The Italian Tradition of Entrepreneurship in Industry

It's only by traveling along the Peninsula that you discover the many faces of small firms in Italy. Thirty of their stories are contained in the volume Il futuro nelle mani [The Future in Our Hands] (Egea), while other eleven entrepreneurs, all Bocconi alumni, tell their experience here. These business case histories bespeak of an alternative way to promote business growth, which from Italy to Silicon Valley is mainly about startups. A first element differentiating these Italian new firms for the US startup model is the set of skills that an Italian fledgling or regenerated firm is based upon. In the cases observed, many Italian youths based their business venture on technical or manufacturing prowess, while many American startups, especially the ones which we read about in the financial press, are essentially technology spinoffs of universities with researchers founding new firms. In order to develop the ability of doing, you need the long experience of learning that comes from practice, so that study must be constantly integrated with working practice. The know-how needed to make things is far from the skills commanded by startuppers coming from the world of academic research.

A second difference concerns the origin and velocity of the startup phase. The companies analyzed, mostly operating in traditional manufacturing sectors, had a longer maturation phase, so that their success is measured across a longer time horizon. This element, if viewed with US lenses, would seem counterproductive, because exponential growth in the first few years is considered a positive characteristic of that model. But this negative view needs to be countered with the fact that the industries analyzed have different characteristics, which make them unviable for the explosive growth common in digital markets. You cannot use the dynamics of the IT industry as standard to evaluate entrepreneurship in the chemical, textile, or agribusiness industries.

Italy's marathon runners

The above difference in the industry mix highlights a third element which can be useful to outline an Italian way to the recreation o re-generation of firms, and that is innovation. The startups of dot-com legend focused on innovation understood as application of new technology. The cases examined here show that you can attain international competitiveness in market niches also by doing innovation involving product design, distribution or communication channels, as per the manufacturing specialization of the Italian economy. A fourth difference is about the evolution of the American startupper vis-à-vis the Italian business founder. Young entrepreneurs of the former type are sprinters that race headlong in starting the business, and if their efforts are repaid, they either sell and set out for a new venture or, if they become majorly wealth, they turn to philanthropy and charities. In Italian success stories, the entrepreneur is more like a marathon runner, who only through perseverance and deepening reaches long-term maximization of business results.

A final but important difference is about financial context. The Italian firms interviewed have initially grown organically by reinvesting profits: there are no venture capitalists or private equity funds ready to support startups financially in Italy. Conversely, US startups have ready access to financial markets, starting with equity markets. If you ignore this fundamental difference in public discourse, there is the risk that aspiring entrepreneurs become deluded with utopian stories that quickly turn into disillusionment. This would provide an alibi to the partisans of business conservatism. As we wait for the Italian financial industry to shed its peripheral qualities and embrace new entrepreneurship, what we see is not front-page star entrepreneurs, but young people who, for reasons of personal redemption or individual expression, have managed overcome the constraints posed by the local business environment, and negotiated the obstacles on the playing field to establish successful firms.