The declining numbers of young entrepreneurs and their lack of will to carry on the family businesses could threaten the small and medium-sized enterprises sustaining the Italian economy. Economists are worried: will 2050 mark the end of Italy as we know it?
Expert’s predictions about Italian companies
An article published by the magazine “Il Settimanale” opened people’s eyes to an important issue related to entrepreneurship. Fabio Papa, founder of the Applied Economics Research Center for the study of businesses and territories, thinks that the situation is not very optimistic.
His studies, in fact, reveal that Italian companies are at risk of “extinction” in less than 30 years. Numbers are clear: of the 4.5 million national businesses, the 83% is family-run. The time when the young members will take the place of their older relatives at the helm of the companies will soon come and Papa has no positive thoughts about it.
In fact, 3.5 million people under 35 are unemployed. Talking about the level of education, only 62 out of 100 Italians have a diploma, 16 out of 100 a degree and only 4 out of 100 follow professional training courses while they are working. These are the numbers of a “full cultural crisis”.
70% of young people come from entrepreneurial families and the trend that leads them to avoid continuing their parents’ business is increasingly widespread. If generational continuity is positive to maintain the nature of small and medium-sized Italian enterprises, in the absence of capable “successors”, entrepreneurs need to find alternative solutions.
Pessimism about the corporate future
Papa is not the only one who has begun to reflect on the future of the Italian economic fabric. The 2022 International Business Report of the consulting firm Grant Thornton, in fact, reported how the economic optimism of companies in our country fell by 15% compared to 2021.
63% of enterprises declare themselves worried by economic uncertainty, which they consider the main obstacle to growth. The increase of energy costs is disturbing the 62% of companies. 57% of those interviewed also find the increase in labor costs disabling.
Youth businesses in Italy
An InfoCamere study based on data from the Italian Camere di Commercio has instead analysed the trend of the last ten years in terms of young companies in Italy. One way to compensate for the lack of turnover in family businesses is represented by the launch of new businesses. But even this number is struggling to keep up with the positive pace of past decades.
If at the end of 2012 the percentage of registered youth companies was 11.1%, while at the end of 2021 these were just 8.9% of the total. Primarily due to the drastically declining demographic curve: Italy is an “old” country and, of the 675,000 “young” companies archived ten years ago, today a large number is disappeared (137 thousand).
The role of young people for the Italian entrepreneurial fabric is fundamental, but the drop in births and the lack of an entrepreneurial vocation represent an obstacle for Italy. The aging of companies is note the same in every region. The most blocked, at the moment, are the central ones such as Abruzzo, Marche, Molise, Tuscany and Umbria, even if the contraction of youth businesses has also recorded significant numbers in Lombardy (-16,900) and Sicily (-15,900).
How to reverse the trend and save businesses from the risk of extinction?
The low turnover of young people means, in addition to lack of growth and risk for the continuity of family businesses, missed opportunities to innovate, develop new ideas and markets. The positive thrust of the older generations, which has allowed the country to achieve an important economic well-being, will suffer a heavy setback.
Seen from another point of view, this “crisis” could also turn out to be positive and let us know, in the years to come, unprecedented work and business models, modelled on the new needs of the digital generations. Their openness to other cultures, attention to issues of inclusiveness and sustainability, could therefore generate successful “hybrid” companies.
To facilitate the circulation of ideas, therefore, it is essential to invest in culture, bridging the gap that nowadays is worrying economists throughout Italy.