and the actual policy is not enough to boost companies to acquire technological skills to compete with other European countries. Certainly, the new policies for the university and the industry 4.0 program have identified the priority areas on which it is necessary to concentrate resources, although they address too few companies active in digital innovation.

With the exception of a relatively small group of innovative companies able of exporting their products abroad, Italian entrepreneurship is made up of a number of micro and small enterprises with too few activities and very little R&D expenditure. Made in Italy is associated with low and medium technology activities compared to the main EU countries.

Compared to Germany, the sectors based on science and machinery manufacturing are too much neglected in Italy. Even in investments in research and development, Italy lags behind German companies, but not only: German companies invest much more than Italian companies also in traditional sectors. The growth rate of real added value in Italy, compared to Germany, represents a significant gap, given the relationship between investment in research and growth, as well as the ability to make successful entrepreneurship.

Certainly, in Italy the austerity policies that affected public spending in the technology sector have an impact on the economic growth of the country. What it evident is the funds for the University and public and private research and development bodies were not among the political priorities of the last governments, starting from the 1980s.

This is evidenced by the 19% decrease in public funding for research between 2008 and 2016, while in the rest of Europe the situation was and is different. This reduction in public research and university activities corresponded to the period in which Italian researchers recorded a marked improvement in scientific production. In fact, it is still growing and Italy in this case ranks ahead of France and Germany.

But due to the decline of the public research system, the Italian scientific success could be only temporary and disappear because of the downsizing of the public system. It is also for this reason that younger researchers are migrating abroad, where job opportunities and research funds are better and merit is recognised.

The budget cut for universities and the cut in public funds have led to a reduction in enrolments in Italian universities and this weakening also affects university education. The education and skills of workers suffer from an economic framework in which medium-low technologies prevail, scarce job opportunities for graduates, stagnant productivity and a significant gap in terms of innovation and competitiveness compared to the main European countries.

This situation leads to precariousness, that means adapting to a price competitiveness based on ever lower labour costs, as opposed to the technological competitiveness typical of the most advanced European countries. The same gap is perceived between the regions of northern and southern Italy, linked to the recession that particularly affected the central and southern regions.

Research and development activities were concentrated in the strongest northern regions, widening these disparities. All this reduces the economy growth and the technological transfer to companies, limiting the fair diversification of skills and economic activities and weakening the Italian Research and Innovation system.

At European level, the political instruments to be adopted in Horizon Europe, successor of the European Horizon 2020 program, are discussed. The idea is to propose a new strategy based on research and innovation programs that reflect broader economic, social and environmental priorities. At the international level, however, the G7 Academies of Sciences produced the joint declaration “New economic growth: the role of science, technology, innovation and infrastructure“.

The objectives are the following:

Increasing levels of public and private investment in science and technology are needed to meet the challenges of sustainable and inclusive growth. Governments can play an important role in stimulating new demand, through targeted public research programs, tenders for public services and public investment in infrastructure.

As far as companies are concerned, long-term investments should be encouraged, also by supporting high-risk projects.  In this way investments in science, technology, innovation and infrastructure can bring their valuable contribution to growth, combining private investment and public policies.

Research and innovation in Italy

Investing in innovation means growth and less unemployment. To achieve these goals, already achieved by countries like South Korea, it is necessary to find the right resources and invest in the future. In Italy, to date, there is no decisive incentive for technological innovation and the solution is to bet on hybrid funds, with public and private capital. This is what has already happened in France, where businesses are boosted by the State and, at the same time, they are supported by the private sector.

Italy slows down growth because it is less and less inclined to innovation.  To better understand how much innovation affects the country’s growth, it can be analysed the comparative estimates of the performance of EU Member States and of some third countries in the field of research and innovation.

These figures reveal that the EU’s innovative performance slowly increases only in countries with higher GDP growth. Italy is defined as a moderate innovator country, with a low share of technological exports. In times of recession, in fact, innovation is the main tool that foster the technological competitiveness, ensuring the competition of capitalism.

The crisis of the Italian situation in innovation is demonstrated by the fact that there are still few public and private actors who risk their own money to support the 10,000 innovative startups present in our country. Therefore, the situation is very different from 40 years ago, when patents and inventions in the field of mechanics, chemistry and technology were the most popular.

In a world that changes extremely quickly, it is important to keep at pace with changes and also adopt political strategies to innovate. Technological change leads to an exponential fundamental transformation. A good example to understand it, it is the artificial intelligence that enables to do things that previously would have been impossible and difficult to do and also imagine. Another example is given by social networks that changed and improved the way of communicating among people. A scarce innovation capacity limits the possible futures, it does not help fight the recession and it does not support the growth.

RESEARCH AND DEVELOPMENT IN THE PUBLIC SECTOR

In 2019 the PRIMA call, which promotes research and innovation in the agrifood sector, allocated approximately 56 million euros in the agrifood sector and in the management of water resources, doubling the funding for innovation projects and introducing economic resources for the efficient management of water resources, sustainable agriculture and the agrifood chain. In participating in the projects selected by Horizon 2020, Italy stood out for the quality of its research and the results achieved. In fact, 33% of the projects are coordinated by an Italian body and in other 34 projects an Italian organisation participates, for a total of 70 realities involved. 12 million euros will be allocated to Italian researchers and innovators within the three thematic areas listed above.

They consist projects that propose innovative solutions for an alternative use of water resources and the improvement of the quality and availability of water, objectives obtained through IoT, ICT and DSS irrigation systems. The proposed solutions adapt to climate change and to the promotion of sustainable agrifood systems, through genotypic innovations, the promotion of conservative agriculture practices, IT and analytical systems for the control and resolution of infectious and parasitic diseases.

As concerns the agrifood projects, they offer solutions to food waste and the promotion of sustainable and quality productions, through the promotion of traceability methods on different production chains, intelligent packaging capable of extending the freshness and the storage life of food products and, at the same time, it brings innovative enhancements of food supply chains.

Digital and interactive platforms have also been proposed for mapping and enhancing the best water-ecosystem-food practices. The PRIMA program represents a strategic initiative for Italy, for the Mediterranean area and the agri-food sector.

Hopefully, these projects can offer concrete solutions to the social, environmental and economic challenges of the Mediterranean area thanks to sustainable innovation in the agri-food sector. Civil society and end consumers will gain benefits from the collaboration between research, development, social well-being and environmental care.

Therefore, in Italy the sector of research and technological innovation has yet found the right path, since the level of investments, both public and private, in relation to GDP is lower than that of other EU states, especially in the high tech.

Between 2008 and 2017 there was an increase in investment in research and development in the private sector and in scientific production. For the future, a transformation must be implemented from inside the company, changing the way of working, starting from training. The company needs the right education, to well-prepare Italians for the jobs of the future and foresee the most sought-after jobs in Italy in 10-15 years.

As regards the energy sector, experts start talking about decarbonisation, circular economy, efficiency, rational and fair use of natural resources. The objectives turn towards an economy that is more respectful of people and the environment, integrating national energy markets into a single market, paying attention to the accessibility of prices and the security of energy supplies.

Since 2020, companies investing in research and innovation have available 3 new tools, without sector and legal form discrimination, thanks to a 12% tax credit (6% for technological innovation projects) for carrying out activities research and development and digital innovation 4.0. The tax credit will instead be 6% for design activities and aesthetic innovation. The benefit is calculated on the total eligible expenses and limits in expenditure are provided for the depreciation charges for tangible assets and consultancy.

In summary, the most important news includes:

If you are looking for an authoritative partner for research projects in Information and Communication Technology, PMF Research could be the solution for you.

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