Empowering SMEs for digital transformation and innovation: The Italian way

Italy’s economy thrives on over 4 million small and medium-sized enterprises (SMEs) – the highest number of SMEs among the EU’s Member States. These SMEs employ 13 million people and generate more than 65% of the nation’s added value. They are the powerhouse of the Italian economy, playing a crucial role in economic growth.

Italian SMEs are also custodians of the country’s unique know-how and high-quality “Made in Italy” products. Their success in a variety of markets, including advanced manufacturing is reflected in their high contribution to the country’s exports (53% against a European average of 40%). They embody traditions inherited from a long-standing industrial history, passing them on to new generations of workers and entrepreneurs.

These enterprises are highly diversified in terms of industrial sector, geographic origin, and production process, posing a significant challenge for policymakers who must address their very different needs.

While SMEs vary widely across sectors and regions, they share similar needs when it comes to digital transition and innovation. Common needs include a demand for highly skilled labour and digital expertise; access to finance for investment; and a greater awareness of the legal responsibilities and consequences of adopting new technologies. Addressing these needs is a priority to avoid widening gaps in digital uptake between larger and smaller firms, and between SMEs in different sectors.

Within this landscape, there is a special role for “innovative” startups and SMEs that develop, produce, and market new digital products and services. Data from the SMEs Digital Innovation Observatory of the Politecnico di Milano shows that Italian SMEs are embracing the digital transition. Over 60% of these enterprises are investing heavily in digitalisation, and a third increased their investment in digital technologies between 2022 and 2023, including in digital devices and systems, ICT software and services, digital content, and advertising.

At the Ministry of Enterprises and Made in Italy, we champion a pragmatic approach to supporting SMEs in their digital transition—a challenge that, alongside the green transition, defines our era.

Significant contributions have come from the National Recovery and Resilience Plan, which has allocated funds to support technology transfer, strategic supply chains, the adoption of net-zero technologies, and the financing of startups.

To promote the spread of digital skills and knowledge, we have established a network of 50 innovation centres specialising in technology transfer. These centres offer experimentation labs, targeted training, and mentoring programs to businesses, particularly SMEs, interested in adopting new technologies.

We have also introduced specific fiscal and financial instruments, such as ‘Transition 5.0’. This tool allows enterprises investing in the digitalisation of industrial processes to receive a tax credit, integrating both digital and green objectives and promoting a productive model that is sustainable and technologically advanced.

Alongside this, we are enhancing collaboration with local communities to raise awareness among businesses about the benefits of new technologies and the public policies that support their implementation. We maintain regular communication with business associations and frequently visit enterprises within their ecosystems to gain deeper insights into their needs.

The challenges faced by Italian SMEs mirror those encountered by their counterparts worldwide, highlighting the urgent need for a cross-border dialogue on this issue. To keep SMEs integrated into modern supply chains, production cycles, and data management systems, we must leverage digital technology effectively. Our mission is to lower the digital barrier and combat fear: the fear of not being up to the challenge, the fear of using new AI tools as we strive to make SMEs grow and thrive in this digital age.

In this spirit, as the Chair of the OECD D4SME Global Initiative my ultimate goal is the ‘democratisation’ of digital tools, to ensure they are accessible and manageable for all SMEs. To support this, we need to work together, sharing knowledge and best practices among public institutions, research centres, SMEs, startups, and key players in digital innovation.

I urge more countries and companies to join this Initiative: there is still much work ahead to empower our SMEs to grow and navigate an increasingly complex global landscape, but together we can overcome these challenges and ensure no one is left behind.