Are start-ups the key to Italy's future?

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Riccardo Donadon, President of Italia Startup speaking at the Digital Economy Forum earlier this month. Photo: Italia Startup
09:33 CEST+02:00
You’d need to be a Martian not to be aware of Italy’s rising unemployment – but not all is doom and gloom for young people. In fact, more and more are choosing to start their own businesses. The Local spoke to the organization Italia Startup and an entrepreneur to find out more.

It’s been the best of years and the worst of years, so far as many young Italians are concerned. According to the latest figures, 38 percent of them are out of work – yet at the same time there’s also been a boom in start-ups.

So why are thousands of young people suddenly deciding to start up their own businesses? One reason is while the number of available jobs is shrinking, it’s actually getting easier to become an entrepreneur.

Many point to the series of reforms passed by Mario Monti’s technocrat government last year. These include a popular scheme which has shrunk start-up costs for entrepreneurs under the age of 35 from €10,000 to a symbolic €1.

The parts of the long-awaited Development Decree, (known as ‘Crescita 2.0’) that have so far become law have also stimulated new business by simplifying the bureaucratic process.

Monti’s successor, the new prime minister Enrico Letta, has since promised to make youth employment a top priority. This announcement however has been greeted with cynicism by some.

Two weeks ago, students and entrepreneurs crammed into an ancient Venetian building for the annual Digital Economy Forum, an event organized by the American embassy to promote business and technological innovation in Italy.

Among the speakers was Riccardo Donadon, President of the business incubator for 'Made in Italy' start-ups, Italia Startup. In his speech, he called upon the Italian government to do more to help start-ups.

Speaking to The Local, Italia Startup's Secretary General Federico Barilli said it was crucial for Italy to invest more in business and finish what Monti’s government had started.

“There are still many gaps in the Development Decree law passed by the last government” he says.

 “Start-ups are a motor for economic growth and therefore an essential resource for Italy. They can give hope, help the country to become competitive again and offer new opportunities for employment.”

But it’s not just a question of changing the law. “It’s about changing and modernizing the mentality of our country,” argues Barilli.

In 2012, Eurostat found that only 63 percent of Italian households had internet access. And this, according to Barilli and others at the Digital Economy Forum, is holding Italy back.

“We need to promote a new kind of business based on innovation and digitalization,” says  Barilli.

Meanwhile thousands of Italy’s talented young people are leaving the country every year in search of better opportunities. So what’s to keep them here?

Again, Barilli insists that digitalization is key. “We think that extraordinary opportunities could open for traditional sectors – like design and other creative businesses – that know how to grab hold of the many opportunities that come with digitalization.”   

And while he acknowledges that it is important for young Italians to see something of the world outside Italy, he urges them not to forget their homeland.

“What we would say to our compatriots who are experiencing life abroad is to make contacts and links with all the world, but also to maintain roots and faith in our country.”

‘The internet is fast, Italy is not’

Ernesto Cinquenove is the 29-year-old founder of the Italian start-up MeetingLife, a social network which encourages users to share skills and try things they’ve never done before.

Last summer he went to San Francisco, the so-called “cradle of start-ups”, to surround himself with "people working on large-scale projects". It was the lack of positive creative energy in Italy, he says, that made him leave Rome.

“There are many things I don’t like about the US,” he tells The Local, “but the one thing that I do like is that people here believe that anything is possible and they’re willing to commit to make it happen. Italy had become a very pessimistic environment to work in.”

Although Cinquenove thinks that things are slowly changing for the better in Italy, he’s not convinced this will happen fast enough.

“The amount of time it usually takes Italy to make changes is enormous. The internet is fast; Italy is not,” says Cinquenove.

Among the changes Cinquenove would like to see the government make are more flexible incorporation agreements.

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“Young entrepreneurs make many mistakes when incorporating a company for the first time. They give up too much equity, they choose the wrong partners and often need new partners to join in at a later stage,” he says.

“Making the necessary changes within the current Italian system is not feasible.”

Cinquenove would also like to see the government give more financial privileges to early-stage start-ups.

“Young entrepreneurs invest their life savings into projects they believe in. That money should be spent entirely on things a young company really needs to grow fast instead of notaries, accountants and taxes. Whatever is not needed can wait until the company becomes profitable.”

“Hiring people should be cheaper, too. The government could take care of employees’ social security and benefits for the first years of activity.”

Does he plan to return?

“I love Italy and I definitely want to come back,” he says, “It’s the only place I can call home. But there are still many other things I would like to see and learn before moving back.” 

Ernesto Cinquenove is the founder of the social network MeetingLife. You can visit the MeetingLife website here and Cinquenove's personal website here.

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