Innovative start-ups and SMEs in the ICT sector continue to grow, albeit at a more moderate pace: 11,253 companies as of April 2023

Source: Anitec-Assinform and Infocamere press office

Milan, 20 July 2023 – The long-standing collaboration between Anitec-Assinform, the Confindustria association that groups together the leading ICT companies, and InfoCamere, the Italian Chambers of Commerce’s company for digital innovation, continues today with the presentation of the fifth edition of the report monitoring the demographic trends of start-ups and innovative SMEs in the ICT sector. The report offers an in-depth overview of innovative ICT companies, more than ten years after the introduction of policies dedicated to them (Decree Law 179/2012), with data updated to 24 April 2023 for the number of innovative ICT startups and SMEs and to the fourth trimester of 2022 for the number of employees.

Data from the latest survey show that the number of registered ICT companies increased by 0.12% year-on-year to a total of 11,253 companies. More specifically, there were 1,436 innovative ICT SMEs, or 11.4% more than in April 2022, and 9,817 ICT startups, down -1.34% compared to April 2022.

Of these, the majority (7,997 enterprises, or 71.1%) are considered “ICT-digital,” as they have ATECO codes associated with the ICT sector and/or declare in the “Showcases” section of the special register that they carry out digital activities. The remaining 3,256 companies (28.9%) are reported as “ATECO-only,” i.e. they use ATECO codes associated with the ICT sector but do not specify digital activities in the “showcases” section.

Despite a slowdown in growth, the combined ICT start-ups and innovative SMEs continue to maintain a more robust dynamic than those in other sectors. Currently, the combined share of ICT companies with an ATECO code and digital companies with showcases but no ATECO code accounts for 70% of the total of 16,169 registered companies. This shows an increase compared to October 2022, when the share was 69%, with 11,487 companies out of a total of 16,554 registered companies.

Geographical Distribution: High Concentration in the North
Innovative ICT start-ups and SMEs are mainly concentrated in Lombardy, Lazio and Campania, together accounting for more than 50% of registered companies. Lombardy accounts for 28.7% of ICT S&PMIIs, followed by Lazio (13.8%) and Campania (8.8%). Other regions with a good representation are Emilia-Romagna, Veneto, Piedmont, Apulia, Tuscany and Sicily. The density of these companies is highest in Lombardy, with more than 66% of new innovative ICT companies compared to the total number of new ICT companies established in the last five years. The density of ICT S&PMIIs, i.e. the ratio of ICT S&PMIIs to the total number of new ICT companies established in the last 5 years, is particularly high in regions where the concentration of ICT supply chains is already high. Lombardy holds the record with over 66% of new innovative ICT companies, followed by Basilicata, Friuli-Venezia Giulia, Valle d’Aosta and Trentino-Alto Adige. In Southern Italy, the presence of ICT S&PMIIs is lower than the national average for Sicily, Sardinia, Tuscany and Abruzzo.

Higher costs, bureaucracy, financial crisis and uncertainty slow down start-up growth
The slowdown in the growth of start-ups has been influenced by several factors, including geopolitical instability, rising energy costs, interest rates and inflation, which have discouraged entrepreneurship. In addition, the increasing cautiousness in the private sector in granting credit, coupled with the suspension of telematic registrations, had a negative impact on the number of newly established companies. New registrations of innovative start-ups in 2022 decreased by -32.0%, from 2,321 to 1,537, while innovative SMEs decreased by -16.3%, from 258 to 216.

Micro-enterprises continue to prevail, few young and female enterprises
Innovative start-ups and SMEs in the ICT sector are mainly micro enterprises, with more than two-thirds employing up to four people. About 80 per cent of these companies have equity capital of less than EUR 50,000 and one third have a production value of less than EUR 100,000. This is due to constant turnover, as established companies lose their innovative start-up status over time.

It is quite worrying the fact that only 16% of innovative ICT start-ups and SMEs are founded by under-35s, while women-led companies account for only 11.9%. Moreover, companies with foreign managers as majority or exclusive owners are only 3.5%.

Iot, Artificial Intelligence and Industry 4.0 are the most popular strands among innovative ICT start-ups and SMEs
Innovative start-ups and SMEs in the ICT sector focus on high-value technology products and services, with an emphasis on digital enablers. These include app development, cloud computing services, cybersecurity, and much more.
According to a study of a representative sample of innovative start-ups and SMEs in the ICT sector, about 86 per cent of these companies provided detailed information on the business lines in which they operate. At the end of April 2023, the main business strands for these companies are digital solutions (12.7%), followed by IoT solutions (12.5%) and artificial intelligence and machine learning (11.3%). Industry 4.0 and mobile apps also show a strong presence, with 7.1 per cent and 6.7 per cent of companies focused in these areas, respectively. Other business strands with significant market potential include e-commerce, big data & data science, blockchain, social science and cybersecurity and crypto.
These datas reflect the dynamic innovation landscape in the ICT sector and the growing importance of digital enablers as growth drivers for innovative start-ups and SMEs. Knowledge of these trends is essential to further support and promote technological innovation and competitiveness in the ICT sector and beyond.

Innovation in ICT: Patenting activity and qualified personnel are still challenges to be faced
Innovative ICT start-ups and SMEs show significant differences with regard to innovation, highlighted by the analysis of three key characteristics: patenting activity, highly qualified personnel and research and development (R&D) expenditure. The data show that only 21% of companies are involved in patenting activities, while 27% have a team of highly qualified personnel. On the other hand, 70% of companies invest in R&D.

Patent activity still limited among SMEs and start-ups
Despite some progress in regulation and incentives, the use of patenting tools in ICT research remains low, especially among SMEs. Most companies with patents are concentrated in the north-west, while the south and islands have a significant presence of highly qualified personnel.

The shortage of qualified human capital remains very critical
Only 27% of ICT S&PMIIs have highly qualified personnel, with higher peaks in the 4.0 sector. European and national cohesion policies seem to have a positive impact on the South, which has a high share of highly qualified personnel.

Innovative ICT start-ups and SMEs with significant R&D expenditure more widespread
Several innovative ICT start-ups and SMEs invest in research and development, with 70 per cent of the total involved in these activities. The highest concentration of R&D expenditure is in the north-west, but the south and the islands show a significant increase.

According to Marco Gay, President of Anitec-Assinform: The growth of innovative startups and SMEs in the ICT sector continues to be an important indicator of technological innovation and dynamism in the sector. In this context, the importance of ‘digital enablers’ is becoming increasingly evident, where AI, Big Data, Blockchain and Cybersecurity are fundamental pillars for the success of innovative ICT start-ups and SMEs. One fact to note is the small percentage of these new realities founded by people under 35 or led by women. Yet, it is young people and women who, more than others, need to increase their participation in the world of work and innovation today in order to increase the productivity and quality of our entrepreneurial system. Universities and large companies play an important role in the development of innovative start-ups and SMEs in the ICT sector: universities encourage the training of new talent and technological research, and companies invest in emerging businesses, creating synergies that accelerate innovation.

A step forward was taken yesterday by the Chamber of Deputies with the approval of the bill for the promotion and development of start-ups and innovative SMEs through tax breaks and investment incentives. We trust that the other branch of parliament will also soon approve this bill, so that through coordinated action we can ensure sustainable and lasting growth for start-ups and innovative SMEs in the ICT sector.
Only through coordinated and forward-looking action can we ensure sustainable and lasting growth for start-ups and innovative SMEs in the ICT sector.

Paolo Ghezzi, Director General of InfoCamere, commented: Start-ups and innovative SMEs are an important hub for innovation in our country and, at the same time, an advanced training ground for testing the talents, ideas and determination of many young and very young people who see in enterprise the possibility of realising a dream. Through the analysis of data from the Chambers of Commerce Companies Register, available at startup.registroimprese.it, it is possible to follow the trajectories of these initiatives, tracking them practically in real time. An updated and official database that is accessible to all and indispensable for developing policies that are increasingly suited to supporting and relaunching our economy, focusing on digital innovation and young people.

Translated by Cecilia Flaccavento

Intern at the Chamber of Commerce of Treviso – Belluno